This year’s presidential campaign has confirmed at least one fact of modern American politics: Democrats have lost their claim on populist politics: Donald Trump has energized millions of working people fed up with political and economic elites pushing bad trade agreements for Wall Street’s benefit. Meanwhile, Hillary Clinton has been forced, awkwardly, to convince voters she will put the interests of everyday Americans ahead of the big global banks who have supplied the Clinton machine tens of millions of dollars over the years.
During the Democratic primary contest, Bernie Sanders’s most effective attack on Hillary Clinton highlighted her close association with Wall Street banks. Sanders effectively made the connection between these banks and their support of bad trade deals for American workers. In the general election contest between Hillary Clinton and Donald Trump, the opportunity for contrast is still there.
Unlike community banks, which serve local communities, know their economies and are committed to their neighbors, the “too-big-to-fail” (TBTF) banks don’t know their customers, serve themselves and could care less about their neighbors. When the great financial crisis came, TBTF banks were largely responsible. The American people rightly wanted justice. But it was time for payback, and the TBTF banks used their capture of the Democrat party for years of financial support to extort protection. Nobody went to jail, and Hillary and her pals have since then helped to make sure that no real harm comes the TBTF banks. Amazingly, since the crisis, the TBTF banks have only grown bigger.
Six years since President Obama signed the Dodd Frank Act, the banks his Administration regarded as too big are now 30% bigger than they were in 2010, and 80% bigger than before the banking crisis of 2008. The six largest U.S. financial institutions now have assets of some $10 trillion, amounting to almost 60% of our GDP and controlling almost 50% of total deposits. In contrast, community banks have been hit very hard. There are 1,524 fewer banks with assets under $1 billion than before the financial crisis. Small, community-focused lenders are being squeezed by the TBTF banks with whom Hillary Clinton has been so closely associated.
Roger Stone is co-author with Robert Morrow of Clinton's War Against Women.