Chidem Kurdas
If there’s one point Hillary Clinton talks about honestly and passionately, it’s that she belongs to the 1%. Take one of her notorious speeches at Goldman Sachs, revealed by Wikileaks. She told the bankers she is “far removed” from the middle class “because the life I’ve lived and the economic, you know, fortunes that my husband and I now enjoy.”
How did she and Bill acquire those fortunes they now enjoy? Basically they peddled political access and influence. Goldman paid her $225,000 per speech not because she speaks well or has anything original to say – her sentences are littered with the gratuitous “you know” and she never leaves the comfort of boardroom clichés – but because they want to have the political connection. Faced with a government that interferes at micro level, businesses need protection.
Goldman Sachs established a connection by making generous donations to the Clinton Foundation and campaign and helping in myriad ways. Clinton aide Huma Abedin wrote in an email that “Goldman, b/c of their relationship with us” delayed a lease with another party interested in the office space the bank offered to the campaign. Wall Street works hard to develop such relationships. The campaign did not take up this offer but the Clinton Foundation held a conference of big donors at a Goldman space.
Clinton told the Wall Street crowd: “banks are not doing what they need to do because they’re scared of regulations, they’re scared of the other shoe dropping, they’re just plain scared, so credit is not flowing the way it needs to, to restart economic growth.” Right. The mammoth Dodd-Frank Act has jammed up credit and as a result growth is sluggish. She acknowledged that the law was a political response to public anger in the financial crisis and is bad for the economy. She was a member of the cabinet that led the regulatory assault but presumably changed her mind.
She even personally felt the bankers’ pain. She too is subject to regulation (mainly to avoid conflicts of interest): “But, you know, part of the problem with the political situation, too, is that there is such a bias against people who have led successful and/or complicated lives. You know, the divestment of assets, the stripping of all kinds of positions, the sale of stocks. It just becomes very onerous and unnecessary.” Oh dear, so annoying. You’re required to sell the stock of companies you have political dealings with.
And then she flipped again. In 2016, couple of years after that speech, she fully espoused Dodd-Frank, promised to protect and expand it. Stagnant economy be damned.
As a politician in need of a wide base, Clinton changes her message according to audience. One position for investment bankers whose contributions have filled her coffers; another entirely for the leftie Bernie Sanders supporters who made the primary difficult for her despite the party establishment’s schemes to ensure her winning. She turned arch-regulator to appeal to the Sanders crowd.
Which is the real Hillary Clinton? That’s not a useful question. These messages are what she sells to different market segments. She and Bill made their fortune catering to a wide variety of people across the globe. Her staff prepares the appropriate talking points to fit the audience. You can’t expect these positions to add up to a coherent agenda.
The one consistency is the Clintons’ ability to extract money from individuals, groups and businesses in need of help dealing with people in the government. The immense growth in the federal regulatory system, in large part due to Dodd-Frank and Obamacare, increased both gains and losses from government actions. Hence many want to have a relationship with a former President and expected future President. The Clintons are uniquely placed to make money from political status. And clearly they did.
As for those who are not part of the oligarchy, who did not lead “successful and/or complicated lives” as she put it, the Wikileaks trove shows that she finds them tedious, even when they’re not “deplorable”. Clearly she’s much more comfortable at a private Goldman Sachs gathering than at a public rally for common folks.
But chummy as she sounds with the bankers – she showed her genial side, gushed the New York Times – it does not follow that she minds their interest. What she protects is her own dynastic interest. She’s obviously happy about her and Bill’s “fortunes” and will do whatever it takes to protect and enhance them. What she’ll do with regulation, for instance, depends on what serves her interest at the time.
She and her family are certainly not going back to being middle-class. Note that daughter Chelsea has said she will remain the head of the Foundation.
The fundamental reason not to vote for Clinton is not so much that she’s close to Wall Street but rather that she’s all-around corrupt. You don’t get as rich as the Clintons without knowing how to subtly set things up so as to extract maximum rent. Those regulations that impede economic growth are very good for Bill and Hillary. There’s no knowing what form her corruption will take, but the Clinton fortunes are at the top of the private agenda, whatever the public pronouncements.
Tags: Election, Goldman Sachs, Hillary Clinton, Wikileaks
HedgeFundSmarts 
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