What Hillary Clinton's NASDAQ speech said..........
Clinton refers to this speech often when talking about Wall Street to liberals, and it's worth actually reading. It's not unusual for spouses to disagree about certain political issues (I personally have no idea what my wife thinks about financial regulation), and it's certainly not unusual for politicians to ally with home state industries only to abandon them when they shift to a larger stage. And the speech offers an interesting window into Clinton's thinking about the role of finance in society at a time when it wasn't necessarily a big issue politically.
It's worth giving the speech a read because it's a very interesting historical document that, among other things, offers a glimpse at Clinton's thinking about the role of finance in society at a time when this wasn't necessarily a big issue politically. A lot of the specific policy context has been overtaken by events, but the basic idea was that Clinton wanted Wall Street banks to bear some of the burden of providing financial relief to families facing foreclosure. A lot of that has actually come to pass over the past five years, usually through deferred prosecution agreements in which banks charged with misconduct pay fees to avoid facing trial.
Clinton puts forward a very different moral and conceptual framework. Here's the key passage, with some emphasis added:
Now, who's exactly to blame for the housing crisis? Well, that's always a question that the press and people ask and I think there's plenty of blame to go around.
Responsibility belongs to mortgage lenders and brokers, who irresponsibly lowered underwriting standards, pushed risky mortgages, and hid the details in the fine print.
Responsibility belongs to the Administration and to regulators, who failed to provide adequate oversight, and who failed to respond to the chorus of reports that millions of families were being taken advantage of.
Responsibility belongs to the rating agencies, who woefully underestimated the risks involved in mortgage securities.
And certainly borrowers share responsibility as well. Homebuyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads. Speculators who were busy buying two, three, four houses to sell for a quick buck don't deserve our sympathy.
But finally, responsibility also belongs to Wall Street, which not only enabled but often encouraged reckless mortgage lending. Mortgage lenders didn't have balance sheets big enough to write millions of loans on their own. So Wall Street originated and packaged the loans that common sense warned might very well have ended in collapse and foreclosure. Some people might say Wall Street only helped to distribute risk. I believe Wall Street shifted risk away from people who knew what was going on onto the people who did not.
Wall Street may not have created the foreclosure crisis, but Wall Street certainly had a hand in making it worse.
The striking thing about this accusation is that what she's saying Wall Street did clearly isn't illegal. But by the same token, it also clearly isn't a question of a few bad apples or rogue traders. She's saying that the legal aspects of the financial system were fundamentally broken and not accomplishing what a financial system should do. Even though the policy context was relatively narrow, it's a profound indictment.
http://www.vox.com/2015/11/12/9716034/hillary-clinton-nasdaq-speech
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