As Thursday marked the 16th anniversary of the repeal of the Glass-Steagall Act, which erected a firewall between investment and commercial banking, some are assessing if new measures to break up large banks will become a litmus test in the 2016 presidential race.
Because Glass-Steagall is seen as a challenge to Wall Street, many experts say Hillary Clinton’s opposition to reinstating that provision makes it clear where she stands in the fight against the industry’s powerful influence.
The call to reinstate Glass-Steagall has picked up steam from influential progressives like Sen. Elizabeth Warren (D-Mass.), who in July introduced a bill that would restore the banking barrier, as well as presidential hopefuls Sen. Bernie Sanders (I-Vt.) and former Maryland Governor Martin O’Malley.
“A lot of people view [Glass-Steagall] as a litmus test,” Dennis Kelleher, who heads the financial reform advocacy group Better Markets, told The Hill on Thursday. A candidate who supports reinstating the law, Kelleher explained, is saying, “‘I get it, I get it. I will be tough on Wall Street. Trust me.'”
But Clinton is opposed to the idea, putting her at odds on the issue with not only Warren and Sanders, but also Republicans like John McCain and Mike Huckabee.
As the only Democrat who has opposed reinstating a law similar to Glass-Steagall—and has been criticized for her longstanding ties to big banks—Clinton holds a singular position in the presidential race. Her plan to take on Wall Street’s unchecked power, unveiled last month, promises to crack down on financial crimes and risky trading—but, as financial reform advocates cautioned, was “far less bold” than Warren’s and Sanders’ agendas. As CNN Money summed up at the time, “The reaction [to Clinton’s plan] from the banking community was a shrug, if not relief.”
TruthDig‘s Robert Scheer noted last month that Clinton has benefited from her husband’s repeal of Glass-Steagal even as she built her own record regarding Wall Street.
When it comes to the economic policies driving the 2016 election, wrote Scheer, “Hillary Clinton seems to be even less conflicted than her husband in serving the super rich at the expense of the middle class.”
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