I am now officially an economic advisor to Senator Sanders, and this column reflects some of that advice. Part of my advice is not to take money from Wall Street felons. (I am not taking credit for Bernie’s decision — at most I supported a decision he had already made over a year ago.) One of the reasons I reinforced Bernie’s decision was witnessing the problems President Obama experienced given his taking very large contributions from Wall Street. I channeled the prescient warning that Professor Thomas Ferguson (U. Mass, Boston) gave a group of us in 2008. He predicted, accurately, that Obama would not lead an effective crackdown on the endemic fraud by Wall Street elites that caused the financial crisis. Tom (he is a personal friend) is the expert on campaign finance. He authored the classic book on campaign finance entitled Golden Rule (as in the observation that he that has the gold makes the rules.).
Tom pointed out that (then) Senator Obama was accomplishing something unprecedented. He was not only raising more money from Wall Street than the Republicans were, he was doing so in the context of a nomination battle with (then) Senator Hillary Clinton. The Clintons were both preeminent leaders of the “New Democrats.” They crafted the coalition of conservative (on economics and national security issues) Democrats. The New Democrat’s apparatus was funded overwhelmingly by Wall Street and President Bill Clinton was famous for championing the three “de’s” – financial deregulation, desupervision, and de facto decriminalization. Even if Wall Street was willing to reverse decades of contributing primarily to Republicans, why would they choose Senator Obama over their great ally, Senator Hillary Clinton? Tom predicted that Obama would win the nomination and the election – and would reject emulating President Roosevelt’s “New Deal” and its transformation of finance. All three predictions proved accurate.…New Economic Perspectives
The Myth that Obama’s Taking Huge Contributions from Wall Street Was Fine
William K. Black | Associate Professor of Economics and Law, UMKC