Friday, May 01, 2015

Senator Warren: Wall Street is "cheating American families"

Good profile of Elizabeth Warren in the May 4 New Yorker (The Virtual Candidate):

[Hillary] Clinton’s advisers are respectful of Warren, but they privately argue that Clinton has a more sophisticated understanding of the economy, and that Warren places too much blame on Wall Street as the root of America’s economic problems. “The challenge of wage stagnation is that it’s happening in large swaths of the economy, many parts of which are relatively untouched by the influence of the banks,” a longtime Clinton adviser said. “There is a legitimate line of economic thought that countries without as large a financial sector as the U.S. have less inequality, but Goldman Sachs doesn’t really have much to do with the rise of Uber and TaskRabbit.”

Warren took exception to the Clinton camp’s critique. "I think it’s important to hold Wall Street accountable" she told me. "Some of the biggest financial institutions in this country developed a business model around cheating American families, and they put out the riskiest possible products. They sold mortgages that were like grenades with the pins pulled out, and then they packaged up those risks and sold them to pension plans and municipal governments, groups that did not intend to buy high-risk financial products. That’s how Wall Street blew up the American economy. That’s a genuine threat, and that’s worth paying attention to."

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