Elizabeth Warren

Will the Democratic Nominee for 2016 Take on the Moneyed Interests?
Robert Reich
3/3/15

The big unknown is whether the Democratic nominee will also take on the moneyed interests -- the large Wall Street banks, big corporations, and richest Americans -- which have been responsible for the largest upward redistribution of income and wealth in modern American history.

Part of this upward redistribution has involved excessive risk-taking on Wall Street. Such excesses padded the nests of executives and traders but required a tax-payer funded bailout when the bubble burst in 2008. It also has caused millions of working Americans to lose their jobs, savings, and homes.

Since then, the Street has been back to many of its old tricks. Its lobbyists are also busily rolling back the Dodd-Frank Act intended to prevent another crash.

The Democratic candidate could condemn this, and go further -- promising to resurrect the Glass-Steagall Act, once separating investment from commercial banking (until the Clinton administration joined with Republicans in repealing it in 1999).

The candidate could also call for busting up Wall Street's biggest banks and thereafter limiting their size; imposing jail sentences on top executives who break the law; cracking down on insider trading; and, for good measure, enacting a small tax on all financial transactions in order to reduce speculation.

Another part of America's upward redistribution has come in the form of "corporate welfare" -- tax breaks and subsidies benefiting particular companies and industries (oil and gas, hedge-fund and private-equity, pharmaceuticals, big agriculture) for no other reason than they have the political clout to get them.

It's also come in the guise of patents and trademarks that extend far beyond what's necessary for adequate returns on corporate investment -- resulting, for example, in drug prices that are higher in America than any other advanced nation.

It's taken the form of monopoly power, generating outsize profits for certain companies (Monsanto, Pfizer, Comcast, for example) along with high prices for consumers.

And it's come in the form of trade agreements that have greased the way for outsourcing American jobs abroad -- thereby exerting downward pressure on American wages.

Not surprisingly, corporate profits now account for a larger percent of the total economy than they have in more than eight decades; and wages, the smallest percent in more than six.

The candidate could demand an end to corporate welfare and excessive intellectual property protection, along with tougher antitrust enforcement against giant firms with unwarranted market power.

...The candidate could also propose true tax reform: higher corporate taxes, in order to finance investments in education and infrastructure; ...

She (or he) could likewise demand higher taxes on America's billionaires and multimillionaires ...

Not the least, taking on the moneyed interests would necessitate limiting their future political power. Here, the candidate could promise to appoint Supreme Court justices committed to reversing Citizens United, push for public financing of elections, and demand full disclosure of all private sources of campaign funding.

But will she (or he) do any of this? ...