Today I was reminded that Senator Sanders voted against TARP. That made me conclude that Senator Sanders’ position on financial regulation is truly unique.
[graphic update 3/8 10:15 pm Pacific]
Here are the votes on TARP, “Audit the Fed” (discussed here), and Dodd-Frank, presented as a Venn diagram.
It’s obvious that Senator Sanders occupies a unique position in the financial regulatory policy terrain. (Unique is not necessarily the same as good, by the way).
Here’s my take at the time on the advisability of opposition to TARP
During Hillary’s disastrous presidency , I’m going to repeatedly remind people here and wherever I can how we can thank people like you and Krugman for our miserable state of affairs.
*rolls eyes
Marko: Thank you for your reasoned and detailed comment. I’m trying to remember, who’s in favor of declaring China a currency manipulator and imposing 25% tariffs…(Hint: it’s a guy with a spray tan, and a guy from Vermont).
Sanders doesn’t like large banks… hates large banks? So his votes against large banks are consistent, especially his vote against TARP. https://berniesanders.com/issues/reforming-wall-street/
Was his vote against TARP just bad timing? Do you agree that large banks should be broken up? The telecom monopoly was. Microsoft and Google get their share of threats from the government. Is it odd that someone who distrust large corporations should love huge government? Isn’t the problem “bigness”? Or is it just that “someone else” controls big business while “we” control big government? “We” being Bernie and his friends.
Bruce Hall: I did not say his views were internally inconsistent. I was highlighting the uniqueness of his position in the political sphere. If I had added his vote on the Commodities Futures Modernization Act, then the degree of internal inconsistency would increase.
Actually, Bernie Sanders’ first vote on CFMA, was for a much less unrestricted approach than the final version (which he also voted for), but which was included in a general funding bill with far more freedom for derivatives than would have ever met with Sanders’ approval as a stand alone bill. So, while he was technically inconsistent, he was only somewhat… indirectly… inconsistent on this issue.
Sanders doesn’t mind “bailouts”… just not for financial institutions. Somewhere, sometime, a bee got in his bonnet and is still buzzing there when it comes to banking and Wall Street. He believes that government should be the source of funding for most large-scale efforts and distrusts the capitalist approach that has given the U.S. so much of an advantage in new wealth creation… and job creation… over much of the world. He is quick to jump on banking failures, but not so much on financial institution successes.
Gotta love the idea that Sanders gets a pass for something he voted for that goes against everything he believes because it was not a stand alone bill. His vote meant absolutely nothing to the future of the country, it was not needed. Personally, I think he(or his staff) just got lazy. But that still counts.
Bruce Hall Sanders’ economic ideas are confused, but that doesn’t mean his criticisms are without merit. The bee in Bernie’s bonnet is not market economics per se, but crony capitalism…and the TBTF banks are Exhibit A in that regard. You mentioned wealth creation, but as a wise man once noted, aside from ATMs the big banks haven’t really done a lot in terms of adding value not grounded in rents. No industry has been fined and penalized for fraud as much as the TBTF banks, so something is clearly wrong with the economic model. You would be hard pressed to identify very many successes coming out of our major financial institutions. Sanders is wrong in believing that breaking up the banks is sufficient to fix our financial system; but that doesn’t mean breaking up the banks wouldn’t be a good start.
Sanders’ problem is that he is too much of an ethical purist who, if I can borrow a Sartre term, cannot stand having “Dirty Hands.” I’m not particularly bothered by his confused and woefully inadequate understanding of economics. Hey, good economists are a dime-a-dozen and he can always find plenty of good economists who would be more than willing to work in his administration. Economic illiteracy is a correctable fault. What does bother me about Sanders is that he thinks good intentions beget good results, and bad or ethically compromised intentions beget bad or ethically compromised results. That’s an infantile view of politics, and it’s not the kind of thing that a team of good advisors can overcome. A President Sanders would probably be a disaster, but no more of a disaster than a President Trump or a President Cruz or a President Rubio. The Republican candidates are full of crackpot economic theories as well, but they are less morally restrained than Sanders. But a candidate Sanders is probably very helpful to the body politic because he acts as a “pike in a carp pond”; i.e., he keeps the carp active and moving. Hillary Clinton is a better candidate because of Bernie Sanders.
2slug, If Sanders was explicitly railing against crony capitalism, he would be attacking the Clinton Foundation. Talk about personal wealth creation as a result of pandering to those trying to get their share of influence in government and their piece of the government spending pie.
Bruce Hall Actually, Bernie Sanders has criticized the Clinton Foundation. He’s been quite vocal about it:
http://abcnews.go.com/Politics/senator-bernie-sanders-calls-hillary-clinton-foundation-money/story?id=30687863
That said, as crony capitalism goes, the Clinton Foundation is pretty weak stuff. No Clinton has held elective office in 3 years, so it’s a little hard to see how they had any significant opportunity to trade legislation for dollars. I would worry more about Sen. Ted Cruz, whose wife actually gets a very large paycheck from Goldman Sachs.
I believe Dorgan voted for Dodd-Frank.
Cantwell too – you have them listen for voting for and against Dodd-Frank, a paradox!
Mike Konczal: Thanks again! Yes, you are right. Now corrected; note this makes Landrieu, Tester, Wyden less “unique”, but keeps Senator Sanders in his singularly unique position alone.
Mike Konczal: You are right! I have moved him into the correct cell. Thanks!
My understanding, from reading Dean Baker and others, is that the Fed already had the authority to prop up the commercial paper market without TARP. WRT currency manipulation, I believe China is holding four times the amount of reserves that is normal for an economy of its size, which raises the value of other currencies against the yuan.
“The minimum wage in Denmark is about twice that of the United States, and people who are totally out of the labor market or unable to care for themselves have a basic income guarantee of about $100 per day.” – Bernie Sanders
I wonder if he understands the concept of “incentives.”
If someone in Denmark makes $15 an hour or $600 a week (assuming a 40 hour workweek and no taxes), then why lose money by working?
Here’s what someone from Britain, who moved to Denmark, said a few years ago:
“The Nordic Countries “success story” economies are a joke. I’ve been living here the last couple of years after being dragged here by my wife, and trying to run your business here is tough. It just isn’t a business friendly place at all. Taxes in Denmark are 60-odd % as soon as you have the cheek to earn more than £35,000 a year! My guess is that 50-70% of the population are in government jobs, and they rely heavily on exports of oil, timber and fish in order to generate the foreign earnings to pay for it all.”
Nice source. Nice thought processes.
“As you can see above, both before and after the global economic downturn the share of the Danish population that works is substantially above the OECD average. The United States, which has one of the stingiest welfare states in the OECD is also above average in this regard. But Denmark exceeds even the United States in terms of the share of the population that’s working.”
http://www.slate.com/blogs/moneybox/2013/04/21/danish_welfare_state_employment_population_ratio_highest_in_denmark.html
that is the danger of using anecdotal evidence. it is not uncommon for a small business owner to blame his struggles on the corrupt system, when it might very well be the case the owner himself is not that efficient. it is hard for some people to accept they may be to blame-easier to blame the “system”.
The Danes seem willing to work and pay high taxes for a strong safety net. Someone from Britain may not want to live in a society where human potential is constrained by equality. What may work in a small homogeneous country may not work in a large diversified country.
agreed. this is why using the brit as anecdotal evidence of poor business culture in denmark is inappropriate. denmark has its rules, and they do seem to be working rather well. the brit is unsuccessful, because he cannot accomodate the local rules. he feels he can win if they follow the british rules-and so the current system must be “wrong”. business owner is the problem, not the danes.
i would add, your comment on the human potential is constrained by equality is hyperbole. denmark is successful compared to most other advanced countries. the people are happy. not much evidence of constrained human potential.
Car ownership is low in Denmark, because prices of cars are very high, the sales tax on a new car is 180%, and gasoline was over $8 a gallon not long ago. It seems, they ride bicycles often, while being drunk, and take a lot of “happy” pills. I wonder what kind of houses they live in? I heard, a meal at a cheap restaurant is 50% higher than the U.S..
Also, I heard, parking tickets are high.
“There is a certain sense that the driver should be slightly ashamed to be driving a car at all. Real Danes drive bicycles.
This is partly a tenet of environmentalism – the Danish national religion – and partly because of an egalitarian conviction that no one in Denmark should have anything unless everyone else has one. The Danish government subscribes to both of these principles, and makes car ownership as difficult as possible.”
Here’s a revealing story about buying a car from a dealership in Denmark:
http://www.telegraph.co.uk/expat/9853662/Buying-a-car-in-Denmark-even-a-banger-costs-a-fortune.html
So let me get this straight.
We have gone from the lack of incentive to work to the high cost of cars and expensive parking tickets.
Geez
Consumption has something to do with production.
peak, it is obvious the danes are a happy people with a successful economy. you call them druggies who ride bikes and despise cars. these are odd comments. most new yorkers do not own cars. not that big of deal. you imply it is wrong for people to not spend $30k plus on a hunk of metal that uses a global warming fuel source. odd. that cash is probably better spent on other items not destructive to the environment.
it was interesting to compare the disparaging quotes peak used by the brit who struggled to run his business, with the heritage foundation assessment of business climate in denmark;
“The regulatory environment remains one of the world’s most efficient, and starting a business takes fewer procedures than the world averages. Relatively flexible hiring and dismissal regulations sustain an efficient labor market. Monetary stability is well established. June 2015 parliamentary elections centered on which party could best be trusted to deny immigrants access to Denmark’s generous welfare-state subsidies.”
even heritage thinks it is easy to run a business in denmark. again, perhaps peak was quoting a poor businessman who is unable to acknowledge the problem is him and his expectations, rather than denmark.
Baffling, if regulations didn’t make it easier to start a business in Denmark, I doubt there would be many businesses, given high taxes. That doesn’t mean Denmark isn’t a heavily regulated country. Also, labor can easily move from a job to a strong safety net – back and forth – whenever a worker feels like it, unless you’re an immigrant.
That doesn’t mean Denmark isn’t a heavily regulated country and taxes aren’t high. And, immigrants are denied welfare. So, they can’t move back and forth between a job and welfare, whenever they feel like it.
“That doesn’t mean Denmark isn’t a heavily regulated country and taxes aren’t high.”
peak, the performance of denmark would indicate you need to reevaluate your assessment of heavily and high. in your opinion that may be the case, but the performance of the country indicates that is not the reality. your ideology does not appear to apply to denmark.
Although, being addicted to a safe, secure, and easier life is satisfying, it’s not without costs.
I’m just revealing some of the costs.
Pretending those costs don’t exist or ignoring them don’t make them cheaper.
“Although, being addicted to a safe, secure, and easier life is satisfying, it’s not without costs.”
take a trip through east cleveland sometime. or overtown in miami. there is a significant cost to not having access to a safe, secure and easier life. you should not pretend those costs do not exist either.
Maybe, we need to spend trillions of dollars on a War on Poverty or get Democrat politicians to run the city.
Wouldn’t that be better than making everyone ride bicycles and making people, who work, pay a lot more in taxes?
🙂
peak, maybe you should dispel the myth of the welfare queen. i do not believe you understand, nor have an interest in understanding, the origins of problems of inner city areas.
What about the even poorer immigrants the Danish don’t want to help with their “generous” welfare?
what is your point peak? would denmark be in better shape if they diminished the social safety net for everybody?
peak, you seem to have made up your mind denmark is foolish, and simply go digging for anything you can find as disparaging. denmark does appear to be doing rather well. simply accept that a socialist democracy does not have to be a nightmare. this is why i deride your views as ideological.
peak said, “Although, being addicted to a safe, secure, and easier life is satisfying, it’s not without cost”
No, way, man, I’m addicted to the virtues of a pure and unrestricted, gently-stroking and well-lubed Invisible Hand that gives us the joys of unsustainable inequality, instability, poverty, poor health, anxiety, homelessness, unserviceable personal debt, and especially, erratic and volatile boom and bust cycles that can only be resolved by giving even more money to the Heroic Creators of Jobs who already have so much money that they use their duly-earned corporate welfare to buy back and goose their own stock prices.
Give me utility or give me death!
Why concern yourself with something like “cost” when everyone can ride a bicycle, exist in a tiny shelter, and equally overpay for a meal?
Maybe, you’re having your free lunch, while waiting for a helicopter to throw money out the window to raise your utility.
“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard.” – JFK
peak, we spent an enormous amount of money on STEM education and research during the moon shot period. there is a cost to everything.
Again, you miss the point of a safe, secure, and easy life, while denying the costs.
the costs are affordable, according to the success of denmark. you want these costs to be unaffordable, but reality is saying otherwise in denmark.
The slate article doesn’t provide a good explanation. Try this: http://www.economics-ejournal.org/economics/discussionpapers/2014-11/file
Woman make up a larger share of the workforce in Nordic countries. Part of the reason is government policies towards increased participation by women such as neutral tax treatment of second earners, childcare subsidies and paid paternal leave. While welfare benefits create an incentive not to work for particular groups ( like singles), the reduction in participation is offset by incentives to families and women in particular.
Does this mean no Senator voted for TARP and against Dodd-Frank and Audit the Fed?
Jeff: Hard to say; would have to do the tabulation explicitly I think.
Sanders may be confused, but he is in every respect more honorable than HRC.
Trump vs. HRC would mean plague vs. cholera, omg I tend to even prefer plague in that case.
Freshman econ students should be required to take a course in critical thinking and elementary logic.
If you’re for X, but against Y, being against X+Y doesn’t mean you’re against X. How hard is that to understand?
Even after two beer to much, you are very wrong : the post above yours never states he is for X.
If you are against X, and if you are against Y, and if you are against X+Y, even a fresh econ student with limit mental abilities after to many beers may understand that choosing between X and Y can be essential to avoid worse.