Hillary Clinton's economic advisor, Alan Blinder, co-founded and is Vice Chair of a super-elite Wall St financial firm, Promontory Interfinancial Network. He is a former Vice Chairman of the US Federal Reserve Bank and chair of Princeton University economics department. Let's learn a little about Alan Blinder and Promontory, their ethics, values, world-view, conflicts of interest, and the policies he supports and whispers in Hillary's ear, shall we?
Alan Blinder (would you buy a used car from him?)
First, on Promontory, from Huffington Post:
[Promontory] allowed the high net-worth investor to go around the regulations limiting deposit insurance (at the time, $100,000) and benefit from coverage for near unlimited amounts. The investor would deposit funds in any amount and Prof. Blinder's company would break it up in smaller accounts and invest in banks, thus escaping the limit; it would look like a single account but would be insured in full. In other words, it would allow the super-rich to scam taxpayers by getting free government sponsored insurance. Yes, scam taxpayers. Legally. With the help of former civil servants who have an insider edge.
... In African countries, government officials get explicit bribes. In the United States they have the implicit, never mentioned, promise to go work for a bank at a later date with a sinecure offering, say $5 million a year, if they are seen favorably by the industry.
How much income does Blinder himself make from this, as Vice Chair and related benefits? Not clear, but in the millions; his Chair makes $30 million/year:
Reuters:
$30 million a year makes [Promontory Chair] Gene Ludwig better paid than any executive at any bank. ... Promontory is proof positive, then, of just how lucrative the revolving-door business can be. The company is full of lavishly-paid former regulators, hiring themselves out at $1,500 an hour to banks desperate for advice on how to navigate Washington’s regulatory thicket.
'the firm acts as an advocate for banks, helping draft letters that challenge crucial rules and discussing reforms with regulators'. Regulators are more likely to trust their former colleagues than they are the banks they’re trying to regulate, and by hiring Promontory, banks can co-opt those former regulators and use them to to effectively work the refs.
[Promontory Interfinancial Network's products] are pure regulatory arbitrage, designed to circumvent the legal $250,000 limit on deposit insurance.
What was the business-model? A shadowy network between Promontory and bank regulators:
American Banker:
Promontory Financial Group has built a shadow network between banks and regulators. The firm is a sort of ex-regulator omnibus, capable of forecasting, mimicking and occasionally even substituting for the financial industry's supervisors.
Can one financial firm affect US macro-economic policy, to our detriment? You betcha, if it includes someone like Alan Blinder. In October 2008, the depths of the financial crisis, some in Congress wanted to insure all deposits (as did Germany and Ireland) to stabilize the system -- which would have undermined Promontory Interfinancial Network's business. Alan Blinder and Glenn Hubbard opined in the
WSJ against this -- without mentioning their financial self-interest for opposing it. That's right, in the midst of the worst financial crisis since the Great Depression, they co-authored a WSJ op-ed advocating a public policy that would benefit them at the expense of the American (and entire world's) financial system, and they failed to disclose their conflict of interest.
You can read their op-ed, on the WSJ website.
Yep, Prof. Blinder and this 'gentleman', Prof. Glenn Hubbard (Dean of Columbia's Business School, interviewed here by Charles Ferguson, in Inside Job):
It would be hard to find someone more embedded in Wall Street's revolving doors with regulators/government and legalized corruption than Alan Blinder. (Robert Rubin and Larry Summers are no longer in the game; Hubbard has been exposed by Ferguson's film.) And he is one of Hillary's top economics advisers. Great, just 'great'.
And yes, Alan Blinder is opposed to bringing back the Glass-Steagall Act that regulated banks (contrary to Elizabeth Warren, Robert Reich, Bernie Sanders, Paul Krugman, and others). No surprise, given his clients. If you're waiting for some pasty 1% mainstream economist to econsplain to us why Glass-Steagall would no longer be helpful (because globalization), he's your man.
The Hill:
Hours after Hillary Clinton vowed to crack down on Wall Street, an adviser said she has no plans to push a bank break-up bill beloved by the left.
Alan Blinder, a former Federal Reserve official now advising the Clinton campaign, told Reuters Monday that she has no plans to push for the return of a banking law that separates commercial and investment banks.
Robert Reich, writing on BillMoyers.com:
Hillary Clinton won’t propose reinstating a bank break-up law known as the Glass-Steagall Act — at least according to Alan Blinder, an economist who has been advising Clinton’s campaign. “You’re not going to see Glass-Steagall,” Blinder said after her economic speech Monday in which she failed to mention it. Blinder said he had spoken to Clinton directly about Glass-Steagall.
This is a big mistake.
Reich is right.
Wtf? How deeply in bed with 1% Wall St can the Clintons be? And how blind, ignorant or uncaring can some 'Democrats' be, to tolerate this?