Commentary

When Sanders Says 'Wall Street' He Means Much More: Read My Lips

Blaming bankers and billionaires for racial injustice and climate change.

Presidential Candidate Bernie Sanders Wall Street Reform Policy Speech

Senator Bernie Sanders takes the stage with the day's Wall Street talking points.

Michael Nagle/Bloomberg

In making "The Big Short" -- the movie, not the Marco Rubio story -- director Adam McKay recognized that few of us have a clue, even now, how and why our financial sector melted down in 2008. Hence those quirky primers delivered directly into the camera by a bubble-bathing Margot Robbie (on the rise of the mortgage-backed security) and Selena Gomez (on synthetic CDOs).

If Bernie Sanders wins the presidency and gets his chance to do battle with Wall Street, will he be giving those primers or receiving them?

Nobody's saying the senator from Vermont is the Rick Perry of democratic socialists, someone who wears glasses to look smarter than he really is. It's just that for a guy who blames Wall Street's "greed, recklessness and illegal behavior" for everything short of airport weather delays -- and who gave a major policy address on the topic this week at New York's Town Hall -- he comes across as less than conversant in the devilish details of finance.

"I just want you to give me specific examples, current examples if you can," of Wall Street's greed, recklessness and law-breaking, Mark Halperin asked Sanders during an interview on Bloomberg Television's "With All Due Respect" following his Town Hall speech. 

It's becoming clear that candidates sitting down with Halperin or his co-host, John Heilemann, had better be prepared to go beyond their standard stump speeches. Sanders wasn't.

Wall Street caused "the worst economic downturn in the history of the United States," he talking-pointed. Americans "haven't heard an apology from these guys yet." Also, "these guys continue to receive huge compensation packages" and "continue to come up with complicated financial instruments which, I think, have the potential to do serious harm in the future."

Yeah, we've heard that before. Sorry, you failed the quiz. We would have accepted supranational bond manipulation, Libor rigging, currency spoofing or any of the many other alleged misdeeds being prosecuted or investigated right now. It's enough to make you wonder if Sanders knows his CDOs from his SPVs or his tranches from his swaps.

Or even if he cares to.

"Generally speaking, what appears in the Wall Street Journal is of no concern to me," he boasted in "Outsider in the House," a 1997 book that's been recycled this campaign season as "Outsider in the White House."

Yet Sanders blames Wall Street for a breathtaking menu of ills. He's managed to suggest that young marijuana smokers get arrested because crooked bank CEOs don't. He seems to believe that the financial system doesn't just perpetuate inequality in America but had a hand in creating it.

The specter of Wall Street is always looming, even in Sanders' position papers on other matters. How to stop climate change? "Reclaim our democracy from the billionaire fossil fuel lobby." Offer college for free? Impose a tax on "Wall Street speculators who nearly destroyed the economy seven years ago." Address racial injustice? Create 1 million jobs for young Americans "by ending the loophole allowing Wall Street hedge fund managers to pay a lower tax rate than nurses or truck drivers."

And so on. Call him Bernie One-Note, or Bernie Boomerang, because no matter what the direction, the discussion always comes back to Wall Street.

Nobody really means Wall Street when they say "Wall Street." It's shorthand for -- take your pick -- the big investment banks that traditionally call lower Manhattan home, or investment firms generally, or the finance industry as a whole, or, at its most extreme, the modest human desire to turn today's $1 into $1.05 a year from now.

Sanders, by all appearances, subscribes to one of the latter definitions.

In his epic 2010 speech opposing extension of the George W. Bush tax cuts, Sanders said, "A few years ago, Wall Street earned some 40 percent of all profits in America." That's accurate only if "Wall Street" is synonymous with what the Bureau of Economic Analysis -- the source of that number -- broadly defines as the entire American financial industry, which includes all commercial banks, savings institutions, credit unions, real-estate investment trusts, bank holding companies and insurance companies.

Under those rules, "Wall Street" would encompass Valic, the Houston-based unit of AIG that offers insurance, annuities, financial advice and investment planning and has more than $88 billion in total assets under management. Its 2 million investors include a certain would-be first lady named Jane O'Meara Sanders, who, according her husband's latest financial disclosure form filed with the Senate, had somewhere between $71,000 and $365,000 invested in mutual funds through Valic as of October. (The senator himself favors TIAA-CREF funds. Apparently even Wall Street-bashing socialists don't store their cash in their mattress these days.)

While Valic is no Goldman Sachs when it comes to bad publicity, it isn't immune from criticism. Teachers in West Virginia who sued Valic say it misled them into investing their retirement savings in low-return annuities in the 1990s. (Valic's press office didn't return a call for comment. The company has said in the past that the lawsuit is "without merit.") If Sanders has a method of discerning which finance firms are deserving of his family's nest egg, rather than of his scorn, he hasn't shared it.

Sanders, of course, isn't the only upstart presidential candidate who draws huge crowds and likes to paint with a broad brush. A few more steps in Donald Trump's direction and Sanders might be proposing a temporary ban on bankers entering the United States until we can,  you know, "figure out what's going on."

(Read My Lips is a column dedicated to the proposition that men and women in a position of power, or the pursuit of it, will say or do things for which they will be sorry.)

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