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Bernie Sanders

Why Is a "Socialist" Trying to Save Capitalism?


Published June 18, 2009 at 9:01 a.m.

Vermont's junior Sen. Bernie Sanders (I) continues to make his presence known in the U.S. Senate. Earlier this year, he made national news when he told Treasury Secretary Tim Geithner, "If an organization is too big to fail, it is too big to exist.”

This week, Sanders was named by Newsweek as one of six Senators pushing back against some of Pres. Barack Obama's economic reforms in an article provocatively titled, "The Insurgents: The Secret Battle to Save Capitalism."

 The other five senators mentioned in the article — all Democrats — are Maria Cantwell of Washington, Carl Levin of Michigan, Byron Dorgan of North Dakota, Dianne Feinstein of California and Jim Webb of Virginia. They and Sanders met with Obama and members of his economic team in the White House.

Here's how the article portrayed the battle between this sextet and Obama's economic team:

The internecine war of wills between the insurgents and the White House economic team has occurred mostly out of sight. But it is part of a larger battle for the future of the financial system — and in some ways capitalism itself. At issue is whether the financial landscape — the size of Wall Street firms, who regulates them and the kinds of things they will be allowed to trade — will look much different once the crisis passes. These senators fear it won't unless they are vigilant.

Author Michael Hirsch singled out Sanders for his efforts to get financial giants such as Citigroup and AIG broken up into smaller firms to avoid them continuing to be "too big to fail."

In fact, Cantwell and Sanders joined forces to put a hold on the nomination of Gary Gensler, Obama's choice to run the Commodity Futures Trading Commission.

As Hirsch points out, the commission was "the key regulatory body that in 1998 had fought unsuccessfully under Brooksley Born to rein in derivatives trading. Born's efforts were beaten back by the Democratic administration under Bill Clinton, including Gensler, who as Treasury undersecretary had opposed regulation of credit default swaps. Those are the financial instruments that later brought AIG—and much of the financial system—to the brink of meltdown."

In other words, the people from the Clinton administration who helped bring about the financial crisis through deregulation or a laissez-faire approach are being put into similar posts during the Obama administration.

Ah, yes, change indeed.