The proposals are good and needed. But one could be forgiven for being more than a bit skeptical that Bloomberg will lobby hard for these changes if he becomes president.
See, Bloomberg’s entire modus operandi, up until the past few weeks, wasn’t to criticize Wall Street. Instead, he offered aid and succor to it at almost every possible opportunity. He isn’t, to be blunt, all that credible as a sudden reformer of the financial services industry.
So permit me a suggestion: Bloomberg needs a Sister Souljah moment with the financial services industry, one of those speeches in which a political candidate calls out the more radical members of their base for their bad behavior. (Sistah Souljah is a reference to the 1992 presidential race, when then-candidate Bill Clinton made a speech condemning the hip-hop star for her inflammatory comments about racial violence.)
Because let’s face it: The financial services industry could use a scolding. And Bloomberg could face up to his past enabling of the industry as well.
Not only is the financial community beyond unapologetic for its role in the 2008 financial crisis — the one that Bloomberg’s own release points out cost each and every American about $70,000 — many Wall Streeters are meeting calls for greater regulation, increases in the social safety net and higher taxes on their wealth with insults and invective.
Take billion-dollar hedge fund investor Leon Cooperman, who says he’s supporting Bloomberg. On Tuesday, he told CNBC’s television audience that if Sen. Bernie Sanders (I-Vt.) was elected president, the impact on the stock market would be “a bigger threat than the coronavirus.” It’s hardly Cooperman’s first inflammatory statement. Last year, he sobbed on air while decrying Sen. Elizabeth Warren’s (D-Mass.) proposed wealth tax and claimed she was “sh---ing on” the American Dream.
If you believe in civility, this sort of stuff has no place in political discourse. It’s time for Bloomberg to step up and say so. If he can’t, he has no business running for president.
Bloomberg should also take a moment to talk about why we need the kind of regulation the industry in question doesn’t much like. Wall Street whined and moaned about laws designed to cut down on banks’ excessive risk, claiming they were everything from regulatory overreach to ineffective and intrusive.
They were joined in all this by, yes, one Mike Bloomberg. In a 2014 appearance at the Securities Industry and Financial Markets Association (a major financial services lobbying organization), Bloomberg referred to the Dodd-Frank Act as one of the “stupid laws” promoted by the Obama administration (the other was the Affordable Care Act). He also claimed that representatives from the financial services sector should have taken the lead on drafting the legislation, leaving elected members of Congress with nothing more to do to it than “tweak a little bit.”
Surely a man running for president of the United States knows that allowing private industry to take the lead on making the laws that govern it is a major no-no, and will now forcefully condemn that take.
Also up for a Sister Souljah moment: the Wall Street shibboleths of the housing crisis. Instead of taking responsibility for the fact that almost 8 million homes went into foreclosure during the financial crisis, Wall Street looked to shift the blame. They’ve claimed that poor financial literacy led people to sign mortgages they didn’t understand or that greed led people to buy houses they couldn’t afford. And instead of owning up to marketing predatory mortgages and home equity loans in minority neighborhoods, they blamed the federal government for forcing them to do business in those places.
Bloomberg could — and should — have condemned all this. Instead, in 2015, he repeated the Wall Street bromide that the crisis was caused by federal attempts to end redlining, the long-illegal practice of refusing to issue mortgages to predominantly African American neighborhoods. Really? The housing and real estate bubble was an international one, hitting countries as varied as Spain, Ireland and Iceland — none of which were impacted by U.S. laws banning discrimination.
A Bloomberg speech about the failures of the financial services industry would serve one other purpose, too. We all still live in the shadow of the financial crisis, but we’ve never really reckoned with it in a meaningful way as a society. The stock market recovered, housing prices went back up and all too many people went back to business as usual. But the anger never left: It’s a large part of the reason Donald Trump’s in the White House.
Bloomberg, who earned his more than $60 billion fortune peddling his eponymous news terminal to Wall Street firms, is uniquely positioned to take all of this on. Instead of a socialist outsider, Wall Street would be called to take responsibility for its actions by one of its own. So let’s hear it, Mike Bloomberg! A nation awaits.