Opinion

Hillary Clinton has a Wall Street problem. So does America.

The legitimacy of both parties, and the regime they represent together, won't survive another administration that doesn't deliver any systemic reforms demanded by economic populists

Hillary Clinton and Bernie Sanders had a fierce, if increasingly psychological, debate in Brooklyn Thursday night over the right way to perform moral commitments to justice. But their big fight that we should all focus on is about big banks.

Sanders and Clinton sparred over controversies on the right minimum wage, the right degree of disagreement with Benjamin Netanyahu, and the right term to describe certain violent African-American criminals of the 1990s. But the two Democrats — each vying for the upper hand headed into New York's big primary next Tuesday — also found themselves debating one issue that fuels bipartisan outrage and could actually give way to substantial reform: the size and power of today's financial regime.

Naturally, Sanders played offense, Clinton defense. He said she was too soft on the banks. She said he was too light on detail. He said her judgment couldn't be trusted — after all, she raked in all that sweet Wall Street cash for speaking gigs to Goldman Sachs. She said that was an attack on President Obama — who hoovered up campaign contributions through super PACs and remained, in an analogy viewers must have strained to extend to Clinton herself, incorruptible.

As usual, though Sanders couldn't quite box Clinton in, she almost did his work for him. Her transparent attempt to make the banks issue about loyalty to Obama, rather than about her own political principles, was a rhetorical fraud. It's a well-known matter of public record that the president went from one extreme to the next on campaign contributions — first overstepping his bounds to deride the Supreme Court for its decision in Citizens United, then leaping, years later, into the arms, and cash, of the donors the court defended.

But the president's political judgment about corporate influence is a separate matter from Clinton's about our financial regime. She took huge sums to give private remarks to big banks, and publicly supports little in the way of further reform. So Sanders pounced. "Look, here is the difference and here is the clear difference," he said. "These banks in my view have too much power. They have shown themselves to be fraudulent organizations endangering the well-being of our economy. If elected president, I will break them up. We have legislation to do that, end of discussion."

Clinton's dig at Sanders on the details of that plan lacks sting. In fact, he'd earlier gestured toward two ways to break up the banks — legislation, or executive action through the Financial Stability Oversight Council.

Nevertheless, both candidates ignored the most important thing about the bank debate. It may well be, per Sanders, that our financial regime — which government has merely concentrated further since the financial crisis of 2008 — is powerful enough that it puts our economy at risk. But for the sake of argument, let's allow that Clinton could be right that it's not. And at least one clever commentator, writing at The Guardian, has already helped work out an inevitable strain of liberal logic by arguing big banks aren't an economic risk but a moral one.

Here's what's missing from this debate: The significance of the bank issue, and why it resonates across party lines, is that the risk posed by the current regime is fundamentally political. It's not economic, moral, or identitarian, as so much of the left (and, increasingly, the right) would insist. The problem is that the concentrated power behind the financial regime threatens political freedom in a profound enough way to threaten political stability. Whether big banks and big government are working harmoniously (bailouts) or not (fines), the issue is the same. Although the economic impact of their size has its own serious consequences, at root, the situation calls for the political judgment that rescuing the public's liberty interest from a regime that far too greatly constrains our fates is needed to prevent a loss of governing legitimacy.

It's not that market crashes or venal corruption are fine or worth the risk. (They're not.) It's that economic and moral descriptions of our financial regime don't fully account for its significance to the country, its importance in the public mind, and the urgent need to reform it.

Canny politicians will also realize there's a potent indirect argument for the necessity of ameliorating today's centralized financial power. The legitimacy of both parties, and the regime they represent together, won't survive another administration that doesn't deliver any systemic reforms demanded by populists right or left. At a time when it's clear that immigration and trade will not be subject to big populist reform, there's only one option remaining. Here's looking at you, Wall Street.

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