“When populist Democrats such as Senator Elizabeth Warren complain about the consequences of Wall Street influence on government policy, here’s what they mean:
Since the March 2009 depths of the credit crisis, the KBW Bank stock index, which includes the nation’s largest financial companies, has gained 297 percent. During that same period, workers’ inflation-adjusted average hourly earnings have actually fallen.”
“Warren’s anti-bank revolt — which almost derailed a government spending bill and may yet cost investment banker Antonio Weiss a top Treasury Department job — signals a widening split among Democrats over economic policy.”
“We’re seeing the same sort of division in the Democratic Party now that we saw throughout the 1980s,” said Stuart Rothenberg, a political analyst. “Between the Clinton pragmatists and the ‘true believers.’”
“Reflecting concern over the financial industry’s prominence in Washington, at least seven Democratic senators have publicly declared their opposition to Weiss, Lazard Ltd. (LAZ)’s global head of investment banking, as undersecretary of the Treasury for domestic finance.”
“It really is a piece of a much bigger debate: whether or not what’s good for Wall Street is good for America,” said Dennis Kelleher, head of Better Markets, a nonprofit group that promotes stronger financial regulation. “The prevailing view, at least since the Clinton administration, is that it is.”
“That view has been shaken by a decade in which the typical American family lost ground: Median household income in October was $53,713, more than 6 percent below the 2000 figure, according to Sentier Research.”
Read the full Bloomberg article by David J. Lynch here.