When it came right down to it, David Dayen writes, Hillary Clinton picked the Warren side:
Many attribute the light-touch punishment of Wall Street executives who presided over the financial crisis — a group that includes Rubin himself — to the dominance of the Rubin wing.
Since coming to the Senate, Warren’s primary preoccupation has not necessarily been legislation but who would carry out policy inside the Obama administration. Warren was instrumental in preventing Larry Summers from chairing the Federal Reserve. She also waged a public battle to block former investment banker Antonio Weiss from the No. 3 position at Treasury; Weiss withdrew his name and went on to serve as a counselor.
And now the leading candidate for president on the Democratic side just endorsed a bill saying that the payments people like Lew and Froman have received from Wall Street firms should be made illegal under U.S. bribery laws. Suddenly, the money train that the financial sector uses to help ensure that their interests are protected in Washington has become toxic.
The Financial Services Conflict of Interest Act would also extend the lobbying “cooling-off” period for officials rotating out of government from one to two years, and force policymakers to recuse themselves from decisions that would benefit their former employers. But it’s the crackdown on accelerating deferred compensation, theoretically used to keep top executives in their jobs (rather than reward ones who leave to serve in the government), that carries a sting. You can only view these payments in one of two ways: either as a waste of shareholder money, or a bribe to government officials.
Normally, endorsing legislation is one of those perfunctory check-the-box activities that presidential candidates engage in without much meaning, especially when Congress is likely to be partially controlled by the opposing party. But this bill is entirely about the personnel that would serve in the next administration. Clinton can “enact” much of it simply through her decisions on staffing the executive branch.
Clinton had to make a choice because she was cornered by the golden parachute payments her top aides received from their former Wall Street firms when she served as secretary of state. Progressive groups allied with Warren used this as a hook to demand Clinton’s position. Warren herself kicked this off by publicly challenging all presidential candidates to support the Baldwin legislation in July. Clinton’s main challengers for the nomination already endorsed the bill.
Going after the golden parachutes Rubinites have enjoyed could have a chilling effect on who decides to enter government, and will change incentives around accepting jobs on both Wall Street and in Washington. That could change the mix around personnel in the next Democratic White House.
Obviously, Wall Streeters who hope to join a Clinton administration could go to work for the government and leave millions of dollars on the table. But even so, the anti-revolving door principles of the Baldwin bill would likely be thrown in the face of every prospective hire. The untainted options would come from the Warren wing; Rubin wing possibilities would have to operate under a cloud. Hillary Clinton has been forced to pick a side in a quiet but important war, and her decision suggests that the potential 2016 Clinton transition would look a lot different than the 2008 Obama one.