Krugman’s blog, 10/14/15

There were two posts yesterday.  The first was “Actually Existing Hillary:”

The commentariat seems to have turned on a dime. After trashing Hillary Clinton nonstop, they’re all talking her up. And you can see why, given the revelations that (a) the whole Benghazi thing, including the email obsession, was a partisan witch hunt and (b) Clinton herself is smart, articulate, and has a good sense of humor.

But the odd thing about these revelations is that they weren’t at all revelatory. We shouldn’t have needed McCarthy blurting out the obvious for the press to acknowledge that the Benghazi investigations have utterly failed to find any wrongdoing; and Clinton has been in public life a long time, so that her strengths were or should have been well known.

The funny part is that in the end she may benefit from the trashing, which has turned what might, indeed should have been a pretty boring narrative of a strong candidate cruising to the nomination into a comeback story. Just to be clear: she wasn’t at all the horrible figure the usual suspects portrayed, but she’s not the dominant figure you’re reading about today. Actually existing Hillary is a qualified, plausible candidate for president, no more — but given the Republican field, that’s quite a lot.

Anyway, it’s quite sad that after all these years political coverage still treats the momentous issue of who will lead the world’s most powerful nation like a high school popularity contest.

His second post yesterday was “The Waaaaah Street Factor:”

Following up on my point about how this is looking like a Dodd-Frank election: to understand what’s going on this election cycle, you really need to know about the dramatic shift in Wall Street’s political preferences.

There was a time when Wall Street was quite favorable to Democrats. Partly this was probably cultural: finance does, after all, center in New York, it tends to be fairly liberal on social issues, and it’s not comfortable with what Ben Bernanke calls the “knuckle-draggers.” Partly it reflects the reality that the economy has tended to do better under Democrats. And for a long time, to be frank, Democrats were all too willing to go along with financial deregulation.

But that all changed in 2010, when Democrats actually pushed through a significant although far from adequate financial reform, and Barack Obama said the obvious, that some financial types had behaved badly and helped cause the crisis. The result was a great freakout — the coming of “Obama rage”.

Wall Street doesn’t like the regulations, which really do seem to have more or less eliminated the implicit too-big-to-fail subsidy. Beyond that, with great wealth comes great pettiness: financial tycoons are accustomed to constant deference, and they went berserk at even the mild criticism they faced.

You can see the result in the chart: a drastic shift of campaign giving away from Democrats toward Republicans. And this will have consequences: if a Republican wins, he or she will be very much in Wall Street’s pocket. If a Democrat wins, not so much.


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