YouTube

Interviewer:

What did you take away from the Goldman Sachs hearings?

Clinton: … [comments on Goldman Sachs/SEC lawsuit]

I think there’s a bigger problem here, which is that too much of our growth in last decade was in finance & ever since we went off the gold standard, which was necessary fro economic management purposes . . . .

We had a global financial economy before we had a global trade economy and certainly before we had any global environmental & labour safeguards. Ever since then economic inequality has increased. The only time the bottom twenty-percents’ income increased in percentage terms more than the top twenty percent since then was my the second four years of my term because labour market got so tight and because health care costs were in line with inflation so you didn’t have employers pouring what would have been wage increases into health care premiums and because of some other support things that were done.

But I think the fundamental problem is articulated by your friend, John Vogel, a good Republican, who pioneered the index mutual funds, and he said that people in his business where he spend a lifetime are taking too much out of the middle of the economy. Finance is gobbling up too much dollars.

For example, if you a farmer in east Arkansas you want to hedge [against bad crop or low prices]. That [hedging] has a legitimate economic purpose. What purpose was served by this [Goldman-Sachs/Paulson trading]? . . . Suppose Paulson had lost money and Goldman Sachs had made money?
?Either way, what happens? If Paulson makes money …, it confirms people’s sense that the housing market is going down. On the other hand [if opposite happened] it would keep people pouring into an unsustainable bubble.

… I think too much of this stuff has no economic purpose, no matter who wins or who loses, and that’s the bigger problem. … [We need to reduce leverage and increase transparency by clearing house system & regulation].