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One hundred and twenty years ago, populism and financial regulation were the top issues in the presidential election. William Jennings Bryan gave his celebrated “Cross of Gold” speech to fan the populist flames. While Bryan lost that election (and two more) the passions were still so high later that L. Frank Baum wrote “The Wizard of Oz” as an allegory to the debate.
This election has many similarities, and recently we outlined how the Republican platform plank calling for a restoration of Glass-Steagall will harm the ability of American businesses to compete in a global economy.
Next up is Sen. Elizabeth Warren’s speech on Monday’s opening night of the Democratic National Convention – a speech that one would expect to be closer to the “Cross of Gold” model. A few weeks ago, we outlined how Sen. Warren’s “Take on Wall Street Agenda” was a recitation of tired ideas that should be called the “No Growth Agenda,” so as you tune in to her speech on Monday and the rest of the DNC proceedings in Philadelphia, here are five things (plus one bonus item) to watch for:
- Will Sen. Warren look to the future, or outline Depression-era ideas that don’t work in the 21st century? Senator Warren has called for failed Hoover style policies such as a financial transaction tax, a tax eventually repealed by Presidents Kennedy and Johnson because of its harm to the markets and economy. The U.S. financial system is incredibly diverse and innovative. Will Warren look to the future and help boost economic growth, or remain stuck in the past and limit America to, at best, 2% growth?
- Will Sen. Warren one up the Republicans and call for a break-up of the big banks? The truth is that we live in a global economy and businesses need global banks to finance trade deals or to underwrite the sale of stocks and bonds. Breaking up banks will force businesses to turn to foreign banks and raise the cost of capital.
- Will Sen. Warren and the Democrats call for regional and community bank relief? Smaller banks are increasingly ensnared in systemic risk regulations meant for larger institutions. This is harming Main Street businesses ability to get the cash they need to grow and operate. Many have called for reforms, but Main Street is still waiting for Washington to act.
- Will Sen. Warren continue to criticize SEC efforts to boost the number of public companies in the United States? The number of public companies in the United States has dropped in 19 of the last 20 years and we have less than half the public companies than we did in 1996. Businesses and investors agree that the current disclosure regime, rooted in a paper-based 1930s system, is an impediment for businesses going or remaining public. The SEC has started to outline plans to reverse this problem, yet Sen. Warren has been highly critical.
- Will Sen. Warren look to turn the Post Office into a Bank? Senator Warren has in the past proposed making the Post Office a financial institution despite the troubles it has in meeting its current mission and the total lack of financial expertise. Such a plan would not help Main Street or consumers, but would simply grow the government.
And one bonus question—
- BONUS: Will Sen. Warren and Democrats call for regulatory reform and streamlining? Our financial system is regulated by a multitude of agencies that have overlapping jurisdictions that lead to turf battles rather than good policy. The Dodd-Frank Act exacerbated this problem by creating more agencies as a part of this tangled web. Will we hear about any proposals to make the regulatory system rational and able to execute its mission?
Over a hundred years ago, William Jennings Bryan, William McKinley and Theodore Roosevelt had passionate debates about the direction our country needed to take for a prosperous future. Too often the current debates are about growing the power of government or settling old scores.
As Chamber President and CEO Tom Donohue said last month in New York:
“Let’s check partisanship at the door so that we can come up with real solutions and allow America’s job creators to get to work. Yes, America’s economic engine has been sputtering because we cut off the fuel supply. Let’s fill up the tank and put the pedal to the metal and get this economy growing again.”
America needs a pro-growth agenda and not tired worn partisanship. Let’s listen on Monday and next week and find out where this election may take us.