"The second and probably more important observation is about Hillary's rhetorical choices.
"Clinton, like her close adviser Barney Frank, the former Massachusetts congressman and co-author of the Dodd-Frank financial reform bill, has been pushing an idea that banks aren't at the root of any financial instability problem. Last night, she pointed a finger instead at 'shadow banking,' non-bank actors like AIG, and a dead investment bank in Lehman Brothers. (Interesting she didn't mention a still-viable investment bank like Goldman Sachs, which has hosted her expensive speaking engagements.)"
Taibbi looks at Clinton's proposals and finds a few weaknesses. He points out that there are and have been regulatory tools but they are not used. But Clinton's plan gives regulators leeway, and wonders if we can trust her administration to crack down and enforce.
"But my reading of her proposal is that it doesn't contain an automatic mechanism. Hillary's plan would merely give regulators the authority to do something about risky companies.
"'Clinton did say large firms should be required to 'downsize or break apart,' says Dennis Kelleher of the Wall Street watchdog group Better Markets. 'But only if they can't prove to regulators that they can be managed effectively.'
"It's a subtle difference. But such subtle differences between real action and ambiguous verbiage are what turned the Dodd-Frank bill into a mountain of legislative leprechaun tricks, as opposed to the sweeping, simple, FDR-style reform of a plainly corrupt marketplace that it should have been.
"Whether or not you think Hillary Clinton plans on doing anything to fix Wall Street corruption really comes down to your read on her intentions."
So Taibbi says it all comes down to trust that a Clinton administration will enforce the rules -- something we haven't seen an administration do for decades. The Obama administration notoriously refuses to criminally prosecute banks and bankers. Instead they impose fines that are paid by shareholders and not the executives who did bad things. The Bush administration's famous lack of enforcement brought us the financial collapse. The Wall Street-friendly Bill Clinton administration repealed Glass-Steagall. (His Treasury Secretary then left to head a firm created by that move -- and received hundreds of millions of dollars for it.) But Krugman says maybe we can trust Clinton now because Wall Street lately is giving most of its money to Republicans.
Most of the public discussion has been focused on the top two contenders, but Martin O'Malley's proposals also merit consideration. O'Malley says he has "independence" from Wall Street that Clinton does not. On "The Daily Show" on Monday, O'Malley...
"accus[ed] the former senator from New York of being too close to Wall Street to protect Americans from the 'excesses' of big financial institutions.
"'I believe I have the independence to actually get that done, and I do not believe that Hillary Clinton does,' Maryland's former governor told the show's new host, Trevor Noah."
O'Malley's position paper stresses enforcement and anti-corruption steps for regulators.
"As President, Governor O'Malley will change the culture of our regulatory and oversight agencies and departments by immediately pursuing the following reforms to ensure that Wall Street megabanks don't get to play by their own set of rules. He will provide real deterrents to recidivist behavior among the worst actors on Wall Street."
Martin O'Malley explains how to make an honest buck on Wall Street: