Like any good trick football play, Presidential candidate Hillary Clinton’s misdirection on shadow banking requires a few enablers.
First, your susceptibility — or abundant willingness — to have your attention diverted from where the ball actually is.
Second, a diversion — or a series of them — to take advantage of your susceptibility.
Third — which is a bonus — the shortage of any scouting report or coherent analysis of the play’s occurrence, which helps you fall for the same trick each time.
The misdirection makes Clinton’s fear-mongering soliloquies about how shadow banks silently helped to create the 2008 financial markets meltdown — thus subject to stronger scrutiny than the Too Big To Fail Banks are — serial fake handoffs.
Meanwhile, Clinton runs upfield carrying the ball she never wanted you to see: policies which will do nothing to stop TBTF banks from being a danger to society. This likely explains why TBTF banks pay Clinton so well.
Clinton’s play rests on the hope that you’ll forget how the 2008 crash has its roots in TBTF banks writing known risky mortgages and then selling those risks as securities in the financial markets.
For example, a so-called shadow bank like AIG would have one less reason to exist in 2008 if TBTF banks didn’t need the firm’s insurance policies to cover the inevitable default of securitized toxic mortgages.
In fact, many of the so-called shadow banks’ business activities would not exist without the funding or precipitating activities of TBTF banks.
I suggest reading David Dayen‘s shadow banking piece on Naked Capitalism for a complete dismantling of an important part of Hillary Clinton’s campaign playbook …
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