Bill Clinton and the Bondholders

Bill Clinton entered the White House in January 1993 with an ambitious plan of social programs including the reform of the healthcare system to provide universal coverage. Robert Rubin, a Goldman Sachs boy, joined the Clinton administration as Assistant to the President on Economic policy. After learning of Bill Clinton’s progressive social agenda he simply said that the bondholders would not like it.

“So are you telling me what my administration can do depends on what the bond holders want?” “Yes” was Rubin’s pithy answer.

So, we did not get universal healthcare out of the Clinton administration; instead we got NAFTA, a cruel welfare reform, an acceleration of the war on drugs with a swelling of the prison population by mostly people of color, three-strikes-and-you-are-out and the financial deregulation that led to financial collapse less than a decade later.

This vignette illustrates the power moneyed interests have on our government and on our lives. After spending 20 years in finance and having my moment of personal awakening I have dedicated the last decade of my life to raising awareness among the general public about the power of the money system (money and banking) and of the financial system to shape the world we live in and the operation of our society.

Finance is the éminence grise of our society, so powerful because invisible to many. For example, the Federal Reserve created more than $2.3T of base money  in two months in March and April 2020 to refloat the financial bubble and enrich the wealthy elite. This is an amount close to the total amount of student debt outstanding ($1.5T) combined with credit card debt outstanding ($1T) in the US. No vote of congress was required. No input from the public. No big fuss.

The lens through which I will explore options for a new Shared Ownership Economy Agenda will be the lens of finance.

In terms of how my work locates itself in the coordinates of social change theory, I see myself as illuminating the financial landscape for those involved with changing dominant institutions and helping individuals engage in a personal transformation around the way they relate and deploy their financial resources (mostly their investments). I have been a founding member and local organizer for the Slow Money movement for the first decade of its existence.


Reflection Script

Answering EG’s comment below: to get a full sense of how finance has corrupted our political system just read Robert Scheer’s brilliant The Great American Stickup – How Regan Republicans and Clinton Democrats Enriched Wall Street while Mugging Main Street. (2010)

I would have little to add on the subject.

The most compelling topic for me is what would a financial system compatible with democratic values and ecosystem and social health look like and how do we bring about such transformation?

Here is my attempt at tackling the topic:

How can we Structure the Financial System to be Compatible with a Shared Ownership Economy?

Published by Marco Vangelisti

Marco Vangelisti is a 100% impact investors dedicated to shifting financial capital from Wall Street and the extractive economy towards building the world we want. He helps individual investors, family foundations and financial advisers move towards aware and no-harm investing.

3 thoughts on “Bill Clinton and the Bondholders

  1. Marco, you know I’ve already been deeply inspired by your work to engage in transformation of our financial system. Your post is illuminating in drawing connections between our financial system and politics.
    I wonder if you might explore the integrity and future of our democratic political systems as connected to finance. Democratic principles are central to the shared ownership economy, so perhaps it’s an interesting moment to revisit what those principles are, the way they are hijacked by our current financial system, and what opportunities there are for reform, also beyond the usual ‘campaign finance reform’ agenda. What do you think?
    Thank you so much for being here. It’s so wonderful to learn with and from you.


  2. My current fascination is also on helping find new ways to think about investment without continuing to have investment prop up a system that extracts wealth from the many to accrue to the few. Your example of the $2.3T base money created this spring is an excellent one to show how large the potential flows of capital are, and how misguided and in thrall to lobbyists/finance/industry our political system is, when it comes to large-scale economic gestures.
    My questions:
    1. Is there a role for local currencies to play in your vision of redesigning finance?
    2. Who exactly is your audience when you say you want to illuminate the power that finance has? Thinking about that question through the lens of the theory of change we discussed – is it the power elite that need this illumination? Is it mainstream media? The general public? Investors (who benefit from the current system)? And what is your goal for this audience? What should they do with this knowledge? It sounds like you are mostly thinking in terms of people who are investing – which, as we know, suggests that doesn’t necessarily mean the general public!

    “A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone’s stakes in pension plans, 401(k)’s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans.

    “For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter,” said Edward N. Wolff, an economist at New York University who recently published new research on the topic.


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