Chang Wei
My Experience With Politics While Living in DC
Chang Wei
Spring 2016
Living in DC has taught me many things about politics. With the current on presidential campaign going on, I decide to write my experience here in DC with politics and economics which is my major.
Two Democratic Party candidates differ majorly in their opinion on Wall Street and economy reforms.
Wall Street physically locates in New York City, but its impact extends worldwide. Wall Street now refers to the large group of brokerage firms and investment banks, which dominate the U.S. financial market. It is home of New York Stock Exchange (NYSE): the world’s largest stock exchange, and Nasdaq OMX: the world’s second largest stock exchange with daily trading volumes exceed $5 trillion. Street firms together control trillions of dollars in financial assets. There is no doubt of Wall Street’s key role in the world economy.
Hillary Clinton believes in corporation as well as the influence of Wall Street. She emphasizes the importance of Wall Street and encourages a strong, fair and long-term growth of Wall Street. She says on her campaign website that “Wall Street should work for Main Street.” She encourages the financial sector to serve the interests of investors, shareholders and consumers, not just itself, as well as hold both individuals and corporations accountable. Hillary’s plan supports Wall Street investment as well as encourages transparency in its development through toughening regulations of risky derivatives and tackling dangerous risks in the financial system. Hillary sees a well-regulated Wall Street as an effective way to prevent the next financial crash.
Bernie Sanders expresses his interests in reforming the Wall Street: “It is time to break up the largest financial institutions in the country.” He believes that these financial institutions have acquired too much economic and political power, endangering economy and politics. He proposes to use fund raised by tax to subsidize for college education, cutting interest rates on student loans and increasing financial aid. Sanders introduced a bill last May that investors would be required to pay an excise tax on all transfers of stock, bond and other financial investment exchanges. For instance, stock exchange would incur a 0.5% tax rate. Although 0.5% seems to be quite small, but it all adds up, and can generates an enormous revenue for the government because of the size of U.S financial market. Statistically, more than $300 billion stock in shares is traded a day. Nevertheless, the bond market is even twice bigger than the stock market.
Hillary’s Wall Street reform could contribute a more transparent Wall Street and benefits the small investors and consumers. It could encourage a corporate America. However, this action would be an extremely long process, and the small shareholder may not be able to benefit soon. Moreover, some investor cast doubt on its feasibility.
Sanders’ reform benefits the large population of college student and ensure their ability to receive higher education. This action prepares the next American generation and benefits American education system in the long run. However, extra higher tax on the Wall street could discourage individual investors from trading as frequently which decreases its assets and revenue, which later on would result in a decline U.S GDP’s Financial sector.
Economic reforms affect the candidate campaign largely in the past and at the present. President Obama took donations from Wall Street, won the election and led the country out of the Great Recession. Hilary and Sanders’ standpoints on Wall Street and economy reform become more essential, because it could be the major break which leads to the outcome of the ultimate Democratic candidate.
