The presidential campaign in the US has encouraged the Democratic nominee, Mrs. Hillary Clinton, to superficially take on problems in the banking sector.   She is now talking about taking on Wells Fargo.

As we have previously reported, Wells Fargo encouraged employees to set up unauthorized bank accounts that their customers had not requested. Many underlings at the bank were dismissed over this action, which it is highly unlikely they undertook on their own.

Congress ordered its CEO to testify and we had a quasi-Japanese moment when he took the bullet.  He may have lost 60 million dollars, but millions of dollars  remain lining his pockets.

Since these kinds of actions, undertaken at a much higher level, and at the instigation of bank CEOs have gone on for decades and no other CEO, including Jamie Dimon of JP Morgan Chase, have gone unscathed, we wonder how seriously we can take the  curren flurry of sttention around banks and what any politician is willling to do to change the course of Big Banks in this country.

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In the current election cycle, Federal Reserve Chair Janet Yellen has been accused of inflating “a big, fat, ugly bubble” by keeping interest rates too low. Yellen couldn’t just shrug off the accusation, because only five days earlier three members of her own rate-setting group, the Federal Open Market Committee, had expressed the same idea in more delicate language. Loretta Mester, Esther George, and Eric Rosengren dissented from the FOMC decision to stand pat on rates, the committee announced, because they “preferred” to raise the federal funds rate a quarter percentage point at the meeting.

It isn’t easy running a central bank, especially during an election campaign, and even more so during this campaign, when there’s a deep division within the economics profession over whether U.S. interest rates are too low. As the uneven record of central banking goes to show, setting interest rates is a bewildering business. But exposing that bewilderment to the public makes the Fed seem ineffective, which renders it more vulnerable to attack.

The difficulty for Yellen is that although the Fed’s motivations aren’t political, its actions are inherently political in the sense that they affect the economy and thus create winners and losers. Keeping interest rates low helps incumbents by stimulating growth—but at the risk, some say, of generating unacceptably high inflation that would have to be quelled with high rates later.

Raising rates now presents its own difficulties. It could disrupt financial markets, shaking confidence. The next meeting of the FOMC concludes on Nov. 2. As of Sept. 28, financial markets saw only a 17 percent chance that the Fed would raise rates on that date, vs. a 53 percent chance of raising rates on Dec. 14. Why the low expectations for November? One reason is that there’s no press conference scheduled then, and Yellen uses press conferences to explain rate moves. But another reason is that markets don’t seem to think the Fed will call attention to itself by hiking rates six days before the election. Of course, not hiking could itself be read as a political decision.

The point is that anything the Fed does or doesn’t do is viewed through a political filter, even though Yellen said after the Sept. 21 FOMC meeting that “we do not discuss politics at our meetings, and we do not take politics into account in our decisions.”

Yellen is putting the best face on Fed dissent. She told reporters she thinks “it’s a very good thing that the FOMC is not a body that suffers from group-think.”

The deeper problem for the Fed is that its underregulation before the financial crisis and its overoptimism about the recovery have dulled its aura of expertise, says Robert Johnson, president of the Institute for New Economic Thinking.

Is retreating from the global economy the newer for US?

America’s economic woes are no secret. Nations like China are growing more and more economically powerful, while America is spiraling out of control. Losing an average of $600 billion dollars per year in trade deficits adds up, and the new low-wage economy neither brings in the needed tax dollars to run the country, nor gives citizens enough money to pay the bills. The more imports we buy, the more other nations prosper, and the more America falls deeper and deeper into third world status.

America’s Founding Fathers knew that foreign commerce was the key to a sustainable economy, but not by importing everything we need to live from producers overseas. A quick look at what they set up for a successful nation – and what we have given away – will show how Congress can easily fix the nation’s economic woes.

Retake control of the American economy  The U.S. Constitution states that “Congress shall have Power. . . To regulate Commerce with foreign Nations,” yet America has given up this right,

Restore tariffs and reform taxes  Every nation in the world has protective measures to ensure they take full advantage of product entering their countries. Again the US Constitution states: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises. . .”

By lowering income taxes and using a border-adjustable tax — the most successful tax in the world — American workers would not be punished for having jobs and foreign products entering the country could pay for the government through tariffs, as the Founding Fathers envisioned.

Stimulate the economy for job growth with the new influx of revenue  With 80% of stores like Walmart’s wares coming from China alone, the revenue earned through tariffs and a value-added tax would be enough to not only rebuild America’s crumbling infrastructure, but also rebuild manufacturing as well. The Constitution also grants Congress power to establish roads and “promote the Progress of Science.” This is money that could go towards the innovation America needs to bring back real jobs in manufacturing, R&D and more.

Are these answers? We do not know. Yet every politician in the US now has to address the issues they raise.

James Rufus Koren writes:   Outraged senators castigated Wells Fargo & Co. Chief Executive John Stumpf this week for not seeking to take back some of the $100 million awarded to a retiring executive who oversaw the division at the heart of the company’s fake-accounts scandal.

But whenever Stumpf, 63, eventually departs from his post atop the San Francisco banking giant, he could walk away with far more — nearly $195 million in cash, stock and other compensation, a review of the bank’s regulatory filings show.

While it’s almost certain Stumpf will keep the vast majority of that sum given the bank’s compensation policy, both he and Carrie Tolstedt, the retiring executive who headed the bank’s retail operations, could lose tens of millions of dollars over the still-unfolding scandal.

The bank has agreed to pay $185 million to federal regulators and the Los Angeles city attorney’s office over the creation of as many as 2 million fake accounts, a practice regulators say was encouraged by a demanding and poorly supervised sales culture. But trouble for the bank has continued to grow since the settlement was announced.

Federal prosecutors are investigating the bank to see whether criminal charges should be filed, while senators have called for the Labor Department to investigate possible labor law violations. And there’s a growing chorus of investors, corporate governance experts and others calling for Wells Fargo to cut or cancel executives’ pay over the scandal.

At a Senate Banking Committee hearing last week, Sen. Bob Corker (R-Tenn.) said that the bank would be committing “malpractice from the standpoint of just public relations” if it does not dock executives’ pay. Analysts who follow the bank expect that means both Stumpf and Tolstedt will lose some compensation.

We wonder whether this relatively tame assessment can really inhibit bad bank behavior.  Despite Elizabeth Warrne’s wanrings to the Democratic Presidential nominee.  Should she win in November, it is unlikely that she will go after bankers who have supported hr campaign and also helped she and her husband accumulate $250 million of their own money.

When the LIbor scandal broke in 2008, Ina Drew of the London office of JPMorgan Chase was called into the office of the bank’s CEO Jamie Dimon, according to reliable sources.   It is reliably reported that Dimon said he should take the fall, but could not.  She was going.  With 25 million dollars.

Now, as Wells Fargo faces fines for encouraging banking underlings to set up fake accounts for clients, another woman is taking the fall.  Fortune’s Stephen Gandel reported that Carrie Tolstedt, who led the community banking division where the fraudulent accounts were allegedly opened, was leaving the bank with 124.6 milliion dollars. While the bank called her departure a “personal decision to retire,” many have demanded a substantial “clawback” on Tolstedt’s back pay.

Two women walk with a lot of money, and without squealing.  Is this a woman’s job at the top of banking?

At this year’s analyst classes in the City of London last week, one thing stood out: the Italians. By our estimation around 14% of the analysts hired into investment banks this year come from Italy. One Goldman Sachs Managing Director, himself an Italian (admittedly), thinks he knows why.

He says Italians make good bankers for a variety of reasons but most of all because, they lack alternatives.  “The Italian economy has barely grown in the last 25 years,” he points out, speaking on condition of anonymity. “There’s no Italian tech industry and at the institutional level most finance activity happens out of London. At the same time, there are very few industrial opportunities, so top Italian talent gravitates to London.”

Together with the Indians and the Chinese, he argues that the Italians are the hardest working bankers in the City. Firstly, they’re motivated by the lack of alternatives (“People are very committed to perform once they get a job.”) Secondly, even moderate success in banking can deliver “transformational wealth” when it’s taken back home.

“Young Italians working in Italy are some of the worst paid in Europe,” he points out. “The average gross salary in Italy is €27.4k a year and when you graduate from university, your best bet as a starting salary in an Italian job is around €1.5k a month.”  By comparison, 25 year-olds in the City of London can expect to earn £100k (€119k) plus.

Motivation-by-fear isn’t the only thing driving young Italians to success in London though. The Goldman MD says it helps too that Italy’s government bond market is one of Europe’s largest: “Italians are usually very good in rates.” Italians are also naturally gregarious and commercial, which helps in sales. And then there’s Bocconi, which regularly ranks towards the top of the league tables for masters courses and universities that banks hire from.

Banks have been accused of doing a lot of nasty things, but what Wells Fargo was accused of Thursday is particularly offensive.

Federal regulators said Wells Fargo employees trying to hit sales targets and earn bonuses opened bank and credit card accounts in customers’ names without their consent, resulting in some customers being charged fees.

Employees opened more than 2 million accounts that may not have been authorized, according to the Consumer Financial Protection Bureau, which fined the bank $100 million, the largest penalty it ever has levied.

Wells Fargo also will pay a $35 million fine to the Office of the Comptroller of the Currency and $50 million to the city and county of Los Angeles, which sued the bank last year.

How does the wealth accumulation of Hillary Clinton (and her husband) and Donald Trump help us understand this election in the US?

Mr. Trump is a businessman.  It is unclear how much he is worth.  He can always argue that was wealth he accumulated as a businessman was done in a businesslike fashion.  He is a political outsider, and this is why he causes the entrenched system so many problems.

Mrs. Clinton and her husband have accumulated around $250,000,000 since Mr. Clinton left office.  No other post-president in the history of the United States has accumulated this amount of wealth.  This accumulation has occurred on the back of the Presidency.  This money is completely tied to politics.  For this reason reporter Glenn Greenwald writes that examining the source of the wealth and what is expected in return is relevant to Mrs. Clinton’s run for the office of President.

Two small samples f favors given out are relevant.  Goldman Sachs’ head Llloyd Blankenfein, created a hedge fund for Mrs. Clinton’s son-in-law and supplied him with clients.  The son-in-law bet foolishly on Greek debt and lost a great deal of money.  Goldman Sachs does not appear to care, because they have an inside track to the woman who would be America’s next President.

Trump gave $5000 to Mrs. Clinton when she was an aspiring Senator from New York.  When asked why, he said he wanted her to come with her husband to his wedding.  DId he get what he wanted?  Yes.  The Clintons came to the wedding.