In an interview with FOX Business Network’s Stuart Varney, Former FDIC Chair Sheila Bair weighed in on Hillary Clinton’s corporate tax plan.
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“I object to this, what she is calling quarterly capitalism. I think our markets are far too focused on quarterly returns, not long-term growth – that’s a symptom of investor behavior. I’d like to see change, but maybe they need to figure that out by themselves. I don’t think tax policy really drives it… I think this just adds a lot more complexity to a tax code that is already highly complex and I don’t think it’s really going to attack the behavior she wants to change. It’s not the right tool,” she said.
Bair said Hillary Clinton is not anti-Wall Street.
“I think what she is suggesting is very incremental. She wants to get rid of carried interest -- well who doesn’t? Nobody tries to defend carried interest. So, I think actually her proposals have been quite modest and incremental. So I think to tag those as anti-Wall Street is not accurate,” she said.
On the other hand, Bair thinks raising capital requirements for big banks would be a dramatic policy shift.
“I think if you significantly raise the capital requirements the market will force that break up [of the big banks]. You are going to make them internalize the external risks that they imposed on the rest of us. And so it will be very, very difficult to make your return on capital with say a ten percent capital requirement on what’s called a non-risk way to basis, which is about double what the requirement is now,” she said.