Clinton gives nod to progressives with transition team Presented by U.S. Bank

CLINTON GIVES NOD TO PROGRESSIVES WITH TRANSITION TEAM — Progressive Democrats who have been pressuring Hillary Clinton to appoint personnel eager to crack down on Wall Street see a few bright spots in the transition team the Democratic presidential nominee is rolling out — but also some points of concern.

To be sure, the transition chair, former Interior Secretary Ken Salazar, and co-chairs, including Neera Tanden, president of the Center for American Progress, and Tom Donilon, former White House national security adviser, are well known Clinton allies and established Washington players. As one longtime Clinton watcher put it to MM: a "predictable, very safe list" that "suggests she's totally out of step with the times, the moment and the politics."


More on Salazar in a moment. But a number of progressives tracking the transition say the team could have been worse — meaning too business-friendly and aligned with the party's economic centrists — and they applauded Clinton naming Heather Boushey as the group's chief economist. Boushey’s work at the Washington Center for Equitable Growth, where she is executive director, has focused on economic inequality. (Her organization is an outgrowth of the Center for American Progress, which was founded by John Podesta, chairman of Clinton’s campaign.)

"While the rest of the names on the list are both expected and important, the inclusion of Heather Boushey is an extremely encouraging (and somewhat unexpected) sign for those who worry about whether our economy works for everyone," said Ty Gellasch, a Democratic policy consultant and former aide to retired Sen. Carl Levin. "In her first big economic hire, Secretary Clinton is turning to an economic policy guru with a strong bent towards economic fairness, and not someone with deep Wall Street ties."

SALAZAR RAISES RED FLAGS ON TRADE — POLITICO's Megan Cassella reports that progressives are unhappy that Salazar, a former Colorado senator, is leading the transition team in light of his support for the TPP and fracking. Clinton opposes the Asia-Pacific trade deal. http://politi.co/2aXpOGG.

David Sirota, of the International Business Times, points out that Salazar became a partner at influential law and lobbying firm WilmerHale after he left government, and is now playing a key role for Clinton as she criticizes the "revolving door" between the public and private sectors. http://bit.ly/2bvZMMx.

NOW WHAT? — The next turn of the screw for progressives will be whether Clinton's team follows through by tapping Wall Street reformers for key jobs — a major priority for Sen. Elizabeth Warren, who has pushed the mantra that "personnel is policy."

"There's work to do," said Lisa Gilbert, director of Public Citizen's Congress Watch. "We and many others in the community will work to make sure we have the best possible nominees and folks not in any way connected to Wall Street."

GOOD WEDNESDAY MORNING! — Who said August would be quiet? Ben’s off this week and next, and I'll be back as your guest host tomorrow. Please send tips to Financial Services editor Mark McQuillan: [email protected]. Follow me on Twitter @zachary.

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES – Victoria Guida on lawmakers fighting a big-bank surcharge -- and to get Morning Money every day before 6 a.m. -- please contact Pro Services at (703) 341-4600 or [email protected].

DRIVING THE DAY — The Federal Reserve releases July's Federal Open Market Committee meeting minutes at 2 p.m. ... SEC commissioners will hear oral arguments at an enforcement hearing at 2 p.m.

REGULATORS PREP SAFEGUARDS FOR CLEARINGHOUSE DOOMSDAY — An important development, from Bloomberg's Silla Brush: "Global regulators proposed tougher standards for clearinghouses at the heart of the $493 trillion derivatives market, taking some of the biggest steps yet to prevent the platforms from becoming too big to fail. The Financial Stability Board and other securities regulators published guidelines on Tuesday for clearinghouses to bolster their assessments of risks and improve plans for how they’d recover after the default of major bank members. The recommendations came after regulators found some clearinghouses negligent in complying with existing standards." http://bloom.bg/2aYHBxz.

ICYMI: SCHILLING MULLING BID TO UNSEAT WARREN — Bankers, don't hold your breath, but former Boston Red Sox pitcher Curt Schilling might run against Elizabeth Warren in her 2018 Senate race in Massachusetts. The Boston Globe reports that the World Series winner is calling Warren a "nightmare" and saying he wants to get her out of politics. Schilling seems undeterred by his personal baggage, which includes being fired from ESPN after posting offensive comments on social media and founding a state-financed video game company that later went bankrupt. More from The Globe: http://bit.ly/2bEeqFw.

SEC SLOW TO STOP SHADY STOCK — WSJ's Dave Michaels on the limits of regulatory oversight in the penny-stock market: "U.S. securities regulators raised numerous red flags about a thinly traded company based near Tijuana, Mexico, for more than two years before suspending trading this week as the firm’s value soared to exceed $35 billion. The Securities and Exchange Commission, in eight letters sent to Neuromama Ltd. in 2014, questioned what the regulator called the company’s 'vague' claims that it had developed a platform 'containing all of the popular components used by a majority of the population on the internet.' ... The SEC suspended trading in its shares Monday, citing concern that false information, including a claim that the company would be listed on the Nasdaq Stock Market, was behind the quadrupling of its stock price over the past four months." http://on.wsj.com/2aZSGRH.

ICAHN COMING AROUND ON AIG BOSS — Bloomberg's Sonali Basak: "Carl Icahn, who won representation to the board of American International Group Inc. after threatening a proxy battle, said he’s warming to the approach of the insurer’s chief executive officer. ... Icahn applauded AIG’s agreement on Monday to sell its mortgage guarantor for $3.4 billion. ... AIG rejected Icahn’s initial idea in October to split AIG into separate companies concentrating on property-casualty, life and mortgage operations. ... [AIG CEO Peter] Hancock said last week that escaping the government’s designation as a systemically important financial institution isn’t among its top priorities, and that trying to do so could be distracting to management. Icahn previously said fighting the SIFI-label should be a key objective." http://bloom.bg/2aYowkE.

FED RATE HIKE ON THE TABLE? — Jonathan Spicer and Howard Schneider for Reuters: "The Federal Reserve is raising expectations for an interest rate rise this year, even as early as next month, after two policymakers on Tuesday said the economic stars now appear to be aligning despite weak U.S. economic growth in the first half of 2016. New York Fed President William Dudley said 'it's possible' to raise rates at the Sept. 20-21 policy meeting given evidence of wage gains and a tighter labor market that could boost inflation; while Dennis Lockhart of the Atlanta Fed said a hike next month is in play. The comments, which prompted investors to boost bets on a rate hike, came nine days before the annual meeting of some of the world's top central bankers in Jackson Hole, Wyoming, a venue the Fed often uses to telegraph policy plans." http://reut.rs/2b2q1u3.

MARKETS SAY MAYBE NOT — WSJ's Chelsey Dulaney and David Harrison: "The dollar dropped on Tuesday to its lowest level since late June against a basket of currencies, even after two Fed officials signaled that the central bank still is leaning toward an interest-rate increase before the end of the year. The dollar tends to rise against foreign currencies when investors anticipate a U.S. rate increase, reflecting the expectation that bond yields and investment returns will rise. ... The decline in the dollar sends a powerful signal that investors believe soft economic growth around the world will limit the Fed’s capacity to tighten policy as promised." http://on.wsj.com/2aYFIq7.

COHEN, REGULATORS REACH ANOTHER SETTLEMENT — Bloomberg's Matt Robinson and Simone Foxman on the latest legal developments pertaining to the founder of SAC Capital and Point72: "Steven A. Cohen will be barred from trading that falls under U.S. Commodity Futures Trading Commission jurisdiction until 2018 after reaching an agreement tied to his Securities and Exchange Commission ban for failing to supervise Matthew Martoma, who was convicted of insider trading. ... Cohen struck a deal with the SEC in January that would allow him to return to managing money as early as January 2018. The arrangement was seen as a victory for Cohen after regulators had pushed for harsher punishment. SAC Capital pleaded guilty in 2013 to securities fraud and agreed to pay a record $1.8 billion fine in a separate settlement with federal authorities." http://bloom.bg/2b2yGN3.

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