Krugman sides with Hillary on financial reform, noting:
Mr. Sanders has been focused on restoring Glass-Steagall, the rule that separated deposit-taking banks from riskier wheeling and dealing. And repealing Glass-Steagall was indeed a mistake. But it’s not what caused the financial crisis, which arose instead from "shadow banks" like Lehman Brothers.
I am reminded of a piece written three years ago by Krugman's WaPo counterpart, Steven Pearlstein. Its essence:
Repeal of Glass-Steagall has become for the Democratic left what Fannie Mae and Freddie Mac are for the Republican right — a simple and facially plausible conspiracy theory about the crisis that reinforces what they already believed about financial markets and economic policy.
But why let facts get in the way...?
Facts such as that Bear Stearns, Lehman Brothers and Merrill Lynch — three institutions at the heart of the crisis — were pure investment banks that had never crossed the old line into commercial banking. The same goes for Goldman Sachs, another favorite villain of the left.
Pearlstein has much more. His piece is cogent, challenging, and all of it worth a read.