Are the New Democrats Just a Wall Street Protection Racket?

by: Chris Bowers

Tue Mar 03, 2009 at 08:00

There seem to be only three instances where the New Democrats have made a public splash over the last six months: passing the $700 billion bailout, vowing to prevent too much regulation of the financial industry, and taking the industry's side in the current housing bankruptcy fight. The Wall Street connection between these three areas of policy is pretty obvious, and leads one to ask: do the New Democrats do anything, as a caucus, except funnel money to Wall Street and limit financial regulations? It is just a Wall Street protection racket?

More in the extended entry.

Chris Bowers :: Are the New Democrats Just a Wall Street Protection Racket?
Let's review the recent times when the New Democrats made their voices heard, as a caucus, on a legislative fight:

  1. Back in September and October of 2008, they took the lead in supporting giving $700 billion to banks. Beyond Blue Dogs, beyond Progressives, beyond Republicans, on both the first and second bailout vote, no group in Congress supported the bailout more than New Democrats. In addition to the votes they supplied on their own, New Democrat actively whipped for the bailout among other House members, thus allowing Wall Street lobbyists to credit the New Dems for the bailout's eventual passage:

    New Dems helped Democratic congressional leaders explain the legislation to resistant Democrats, and coalition leaders actively whipped votes for the measure. Financial lobbyists fighting for the legislation credit New Dems with helping TARP win congressional approval.

  2. Second, two weeks ago, New Democrats made their public re-emergence by claiming they will take the lead on re-writing financial regulations, seeking to avoid liberal over-reach:

    Pro-business House Democrats are seizing on the high-stakes issue of writing new financial rules as a way to gain clout - and a few headlines - in the larger, crowded Democratic Caucus.(...)

    The New Democrat Coalition, comprising 60-plus centrist Democrats, are planning a news conference early next week to unveil its principles for revamping financial market regulation, Politico has learned.(...)

    "Congress can be very well intentioned," she said, "but in its best intentions sometimes so overreacts or overcompensates that it can create other unintended consequences that are problematic and stifling to our economy."

    Because, you know, if there is one thing Congress has consistently done over the past thirty years, it is impose too strict regulations on the financial services industry.

  3. Next, last week New Democrats delayed House consideration of bankruptcy reform on mortgages:

    Then a surprising thing happened. Pelosi, who disagreed with this critique, huddled at the side of the room with her top deputies - and then buckled. She suspended consideration of the housing bill so more thought could be put into the bankruptcy item.

    This hardly amounts to a breakthrough win for party moderates - or a major concession by the speaker. But it was a consequential moment in the minds of moderate leaders who often find themselves marginalized in a caucus dominated by liberals.

    "It shows we have bench strength, and it shows we can flex," said California Rep. Ellen O. Tauscher, who chairs the New Democrat Coalition and played a central role in negotiations over the bankruptcy bill.

So, New Democrats seem to have made three major public appearances over the last six months: first, when they funneled $700 billion to banks, second when they vowed to prevent too much regulation of the financial industry, and third when they delayed a House vote on bankruptcy reform. Given this, I have to ask, are the New Democrats really anything except a congressional guarantee for Wall Street? Do they do anything as a caucus except protect, and funnel money toward, the financial services industry? These are the only three legislative areas where the caucus seemed to be making any waves at all.

Seriously, the New Democrats seem to be perfectly ordinary Democrats, but with one gaping difference: they consistently work to funnel money to, and prevent regulation of, Wall Street on all major legislation. Their website doesn't list any caucus accomplishments since April of 2008. The Politco puff piece on their new executive director doesn't list any policy accomplishments for the New Democrats except the Wall Street bailout. And speaking of their new executive director, he previously worked as a lobbyist for the financial services industry, trying to enable banks to get around predatory lending laws and make even more bad loans. He works out of New Democratic chair Ellen Taushcer's office, whose background includes work as an investment banker for Bear Stearns and served on multiple stock exchanges.

Is there any legislation the New Democrats work on, as a caucus, except limiting financial regulations and funneling more bailout money to zombie banks? Anything at all? And I'm not talking about individual members of the caucus, but rather when the caucus as a whole threw its weight around. Can anyone find any other recent accomplishments for New Democrats, as a caucus, outside of protecting, and funding, Wall Street? Is that their only purpose for existing?

Anyone? Anyone? Bueller?

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Who runs the Country? (4.00 / 1)
Actions are a direct manifestation of intention. Don't ask them what they intend. Watch what they do, whether we talk about Congress or President Obama. Let's assume he does in fact lead or has meaningful influence on the Congress, where is he going?

As TARP ended up modified in ARRA, we know who runs the country.

When Jason Furman was first appointed as economic advisor during the campaign, I wanted to understand Obama's direction on economics by the people he appointed. I saw 2 items which clearly showed Furman's position: One, a five or six page essay praising Wall-mart for its contribution to the nation with economic innovations, and as a result serving the nation.  The second was his fellowship in the Brookings Institution.

I wrote to Senator Obama's office objecting to the choice of economic advisor detailing a bit of his writing in the Wall-Mart essay. Not too long after I saw in the news that Furman was not being permanently appointed to anything more than to help gather the economic team.

A few weeks later, as he was softening his progressive position toward the right, I again wrote, and pointed out statements he had made that indicated he was moving away from the initial progressive position he had taken that had won him the Democratic nomination. A few days later he made a public statement where he said he was being accused of moving rightwards, and in the same speech he declared himself to be progressive.

Unfortunately, we well know the banking community's contributions to his campaign, so he owes them, and he's not going to undertake any serious economic shifts, despite that talk.

It is again clearly demonstrated in the ARRA, particularly in Title VII, on Executive Compensation, which is full of exemptions and loopholes that it is doubtful whether in fact anyone bonuses will suffer in the least. And this was a last minute negotiation which never surfaced to the public's view, until it was a done deal.

One of President's Obama point of appeal was his "bottom up" government, where people would be heard, and their concerns taken into account in legislation. The appearance of change was maintained in the transition web site "" where many discussions were launched on health care, and on Community Service, a "Seat at the Table," and Questions from the Public to the President Elect. It was clear from the feedback that the President hadn't even been presented any of these comments, which were answered by staff with campaign statements, and no real connection from the President to the public. Eventually the discussions died a slow death with only a handful of people chatting to each other.

Now has no discussions on anything. Just PR to show how good the President is, and how he is fulfilling his promises. No directory of offices or staff to whom public can direct their concerns is available anywhere in the site. When was at the forefront, there was a section on the left side entitled "Directory," but it was connected to nothing that gave anybody's contact information. The Office of Public Liaison has had a section in the One can leave a message to the Office, but they don't even have an auto-responder to answer.  

Intentions are directly reflected in actions taken. Let us the kinder amongst us not to ignore that one basic rule to understand what and where our leaders want to do and go. And act accordingly.

This maybe as good a time as any to build progressive action (of course, starting with a clear definition of progressive, and a list of what they are for, and/or against!), progressive coalitions, get priority lists, and get actions moving to help our Leaders read us more clearly and realize that America's center is progressive, in favor of fair laws, inclusion, and above all, aren't we the people indeed the government?

A National Progressive Alliance, is the only viable solution.

I think you're unfairly laying this on Obama (4.00 / 1)
He has been pushing hard for the bankruptcy reform bill in the house. He's had his HUD secretary talking to congress and he's pressing for it. There are areas where Obama has been tepid, like the bailouts and hesitancy to nationalize, which stems from Geithner imo. However, when it comes to bankruptcy reform, its something he campaigned on and it's something that he's trying to make happen. You also suggest that Obama is beholden to Wall St. types, which I don't really agree with. His budget attacks them as much as it attacks other big industries, with his taxing of hedge fund managers and so forth.  

[ Parent ]
On point response, please (0.00 / 0)
baldhawk says, to summarize, that Obama once in office abandoned the (some would say putatively) bottom up organizations that he built in the campaign.

ai002h respsonds that Obama is working hard on the bankruptcy bill.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

[ Parent ]
Not really.. (4.00 / 1)
Obama has slapped his stamp of approval on all those responsible for the breakdown of both the country s' financial structure  - and the Democratic party itself.

Any active Democrat working to elect more Progressives to both houses of Congress could easily see who Emanuel and McAuflife were targeting thorough their control of the DCCC and the DSCC- pro-business white folke.
He hires Emanuel.

Those same pro-business white folke were also the worst of the hard-line pro-war gang helping Bush with every bleepin' thing he asked for
He empowered Lieberman and Clinton and re-hired, backed and/or supported every one of those east coast, Wall street/J street who wrote all the bad policies.

And more bizarrely, Reid and Hoyer think their leadership of Congress is what gave Obama his win - not Dean.
Sure enough, new Congress and they pushed more of the same shit into the stimulus, causing the Right to run screaming.

Obama and his family are about the only things 'new' in Washington.

So watch out for 2010 - now that's he's removed two key Democratic governors from red states for low-key government jobs, and with Gov. Howard Dean being so shunned, Obama and the Democrats are bound to pay a strong price for their  continuing capitulation to the Right.

Nationalism is not the same thing as terrorism, and an adversary is not the same thing as an enemy.

[ Parent ]
Yep... the buck is definitely gonna stop with him... (0.00 / 0)
But, just look how many Clintonites we have in the OBAMA White House... After 8 years of neocon rule -- Obama couldn't find some talent out there that knew how government worked, had the cred but didn't have to have worked for Clinton on their resume?

Looks to me that Obama has been crowded out by the Clinton team.  I keep thinking back to this being the reason Gore  didn't want to get back in -- i.e. he knew what we are seeing...

It really galls me that Dean was treated so badly -- I  mean what did Dean ever do to Obama?  But I remember he was basically dog meat to the Democratic establishment elite.  Those same democratic establishment elite that definitely got their way by getting their neocon in as SoS.

[ Parent ]
Agreed. (4.00 / 2)
Well, with the caveat that I think there are other rackets which lure them.

No man can serve two masters (4.00 / 7)
I'll be glad when the term "class war" is no longer pejorative, but a badge of honor.

Yes, we are in a class war for the future of this society, and, in a larger sense, the entire developed world. It is a simple thing, really. Either all of us are created equal and have a right to life, liberty and the pursuit of happiness, or we are not created equal and have only those rights that we acquire through circumstances of birth combined with our ability to take what we want from the world in whatever manner we can.

In these last few decades we have seen one of the largest transfers of wealth from the many to the few in the history of this country. And much of that transfer had little or nothing to do with wealth creation. It was all a series of Ponzi Schemes (otherwise known in polite society as shadow banking).

Wall Street is operating under the good ol' boy motto: "It's much better to shear 'em than to skin 'em 'cause you can only skin 'em once, but you can always come back and shear 'em again."

The New Democrats know who their masters are and so far they have served them well. Their goal in all of this is to preserve the structure and regulations that will allow Wall Street to shear the American public of its wealth (i.e., those real assets that always underlie derived assets aka derivatives) again and again.

They know it's a class war and they are determined to be on the winning side.

Yes, although (4.00 / 2)
not just the New Democrats.  

If you have to ask (0.00 / 0)
you already know the answer.

Simple answers to simple questions (0.00 / 0)

The only question is how far the rot goes beyond the New Democrats. For that, you only have to look at how health care policy is being managed.

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  

Short answer: yes (0.00 / 0)
"New" Democrats are barely distinguishable from Old Republicans.

So what do we do about it? (0.00 / 0)
If the current "class war" manages to change electoral perception enough for average people (read: not political junkies) to start voting Democrat as a reflex, does that mean the New Democrats will have cover in the coming election cycles? Is there a risk of confusing a sympathetic portion of our electorate by discrediting the NDems? Just wondering if there's something consequential that can be done to challenge/counter them.

"This ain't for the underground. This here is for the sun." -Saul Williams


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