elizabeth warren

More Warren, Less Bowles

by: Mike Lux

Thu Nov 11, 2010 at 09:00

The Democratic Party internal debate about what to do in order to come back in 2012 rages on and will for a while. The issues and strategic implications are complicated. There are a lot of big and small tactical considerations. The potential paths that could be followed go a lot of different directions. But here's one thing I feel extremely confident in saying: the path for Obama's political comeback does not lie in walking over the backs of senior citizens and the working class.

Voters over 65 years old were the one age group that went clearly against Obama in the 2008 victory, but it got a lot worse in 2010: the margin against Democrats ballooned to 22 points in this election, after being  -8 in 2008. And working class voters in their 40s, 50s, and 60s- the folks getting ready to go on Social Security and Medicare- turned strongly against the Democrats as well. The economy was a big part of that, of course, but so was a few hundred million dollars worth of false ads about Democrats cutting Medicare.

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The election war and the internal war

by: Mike Lux

Fri Oct 29, 2010 at 12:00

All hands are on deck in the progressive community working to surprise the pundits and stave off too many Republican victories on election day. And all the last minute work really does matter, as I will document in my next post about the closeness of margins in swing Congressional races even in years where one party or the other is making big gains. We all need to keep focused and keep our nose to the grindstone, because this election's fate is not yet decided. The President is out on the campaign trail working his butt off; the Democratic leadership in Congress is raising money and helping out in every way they can; the staffers for the Democratic National Committee, Organizing for America, and other party committees are out in the field working their hearts out in races all over the country. They are joined by activists from the netroots and every kind of progressive organization knocking on doors, making calls, coming to rallies, and doing everything in their power to turn the tide. It makes me proud that so many people are working so hard even when- in fact, especially when- the going has gotten so tough.

However, I just need to stop for a moment and quickly note, because it will become hugely more important in the weeks and months following the election, that not everyone who in the administration is on the same team. All the passion so many people are showing makes it all the more galling to have certain as yet to be found out people in the Treasury Department, people who owe their jobs to all of you who worked so hard to get President Obama elected in 2008, stabbing us all in the back in the very last days of this campaign. Check out Zach Carter's superb post this morning on the snakes in the Treasury Department who are working to undermine the President, his new appointee Elizabeth Warren, and all of us in the progressive world who are so excited about the potential of the Consumer Financial Protection Bureau right before the election. Their petty leaks and nasty attacks are the worst kind of Washington BS. They made a rotten attack on Raj Date , who is a brilliant, progressive, and committed man who was a leader in making the financial reform bill stronger. As to the office paint job leak, it is just laughable: I was over at Elizabeth's very plain office in the standard government building where she is spending 95% of her time, and she hasn't even taken the time to put a picture on the wall. She is a frugal, modest Oklahoman who is so driven by the work that she probably wouldn't even notice if someone repainted her office. And the media hound charge is just funny: senior White House officials told me weeks ago that they wanted Elizabeth to be as visible as possible in the final days before the election because she is a strong voice for the middle class. Literally all the media bookings for her have come at the request of the White House communications shop.

I have always told people that working in the Clinton White House, I met some of the best people I have ever known and some of the worst. There are people who are in government for all the right reasons, because they want to make the country a better place and really help improve the lives of regular people. Elizabeth Warren is one of the very best of that group. And there are people who are in government because they are looking to brownnose the industries they are supposed to be regulating so they can get a really high paying lobbyist job after a few years in government. It is very clear that some of the people in Treasury, certainly the people doing these absurd attacks, are in the latter category. They don't care about screwing over the President and the Democratic Party in the days before the election, and they certainly don't care about helping consumers. What they care about is sucking up to the Wall Street bankers who they hope will give them a sweet job sometime soon.

I have a message for the leakers at Treasury, though: you are playing with fire. The two people closest to the President at the White House, Pete Rouse and Valerie Jarrett, are huge fans of Warren, and I know these leaks have caught their attention. I would love to see a serious investigation into these leaks once the election is over, and it just might happen. And whatever happens on the inside, the entire progressive community- bloggers, members of Congress, labor and consumer organizations- have Elizabeth Warren's back. Right now, unlike you leakers, we are focused on winning elections, but after the election, we will be gunning for you.

Discuss :: (12 Comments)

Robbing you with a fountain pen

by: Mike Lux

Wed Oct 27, 2010 at 15:00

Yesterday I wrote a post on the steadily increasing physical and rhetorical violence happening on the right wing of the political spectrum. It is a sad and scary story, one that conservatives try to brush away by saying both sides are responsible when almost none of it is coming from the progressive side of the aisle. The ironic thing is that I underestimated the depth of violence and threats, as I have had many examples sent to me since I wrote the piece that I had forgotten or didn't know about it, plus it has since come out that the person who stomped on the MoveOn activist's head in Kentucky turns out to be closely affiliated with the Rand Paul campaign.

Today, though, I want to write about another form of thuggery, because I think this story is the biggest reason people should vote and vote Democratic. More about that in a moment. First, I think it's appropriate to quote Woody Guthrie's classic line:

Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.

I think the lawlessness reflected in the physical violence on the campaign trail coming from so many on the right, and the blatant disregard for the rule of law by the big banks trying to railroad so many people out of their homes without the proper paper work, are more related than conventional wisdom would suggest. The fact that banks and their "servicers" have apparently committed massive document fraud and have in some cases actually hired thugs to break into people's homes and change their locks during foreclosure proceedings, and the fact that they lied to and bet against their own clients in investment deals is all part of a pattern: people with too much power and an Ayn Randian view of the world. Ayn Rand, the Social Darwinists of the 1880s, the big Wall Street banks, libertarian candidates like Rand Paul and these thugs who work on their campaigns all make the same arguments: power is morality, greed is good, compassion is weakness, buyer beware. While they call for civility, and argue against class warfare and populism, they believe in turning the Golden Rule of the bible on its head and replacing it with another one: he who has the gold, rules. And if the rule of law gets in their way, they just ignore it or use their political power to change the law. If politicians or public opinion create a problem for them, they use their money to dump millions into lobbying to change the law, or dump millions into secretive groups to buy elections.

Violence is just another means to a political end, and so is the lawlessness of falsified affidavits and paperwork to push massive numbers of people from their homes. Here's where my argument about politics comes in, and I know there are some of you who may find it ironic given that the administration (especially some of the folks at Treasury) has been closer to the big banks at times than it should have been. Here's the deal, though: the financial reform bill in the end got stronger as it went through the process rather than weaker only because the Democrats controlled Congress. Alan Grayson and Maria Cantwell and Sherrod Brown and Ted Kaufman were able to get concessions they would have never gotten had they been in the minority. Elizabeth Warren was able to out-negotiate Chris Dodd on the consumer protection agency only because the Democrats were in control- Richard Shelby only would have shut her down.

And speaking of Elizabeth Warren, who according to sources at the White House has done a superb job of quietly putting together the building blocks of that new agency, the Republicans will do everything in their power to make her job tougher if they take control of Congress. They will try to harass her and intimidate her every way they can. Fortunately, no one can intimidate Elizabeth Warren, and she will destroy them in the media when they try to take her on, but her work standing up for homeowners and consumers will be far easier if Wall Street's best friends don't run Congress. The hit jobs on her will keep coming (did you see this ridiculous piece on her aide Raj Date, who folks on Capitol Hill told me was one of the strongest advocates during the financial reform fight for a progressive financial reform bill), but her job is made easier if the Democrats stay in control.

The best argument for the Democrats in these elections is that the sharks are in the water, and the thugs are in the street. Democrats can and do drive us crazy sometimes, but when the Ayn Rand Social Darwinists on Wall Street and the streets of Kentucky argue that the strong should rule over the weak, it is better to strengthen the hand of our advocates like Warren and Grayson and Sherrod (rather than Scott) Brown. There are some who rob you with a gun, and some with a fountain pen- some who kick you in the head and some who throw you out of your home- and it is better to have a sheriff who will be on your side at least some of the time.  

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Where is the Middle?

by: Mike Lux

Tue Oct 05, 2010 at 10:30

I have had my share of disagreements on political analysis with Third Way over the past few months, but they have come out with a new memo on the 2010 races that is hard to argue with. Its message is that moderates and swing voters still matter in winning elections, and that we can't do well in the competitive 2010 elections without both appealing to the base and to those swing voters.

Like I said, tough to disagree with that. I do have some friends in progressive politics who believe that most elections can be won by focusing totally on registering and turning out Democratic base voters, but no matter how much money, effort, and message you focus on that goal, it is not enough to win most elections. The best example I know of is 2004, where the combination of America Coming Together, unions, ACORN, Project Vote, America Votes, many other non-profit groups, plus all the Democratic party campaigns and committees spent literally several hundred million dollars on black, Hispanic, youth, unmarried women, and other base Democratic groups' turnout. It was several times more than had ever been spent before on such efforts, turnout was very high with those demographic groups, and we still didn't win. We still needed a higher percentage of swing voters, we didn't get it, and we lost. Getting the base vote to turn out in higher numbers is just as important, but you have to win a solid percentage of the voters in the middle to win close races.

The key question the memo raises but then leaves unaddressed is how Democrats in a tough cycle can win over those folks in the middle. It is not an easy task, not with voters this cynical and disillusioned, not with the economy hurting this badly. And unfortunately, what passes for appealing to the middle in Washington, DC has no resemblance to what actually appeals to swing voters out there in the real world beyond the beltway. In Washington, being a moderate means being for raising the retirement age and cutting benefits for Social Security. In the rest of America, fighting to preserve Social Security is a huge plus for voters. In Washington, being a moderate means being for "free trade" deals. In the rest of America, working class swing voters hate the trade deals that they know are shipping their jobs overseas. In Washington, being a moderate means being for extending all of the Bush tax cuts even those for millionaires. In the rest of America, it is those working class swing voters who don't like those kinds of tax cuts.

Most of all, being a moderate in Washington means getting along nicely with all those corporate lobbyists who keep coming to see you (and dropping off checks). In the rest of America, swing voters and base voters are completely united that Washington is too controlled by wealthy and powerful special interests, and that their power needs to be rolled back. The polling numbers on strict new lobby reforms, on rolling back the Citizens United decision, on public financing so that candidates aren't dependent on special interests for campaign cash are incredibly strong. Voters are disgusted by the kind of business as usual described in this article from Roll Call. If Democratic candidates spent their time attacking that kind of special interest funding and the attack ads being generated by corporate cash, they would have swing as well as Democratic base vote standing up and cheering.

The brain-dead DC establishment still doesn't get this, of course. My favorite recent example was the hand-wringing by the "moderates" in DC over the appointment of Elizabeth Warren. Somehow the logic went that because progressives liked her, appointing her would be a political disaster with the middle. Dana Milbank, in one of his classic diatribes no doubt fed to him by a White House insider fearful of losing his influence, did a long piece full of nasty innuendo from unnamed sources about how Valerie Jarrett was leading the President to disaster, and his leading example was that Jarrett was one of the people in favor of the "politically radioactive" Warren getting her job. Having seen focus groups where working-class swing voters react to clips of Elizabeth talking about the financial industry, with them applauding and talking about how they would support her for President if she ran, I can assure Dana: you can stop worrying about Elizabeth's political radioactivity. Swing voters love her for the same reason progressives do: because she pulls no punches and takes on the powers that be. The only folks that she is radioactive with are the Wall Street execs and their friends in Congress.

Democrats need moderate swing voters to win elections: there is no doubt about that. The question is how best we get them. Some Democrats' theory is that they get them by distancing themselves from Obama and Pelosi, and perhaps a few Democrats from very conservative districts will survive by doing that. But what is clear to me from the polling and focus groups I am looking at is that instead democratic candidates should take on the causes that unite and motivate both Democratic base voters and swing voters: rolling back the power of corporate special interests, standing up to the big banks and energy and insurance industries, fighting the outsourcing of jobs. The path toward a winning electoral coalition in most swing districts and states is to reject Washington centrism and embrace the values of working families in the real America.  

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Weekly Audit: Can Elizabeth Warren Save the Economy?

by: The Media Consortium

Tue Sep 21, 2010 at 11:41

by Zach Carter, Media Consortium blogger

President Barack Obama's decision to appoint Elizabeth Warren to set up the new Consumer Financial Protection Bureau (CFPB) couldn't have come at a more critical time.

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A home run for our side

by: Mike Lux

Thu Sep 16, 2010 at 10:31

I have beaten up on the Obama White House enough that I'm no longer very welcome by many of the top staffers there, and on no issue have I been tougher on them than on their policies regarding dealing with the biggest banks and the TARP program. This morning, though, I am all smiles, delighted to my core, because the reports, confirmed multiple times, about the appointment of Elizabeth Warren are a big home run.

I am more than a little biased, because Elizabeth has become a good friend over the past few years, and because I have rarely seen the kinds of guts and tough bargaining strategy that I watched her show during the financial reform fight and the TARP oversight work. She publicly and repeatedly faced down Tim Geithner on a series of major issues around TARP and the overall handling of the financial crisis. She privately went nose to nose with Barney Frank and Chris Dodd and Treasury during negotiations over the financial reform bill. She had to time and again back Dodd down when he was getting ready to make bad compromises on the consumer agency. (Why do you think Dodd has fought so hard to keep Warren from being nominated?) She is the real deal, a fighter for middle class and poor families through and through.

Now, some progressives are arguing this joint appointment to the White House and Treasury is somehow a weak attempt to fool us, that Warren is being given the job as window dressing but will have no real power. The people arguing that just don't know Elizabeth very well, or understand what motivates her. I do not believe for a minute that she would meekly accept a powerless window dressing job, or would put up with it very long if that is what it turned into. She has never been interested in being in government for the sake of a title, and she isn't going to start now. The impressive thing is that I think Obama understands that, too, and gave her the job anyway.

For Elizabeth, the options here were the choice of basically being put on ice for several months at least during an extended confirmation battle, a time where she couldn't speak out or do any actual work on the agency while Geithner was free to start building it any way he wanted; being at Treasury reporting solely to Geithner, who I believe would do everything he could to undermine and disempower her; or this intriguing combination of working with Treasury to craft the agency while also reporting directly to the President. I don't know exactly how this deal went down, but it looks to me like Elizabeth helped craft something that might actually work in her mission to help consumers in dealing with the big banks. She always has the option of walking away if it doesn't- and knowing her, she would have the guts to do just that.

I think this is one time when we can give Obama credit for doing the right thing. Wall Street was determined in its opposition, and establishment insiders like Dodd did everything they could to derail Elizabeth from having any role in creating this agency. But the progressive movement fought like crazy to make this happen, Elizabeth showed her usual savvy and toughness once again, and the President did the right thing.

And here's the deal: this really does matter. I am constantly frustrated by the brain dead politics and corporate oriented policies of many of the people in the Democratic party, but there remain two reasons I still work hard to get Democrats elected. The first is that the Republicans scare the hell out of me with their extremism, but the second is that at least some of the time, Democrats who really care about working people and the poor do get placed in positions of power. Cecilia Munoz being the one to negotiate with Governors over how poor people are treated under government programs in the states matters. Melody Barnes playing a role in the crafting of domestic programs in the federal budget matters. Hilda Solis being in charge of running OSHA matters in terms of workers safety. And Elizabeth Warren being given the job of building an agency to make sure consumers are treated fairly by the big banks who dominate our country's economy is a very big deal.

This is a great day for America's working families, and we should celebrate.  

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Got A New Sheriff, Elizabeth Warren

by: Betsy L. Angert

Sun Aug 22, 2010 at 19:30

( - promoted by Paul Rosenberg)

Elizabeth Warren Rap Video- Got A New Sheriff

copyright © 2010 Betsy L. Angert.  BeThink.org

There is so much flak for what seems would be a fine Presidential appointment.  The nation's Chief Executive, Barack Obama, is often characterized as Spock, a Vulcan who is almost virtually void of emotion.  It is said that our current President is practical.  He acts on logic.  Yet, this supposed intellectual individual has, at times, seemed ready to do other than what most think reasonable.  Mister Obama has not appointed the truly best Sheriff for towns throughout the country, Elizabeth Warren..

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What is going on with Chris Dodd?

by: Mike Lux

Wed Aug 18, 2010 at 18:15

I don't know Chris Dodd well, but have always liked him quite a bit. I appreciated his advocacy on behalf of children, on civil rights and civil liberties, and on many other important issues. I thought he was a great DNC chair back in the '96 cycle. I knew that his closest friends on the Hill were Ted Kennedy and Rosa DeLauro, who have always been two of my favorite people. I thought he ran an honorable and strongly progressive campaign for President in 2008.

But lately, it seems like Chris Dodd has been taken over by a Wall Street pod person. He repeatedly tried to make major compromises to please the big banks in the financial reform bill, saying that the bill could not pass without these changes when in fact the bill got steadily stronger on the floor of the Senate, and the Republicans were always too scared to filibuster it. He has come out strongly against filibuster reform. And now he is mounting a major campaign to defeat Elizabeth Warren, both with public statements (for a while using the filibuster excuse, now just blatantly questioning her ability to do the job) and especially in private. Based on everything I am hearing from insiders at the White House and Capitol Hill, the two people who are most anxious to keep the President from nominating Warren are Geithner and Dodd.

What is going on with Dodd? I am told by extremely good sources that he remains extremely angry with Warren for daring to push back against the compromises gutting the consumer protection bureau, so that at least is one reason. More disturbingly, some are suggesting that he feels like he needs to carry water for the White House on this, so that they have a good excuse not to pick her, although I am more skeptical of that idea because I know there is a strong contingent at the White House that favor her nomination as well as some who oppose. Finally, the DC rumor mills have been ablaze for months that Dodd is looking at a lobbying career when he retires, and as former chair of the Senate Banking committee, he could be in line for some pretty sweet contracts with the big banks.

Whatever the reasons, this is a very disappointing way for someone with an honorable career like Dodd to go out on. I hope he steps back from the dark side.

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Progressive online action round-up, week of July 26th

by: Adam Bink

Thu Jul 29, 2010 at 18:13

I've started doing a round-up of smart, useful progressive actions I've seen land in my inbox or elsewhere on the web. A lot of folks have told me they found it helpful, so I'll try and make this a regular series from here on in. This is the 4th installment.

  • Another great action from our friends at CREDO Action. Fox News is vying for a front row in the White House Press Briefing room (Helen Thomas' old seat, actually) against NPR and Bloomberg News. It's vitally important that NPR be awarded the seat in the front row, not Fox. This eventually comes down to the officers of the White House Correspondents' Association. CNN's Ed Henry has come out in favor over "gentlemanly reasons". Whether it's Shirley Sherrod, ACORN, Van Jones, or the latest smear of the day, we need to tell the White House Correspondents Association that a right-wing propaganda outlet shouldn't get to sit in Helen Thomas' seat.

    Nearly 170,000 have already signed CREDO's action petition. They are faxing and delivering them to board members and the ED. Sign the petition here.

  • Special note Also, some colleagues working on this are looking for help with certain information. They know the Correspondents' Association meeting has been moved to Sunday, August 1st. We need to know where and when.

    We also need suggestions on direct contact info for these members who have a vote and/or influence over the decision:

    WHCA Officers 2010-2011
    President: David Jackson, USA Today
    Vice President: Caren Boah, Reuters
    Secretary: Steve Scully, C-SPAN
    Treasurer: Doug Mills, New York Times

    WHCA Board Members 2010-2011
    Carol Lee, Politico
    Michale Scherer, Time Magazine
    Julie Mason, DC Examiner
    Don Gonyea, NPR
    Ed Henry, CNN

    WHCA Executive Director
    Julia Whiston

    If you have contact info or suggestions, please drop me an e-mail at adambink AT gmail DOT com.

    This could be a really useful victory in efforts to delegitimize FOX. Thanks.

  • A small announcement- I've joined with Courage Campaign to take over managing their NOMTourTracker.com blog for the next few weeks. It's an outgrowth of Prop8TrialTracker.com to cover anti-gay National Organization for Marriage and their "Summer for Marriage" tour across country which ends in DC on August 15th. Courage Campaign has trackers on the ground exposing NOM and the company they keep with video, photos and audio of their rallies and the counter-protests (which, so far, have outnumbered nearly ever NOM rally in every location). My pieces the last few days can be found here, here, here, and here. This is an especially amazing video of a NOM supporter in Indianapolis, taken by two of our trackers:

  • Human Rights Campaign and Servicemembers Legal Defense Network are launching a campaign to finish the push on ENDA and DADT. Countdown 2010 is focusing on connecting LGBT Americans and allies to their representatives during the upcoming August recess, a critical period. Check it out.

  • If you attended Netroots Nation 2010 and loved it as much as I did, you can save money and register early for Netroots Nation 2011 in Minneapolis.

  • Dick Durbin is asking for votes on which Senate Dem challenger he should chip in towards. I went for Roxanne Conlin in Iowa, a friend of Mike Lux's who I met during Netroots Nation and found out she's been talking about same-sex marriage equality since 1979. Yes, 1979. And signed an amicus brief in favor of equality during the Iowa Supreme Court case. Mike will probably be writing more about her in the months to come.

  • NYS Senate homophobe majordomo Sen. Ruben Diaz called Fight Back NY, which is targeting Senators who voted against marriage equality, "Nazi-esque" and "the gay Gestapo". Classy. He's got a great challenger, Charlie Ramos. Chip in to FBNY to kick Diaz's rear.

  • In a fun case of progressive actions aimed at the progressive activists themselves, immigration activists staged a very enlightening action at Netroots Nation. I went through it myself. Watch here.

  • Several organizations are doing actions relating to getting Elizabeth Warren appointed as head of the new Consumer Financial Protection Agency. This of course is another vital action. MoveOn (here and here), Credo Action, and PCCC all have actions on this.

    Any additional good actions you've seen land in your inbox or around the web, leave them in the comments.

Discuss :: (14 Comments)

Warren battle: the bankers fight back

by: Mike Lux

Tue Jul 20, 2010 at 14:30

While the big banks won a lot of key battles in the financial reform fight we just went through, they also lost some important rounds too. Now, however, they are already fighting back on the turf they have come to dominate and master, the inside game: who gets appointed and what regs are actually written. If they win most of those battles, most of the good that was done in this bill will be undone.

The most significant of these early battles is the growing fight over whether Elizabeth Warren becomes the first head of the consumer protection agency which was her brainchild in the first place. The progressive coalition that came together to help pass the bill is pushing hard for her, as are many members of Congress. But the big banks are in full pushback mode. They have made it clear to everyone that she is their least favorite candidate- which in my mind is the exact reason for her to get the job. And they are working the Senate in earnest to have Senators make clear she is unconfirmable. Chris Dodd did some dirty work for them yesterday by starting that line going in the media dialogue about her, and now a variety of other Senators are making that point.

However, as the Huffington Post indicated today, and as Dodd knows very well as one of the prime authors of the bill, Warren can be named the interim head of the agency for as long as it makes sense to get it up and running without Senate confirmation. And here's the other thing: it would be a great boon to the Democrats to have the Republicans filibuster the leading consumer advocate in the country. The Republicans know that, too- this is not a fight they want to have. Dodd and the Democrats know they could win a fight over appointing Warren, and they know as well that she doesn't even need confirmation for the crucial early months the agency is coming into being. All this talk about whether she could win confirmation is pure political posturing on behalf of the big banks.

So now it is down to whether Obama, Geithner, and Rahm want to really take on Wall Street, or just talk about it. Sources on the Hill tell me Geithner and Rahm are not exactly falling over themselves in excitement about Warren, but I hope they are getting how important this is for the economy and their own politics. This is important to the Democratic base (see my post here about how much they need to reach out there), important to swing voters angry at the banks, and important to actually fixing the banking system.

One of Obama's closest and oldest friends told me during the transition that at his core, Obama is a true reformer. I hope he was right. Picking Warren would be the best sign yet that it is true.  

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Weekly Audit: Why Elizabeth Warren Should Head New Consumer Financial Protection Bureau

by: The Media Consortium

Tue Jul 20, 2010 at 12:54

by Zach Carter, Media Consortium blogger

With the Wall Street reform bill finally cleared through Congress, activists and intellectuals are pushing hard to make sure that this bill isn't the last word Congress utters about Big Finance. We need deeper and more robust reforms, but it's also critical to ensure that the new bill is implemented as effectively as possible. Part of that means appointing officials with a proven record as robust reformers-people like Elizabeth Warren.


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BREAKING: Geithner Opposes Elizabeth Warren for Consumer Protection Board!

by: Forrest_Brown

Thu Jul 15, 2010 at 22:21

( - promoted by AdamGreen)

BREAKING NEWS: Huffington Post reports that on the very day the Senate passed Wall Street reform and created a Consumer Financial Protection Bureau, Treasury Sec. Tim Geithner is urging President Obama NOT to appoint the most credible person as its leader: Elizabeth Warren.

Sign the PCCC's emergency petition to the President today -- telling him to appoint Elizabeth Warren.  

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Banking and Jobs: Inseparable Issues

by: Mike Lux

Wed Mar 31, 2010 at 10:40

With the health care fight finally resolved (you notice I didn't use the word "over"- the passage of this bill is only the first step in a long-term battle for a better health care system in America, so nothing is really over), everyone is turning their attention to the economy. As well they should.

In spite of certain establishment economists and pundits (and unfortunately a few administration officials who are politically tone deaf), saying that the recession is over and everything is back on track economically, the simple fact is that while we are no longer dangling over the precipice of another Great Depression, the economy is still broken in major ways. The official unemployment rate still hovers around 10%, and when you add in those who have given up looking for work, those who are underemployed and marginally employed but want fulltime work, the number of people needing full-time jobs is closer to 20%. Wages are still not going up, as even many of those who have jobs have had to take lower wage jobs to get by. Foreclosures are still happening at dangerously high rates, home values are not coming back anywhere near fast enough (or at all in some neighborhoods), and way too many homeowners are still dangerously close to being underwater. Business and personal bankruptcies are still way too high.

Now I know that the economy is officially "growing" again. The GDP is up, the Dow Jones is up, corporate profits are up. If you are an establishment economist, a trust fund baby, or a Wall Street financier, the economy feels like it's just humming along. For the vast majority of Americans, the noise they are hearing is less that of a hum and more of a car wreck. That's why voters react so poorly to Democratic politicians when they say things about how the economy is looking up.

The twin pillars to building a healthy economy are producing good jobs in big numbers, and fixing the badly broken financial system. These are not separate spheres, by the way- the two things are joined at the hip. Washington legislative policy wonks tend to divide everything into different bills they are working on, and DC coalitions follow that approach as well. But if we don't start creating decent-paying jobs, the foreclosure problems will keep getting bigger and housing prices won't recover. If we don't fix the financial sector, an economy where the finance sector is focused on gambling and bubbles rather than in actual investments that will create jobs will continue dragging us down, and endangering us in the future. With so much of America's wealth concentrated in six mega-banks, and those banks investing in little that's creating jobs, we are not going to create real private sector job growth.

Let me point you to three fascinating things worth reading that have come out over the last few days, because I think they all point to central economic issues as we go forward. The first is an important, news-breaking piece in Politico that Elizabeth Warren came out with yesterday morning. Citing a memo from the American Bankers Association from a 2006 fight against more oversight that makes the exact opposite arguments they are making now, Warren makes the absolutely central point that special interests like the American Bankers Association are hypocrites to the core. The special interests that are making out like bandits at the expense of the rest of us don't have any consistent philosophy except me first and only, and members of Congress and the administration should thus given their arguments the respect they deserve: which is to say virtually none.

The second is Sen. Ted Kaufman's brilliant speech on Chris Dodd's weak and disappointing financial reform bill. Sen. Kaufman's essential point is that Dodd is just moving the regulatory fixes around rather than doing what really needs to be done: break up the big banks. If these financial behemoths are not cut down in size, and walls are not built between the gambling financiers and the boring old bankers who loan money to invest in small businesses, the financial system will remain in danger and jobs will be far less likely to be created. Kaufman makes the argument that if you don't make real structural changes in the size, powers, and roles of the mega-banks, that you haven't changed anything important re how the banking system works. He is 100% on target. If having regulators was all that was needed to clean up the banking system, we never would have landed in the mess we did in the financial collapse. You have to change the power relationships as well- banks need to be smaller, and the trading side of the banking industry should not infect the more traditional loan and investment side of the banking industry.

Finally, I want to point you to a really thoughtful new commentary in Huffington Post by Leo Hindery. His frame on the political dynamic right now is intriguing: that Republicans are in fact the disloyal opposition, so violently opposed to Obama that they have gotten into bed with the fomenters of open and potentially violent revolution; in their place as the loyal opposition are those of us progressive populists who want Obama to take on the banks and far more aggressively create more jobs. Leo's point is that there is a growing group of people who are loyal to Obama in the sense that we very much want him to succeed, we want to help him, and certainly support him in opposition to a tea party/Glenn Beck-aligned Republican Party; but that we are in a sense in opposition as well, believing we need dramatically more progressive economic policies.

We live in a remarkable moment. We just passed a universal health care bill, something the progressive movement has been fighting for about a century or so. But we are still faced with a broken economy- a badly warped and dangerous financial sector, and a massive lack of good jobs- and we need for bolder thinking that we are getting on how to fix it. Whether or not you call us the loyal opposition, it is time for progressives to demand more- on creating jobs and fixing the banking system- in terms of fixing the economy.

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The Problem with the Legislative Process

by: Mike Lux

Tue Mar 16, 2010 at 09:47

There are two things that are sucking all the life out of that surge of hope so many people felt when Obama came to office. The first is the perception that, early on, Obama chose to help rescue the big banks but has been more passive when it comes to creating new jobs for people, a perception which, while unfair in some regards, is reinforced by record profits and bonuses last year for the big banks we rescued while unemployment is stuck around 10%.

The second is that the legislative process always seems like it follows the same depressing pattern: Obama proposes a legislative package that makes some concessions to industry but is pretty decent legislation overall; the House then makes some other concessions to industry and passes a more compromised version of what Obama had laid out; the Senate then gets stuck for a very long time and then tries to break the logjam by making massive compromises to industry lobbyists, but even that doesn't seem to get the deal done. Everyone who ever cared about the issue and making real change gets depressed. Rinse and repeat.

Unfortunately, both of those problems in terms of dousing any excitement level about the Obama agenda are coming to a head on financial reform. Both the general public and the progressive base of the Democratic Party feel like the big banks have already gotten way too much help and now Chris Dodd comes out with a bill that seems to have given a huge amount away to the big bank lobbyists. As Simon Johnson put it:

The lobbyists did their job a long time ago. Treasury sent up a weak set of proposals Secretary Geithner apparently felt that to do otherwise would be just to seek punishment for past wrongdoings; there is too little concern at the top levels of this administration regarding what comes next. And Senator Dodd was pushed hard by various interests to weaken all potentially sensible proposals including anything that would bring greater transparency and safety to the derivatives market.

But of course even all the bad ideas Dodd put in his bill to please the big banks didn't actually win over a single Republican vote, just as all of Max Baucus gifts to health industry didn't deliver any Republican floor votes for the health reform bill. Now when you start to look at the details of Dodd's bill, just like with the health care bill, you will find some very good things to like, enough that a great consumer advocate like Elizabeth Warren decided to give it some modest support. Here's the problem though: if you are trying to get people excited about your reform agenda, and they are too busy debating with themselves over whether to even support the bill, you have a big, big political problem.

What it feels like is that you are breaking faith with the people who put you in office. Coming out with this kind of highly compromised bill on your single best issue for the fall elections is how you tick off both your base and angry independents at the same time. This is how Democrats will get themselves destroyed in the 2010 elections.

The Democratic Party needs to pick a fight, draw a line in the sand, and dare the Republicans to filibuster. This issue is the one to do it on, and right now is the time to do it. Lets debate whether the Federal Reserve should get a lot of new power. Lets debate whether to start breaking the big banks up. Let the Republicans be on the other side of those issues (and let the Democrats who are friends with the big bankers join them if they want). The Democrats need to have a full-scale fight on these issues, for the sake of their electoral fortunes in the fall, and the sake of their souls.

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Weekly Audit: Don't Let Citizens United Wreck Our Economy

by: The Media Consortium

Tue Feb 02, 2010 at 11:36

By Zach Carter, Media Consortium Blogger

In a landmark decision last week, the Supreme Court ruled that corporations could spend unlimited funds to influence American elections, overturning a century of legal precedent. The Court's ruling in Citizens United v. FEC undermines the integrity of the U.S. government, as President Barack Obama emphasized at his State of the Union address. But the decision also deals a damaging blow to the U.S. economy by encouraging lawmakers to write economic rules that benefit specific companies at the expense of everyone else.

The editors of The Nation lay out the High Court's hubris in no uncertain terms:

The Citizens United campaign finance decision by Chief Justice John Roberts and a Supreme Court majority of conservative judicial activists is a dramatic assault on American democracy, overturning more than a century of precedent in order to give corporations the ultimate authority over elections and governing. This decision tips the balance against active citizenship and the rule of law by making it possible for the nation's most powerful economic interests to manipulate not just individual politicians and electoral contests but political discourse itself.

Citizens United and the financial crisis

How does this ruling have any bearing on the economy? Markets are not simply the product of random interactions between consumers and producers. Even under the most radical, laissez-faire economic theories, markets are defined, coordinated and policed by the government. For the economy to function at all, we need the government to define what constitutes fair play.

But over the past few decades, we've watched Congress and the executive branch rewrite those rules of the game under heavy corporate influence, creating artificial profits for a set of favored companies with very bad consequences for the broader economy.

The U.S. banking industry serves as a prime example. Since the 1980s, banks have been spending like crazy in all kinds of elections, and getting just about anything they want in return. I interviewed Harvard University Law Professor and TARP Oversight Panel Chair Elizabeth Warren for AlterNet, and she presented a concise but unsettling economic history of consumer protection law:

Thirty years ago we had laws that put some basic fairness into the consumer credit market.  Over time, the large financial institutions captured the regulators who were supposed to be the cops on the beat to enforce those laws. They also pumped hundreds of millions of dollars into Washington to make sure that no new cops were put on the beat. Without good laws, the industry started selling ever-more-deceptive products, and their friendly regulators looked the other way.

The bank lobby and the AIG bailout

In Mother Jones, Corbin Hiar reveals how even a bank that engineered a massive tax fraud scheme was able to benefit from the AIG bailout. Major financial institutions convinced Congress to block any regulation of credit default swaps (CDS) all the way back in 2000. CDS contracts were essentially insurance on the value of financial assets-if the assets lost value, banks would still get paid as if they were highly profitable.

CDS insurance encouraged banks to engage in risky mortgage lending, and allowed them to book huge profits on those risky mortgages during the housing boom, even though many of those mortgages were doomed from the get-go. AIG binged so heavily on CDS that the company was on the brink of bankruptcy in the fall of 2008. But an AIG bankruptcy would have hammered the major banks who served as AIG's betting partners, most notably Goldman Sachs. Those banks would have received just pennies on the dollar from a bankrupt AIG. But under the bailout, the New York Federal Reserve paid the banks off at full value, without demanding any concessions whatsoever.

"The credit crunch was an existential threat to every over-leveraged big bank. What's most shocking about the AIG bailout ... is that these endangered banks were able to extract such a sweet deal from the government," Hiar writes. "The banks were paid the full value of all the CDS contracts they had made with AIG-including those mortgage-backed securities they had bought when it was clear the subprime market was collapsing."

The only AIG counterparty to even consider taking CDS losses was Swiss banking giant UBS, which was negotiating a separate settlement with the U.S. government over a massive tax evasion scheme. But even the tax fraudsters at UBS ultimately received full payment on their CDS exposure, and it now appears that the Swiss bank will be able to protect its wealthy tax-evading clients.

With the AIG bailout, the corporate takeover came full-circle. The banks purchased radical deregulation in Congress, and when the deregulated banks destroyed themselves, the government paid out billions to save them. The rest of the economy was ravaged by predatory lending, and taxpayers, not bankers, footed the bill for bank losses.

Redefining corruption

So the Citizens United decision will not introduce corporate influence in elections. Instead, it takes an uneven playing field and tilts it further in the favor of corporate executives. The Roberts court didn't just open the floodgates for corporate cash in U.S. elections and call it a day. It also explicitly redefined "corruption" to give corporations-and anyone else-greater leeway to financially curry favor with politicians. Heather K. Gerken details the new definition for The American Prospect:

The most important line in the decision ... was this one: "ingratiation and access ... are not corruption." For many years, the Court had gradually expanded the corruption rationale to extend beyond quid pro quo corruption (donor dollars for legislative votes). It had licensed Congress to regulate even when the threat was simply that large donors had better access to politicians or that politicians had become "too compliant with the[ir] wishes." Indeed, at times the Court went so far as to say that even the mere appearance of "undue influence" or the public's "cynical assumption that large donors call the tune" was enough to justify regulation. "Ingratiation and access," in other words, were corruption as far as the Court was concerned.

Most of us would consider the key lawmakers ensnared in the Jack Abramoff scandal as fundamentally corrupt-Abramoff flew former Republican Whip Tom DeLay of Texas to Scotland for golfing vacations in an effort to win greater leverage over DeLay's legislative agenda. The court's ruling claims that this kind of activity is not corrupt, and bars Congress from passing any laws to counteract it. As filmmaker Alex Gibney emphasizes in an interview with Amy Goodman of Democracy Now!, the court has essentially taken Tom DeLay's corporatist philosophy and made it a piece of constitutional law.

"Tom DeLay's view is, we spend more money on potato chips than we do on political campaigns. His view would be, let the money rush down like great waters,," Gibney says. "I think the court was channeling Tom DeLay when they issued their recent decision."

Why citizens need to speak out now

So what can we do about this? As GRITtv's Laura Flanders discusses in a roundtable discussion with several progressive leaders, there will be a long fight for a Constitutional Amendment to ban corporate influence in politics. Until then, as progressive strategist Mike Lux explains, citizens will have to take an aggressive stance against Corporate America as shareholders. Corporate power is exercised by a handful of executives, but the resources that support that power come from ordinary Americans who own stock in those companies, primarily through retirement plans. By demanding that the giant firms we own do not highjack our democracy with lobbying, we can limit some of the damage from the court's recent decision.

If you liked the bank bailouts, then there's plenty for you to love about the Citizens United decision. If you didn't, then it's time to speak up.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

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