By proposing financial reforms that won't curb Wall Street excess, U.S. policymakers have offered an unacceptably weak response to our enormous financial crisis. If voters don't demand that their elected representatives help workers and consumers instead of simply boosting corporate profits, the economic downturn will last for several more years and leave the economy vulnerable to another bank-induced meltdown.
The banks have unbelievable lobbying clout. In an interview with Cenk Uyger of The Young Turks, Heather Booth, executive director of Americans for Financial Reform, describes how one-sided the Wall Street reform fight has been. Despite broad public support for a fundamental financial overhaul, going up against the bank lobby is, as Booth describes, "a David and Goliath fight." It's basically Americans for Financial Reform against every major corporation in the U.S.
Booth notes that the Chamber of Commerce has vowed to spend $100 million on a campaign to defend the "so-called free enterprise system"-you know, the "free market"-in which corporate lobbyists spend millions of dollars to write the rules of the economic game. Just seven financial lobby groups have spent a massive $147 million peddling influence over the past two years.
In fact, as Janine Wedel observes for Salon, the U.S. economic system is starting to look an awful lot like the clannish systems of government that looted Eastern European countries in the early 1990s. Today, the public good takes a backseat to the narrow interests of powerful corporations.
With the Obama administration working with advisers from Citigroup and Goldman Sachs, we're not just watching Wall Street write its own regulations. We're watching the financial sector re-write the official role of the government in the economy. In this new role, the government's top priority is securing profits for corporate America.
"The intertwined coterie of financial and policy deciders in the United States is creating not only the financial architecture of the future, backed by the power and billions of the state, but, more generally, new relationships between the bureaucracy and the market," Wedel writes.
GRITtv's Laura Flanders echoes this theme in an interview with John Perkins, author of Confessions of an Economic Hit Man, and journalist Russ Baker. Lobbyists have so thoroughly hijacked the U.S. economy, Perkins argues, that the nation's government now resembles those of Latin American nations he worked with in the 1980s and 1990s.
"I don't think the U.S. president has much power these days, to be honest with you. . . . It's the big corporate executives who call the shots today, and let's face it, they financed Obama's campaign," Perkins says.
The very efforts the government deployed to save the financial system are being perverted to create another disaster. In a five-part interview with Paul Jay of The Real News, Jane D'Arista, an influential economist and author of The Evolution of U.S. Finance, explains how Wall Street destroyed itself over the past decade. By borrowing massive amounts of money, Wall Street was able to place bigger bets in the capital markets casino, resulting in huge profits when those bets paid off. But when the bets backfired, the losses were just as massive. Companies couldn't pay them off, so the government stepped in to support them.
One of those support mechanisms came from the Federal Reserve, which began making incredibly cheap loans to firms that engaged predominantly in speculative trading. The Fed used to lend exclusively to commercial banks, which used the money to make loans that helped grow the real economy. But now those loans are being used to support risky securities trading, so we're seeing big profits in the financial sector, without much help for workers and consumers. This is a major long-term problem-if the economy can't keep pace with the Wall Street casino, those speculative trades are going to backfire and we'll be right back to the chaos of September 2008, only with an even weaker economy.
All hope is not lost. As Perkins and Baker emphasize in their interview with Flanders, citizens have to demand corporate accountability and a government that actually serves the public good. For much of the past decade in Latin America, governments have been elected that stood up to major corporations and demanded that they stop pillaging their nation's resources at the people's expense.
In addition to demanding much stronger reforms for the financial sector, we have to demand that the government respond seriously to problems facing workers. With the unemployment rate at 10.2% and expected to go still higher, we need jobs. As Steve Benen notes for The Washington Monthly, Obama's economic stimulus package helped stave off total economic devastation. What we need now is another stimulus to get people back to work, not just slow the pace of job losses.
"A bold, ambitious jobs bill can make a huge difference-the stimulus got us out of the ditch, a new effort can get us going in the right direction again," Benen writes.
And the only argument against this plan is that we "can't afford it." That is-the government's fiscal deficit is too high, and we just can't spend money to help people in real economic trouble.
But as Christopher Hayes writes for The Nation, the deficit excuse is pretty pathetic. Economic stimulus bolsters economic growth, thus improving tax returns for the government in the future. And any spending on any project can be taken out of the budget from other measures. Hayes notes that our massive military spending is almost never included in discussions about "fiscal responsibility." If we were really worried about how much it would cost to fix the economy, we could stop spending so much money killing people.
"Fiscal conservatism and deficit concern is nearly always code speak in Washington for something else," Hayes writes. "Most often, when someone in Washington says they're concerned about the deficit, what they're really saying is, 'I would like to make sure we have a government that focuses maximally on blowing people up.'"
The government has to start saying 'no' to corporate America. Corporate profits are not the same thing as a strong economy. We need to demand an economic policy that answers to workers, not just bank balance sheets.
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Natasha's post last night on the DNC/OFA throwing pro-choice advocates and women everywhere under the bus got me thinking about the role of those organizations in general, and the Administration's choices of late.
There is a general belief, both in the Village and even among some people I know in progressive politics, that the DNC's role is to expand Democratic majorities and that's it. For all my criticism of OFA's role in Maine, I've had a few people say to me they shouldn't get involved in ballot fights. It's a D vs. R apparatus and that's that.
OFA's primary focus is to advance the president's agenda. If you advance the president's agenda that's going to translate politically and help Democrats throughout the country. And frankly keeping people engaged on the issues in an off year is going to translate in a mid-term year. They are going to continue to be engaged.
So that expands the definition. What does that mean in terms of OFA's actions of late? Well, they didn't lift a finger to help in Maine- even to the point of diverting resources to New Jersey. They knew about the Stupak amendment for quite awhile and didn't lift a finger. But Obama (if tepidly) came out against Question 1 in Maine and against the Stupak amendment, even pledging to work to remove it in conference. This is the President's agenda. And Sevugan said winning these fights helps Democrats around the country. And that keeping people engaged on the issues- and certainly, choice is an "issue"- helps.
So my question is, why isn't OFA doing its job? I realize OFA is an arm of the DNC. But should it exist to re-elect Democrats, or to actually carry out what Stewart and Sevugan say it should?
There are a number of arguments I've heard against OFA getting involved. One is that OFA should only work on issues that "everyone" agrees on. Another is that pressuring members violates the DNC's core mission of electing Democrats, because having a bunch of people call their members' office and ask the intern to tell the member to vote a certain way will somehow cause them to lose their re-election. Another is that if you "make aware" Obama supporters (also known as citizen engagement) in, say, John Tanner's district that he might suck on women's reproductive health, you'll rile them up and Tanner might lose Democratic votes for re-election, which violates the core mission of the DNC. None of these arguments are very persuasive. OFA could have even done a bland, list-wide "call your member and ask him/her to x". That way you don't name someone specifically, and you can reason that you're targeting all members of Congress because it's such a critical issue, not just Democrats.
The strongest argument I've heard is that OFA pressuring Democrats will cause congressional Democrats to pick up the phone and scream at Obama and screw him, and us, on other legislation. Relationships matter. Okay. But Obama is involved in party primaries, supporting Sens. Bennet, Gillibrand (should she have one), and Specter. His administration is pushing Gov. Paterson to bow out of a re-election bid. George W. Bush got involved in supporting Specter in 2004 and Chafee in 2006 in their respective primaries. Rahm himself got involved in congressional primaries in 2006, and has a reputation for working members hard for votes, engaging allies to pressure them, and so forth. So what's the difference between these actions and asking activists to make phone calls to advance your agenda? Both can damage relationships, both have rewards. If Obama's picks lose, those people can screw him. In this case, the reward is protecting women's reproductive freedom and advancing health care reform. So how come Obama takes a risk by siding with Senate and gubernatorial candidates, but remains silent on core issues of the Party?
In politics, relationships do matter, and I consider that in my own work. But the argument in terms of that here just doesn't hold water. Moreover, we only have a short window in which to enact real progressive change, and I think, within reason and wherever possible, the President should use all available tools to obtain that change and be our "fierce advocate". Please, Mr. President, include OFA among those tools.
So we are now finding out the answers to some of our questions about which members of Congress actually represent We, the People...and which ones represent, Them, the Corporate Masters.
We have seen a Democratic Senator propose a policy that would put people in jail for not buying health insurance and a Democratic President who has taken numerous public beatings from those on the left side of the fence for his inability to ram something through a group of people...and yes, folks, the entendre was intentional.
But most of all, we've been asking ourselves: "why would Democratic Members of Congress who will eventually want us to vote for them vote against something that nearly all voting Democrats are inclined to vote for?"
Today's conversation attempts to answer that question by looking at exactly how money and influence flow through a key politician, Montana's Senator Max Baucus-and in doing so, we examine some ugly political realities that have to be resolved before we can hope to convince certain Members of Congress to vote for what their constituents actually want when it really counts.
The problem with this outrage is that most of the spending overall, and most of the increase is spending, is for congressional staff. If Congress were to cut those salaries or to cut those staff, here is what would happen:
An even higher percentage of Congressional staff would become Ivy League trust-fund babies who don't need the money. Given that Congressional staff salaries are already pretty low compared to other professional jobs in major urban areas, a very high percentage of Congressional staff are already Ivy League trust-fund babies.
Hard for me to see how the "make more Congressional staffers upper-class Ivy Leaguers" platform is a particularly populist way to improve Congressional responsiveness to the economic concerns of anyone but the top 1-10% of income earners.
There are 35,000+ registered lobbyists in D.C. Most of those lobbyists are highly paid (5X to 10X the amount of Congressional staff) corporate shills. These lobbyists perform much of the actual congressional staffing on Capitol Hill, from fundraising, to writing legislation, to informing members of Congress about policy, to connecting members of Congress with each other and on and on. They perform these functions because they are effectively free staff for otherwise overworked and understaffed Congressional offices. They fill a staff vacuum for Congress.
If we were to cut the Congressional budget and reduce the amount of staff available to members of Congress, then these well-heeled corporate shills would perform an even greater percentage of Congressional staff functions. Again, hard for me to see how handing over an even larger percentage of the day to day operations of Congress is a particularly effective way to get Congress to become more responsive to the needs and desires of the American people.
So yeah, let's us on the left bash Congress for increasing its operating budget, most of which goes to staff. I'm sure it will be good for a little populist anger, but the actual policy we are advocating for is a further corporate takeover of government. Which is exactly what all of the right-wing, anti-government populist outrage in this same vein is designed to do.
Look, I love BarbinMD, and I am pretty pissed at Congress right now too, but if you want a government that is not run by the wealthiest people and institutions of our society, then you have to pay for it. People from middle-class backgrounds with huge college debts cannot live in Washington, D.C. on $30,000 a year. Individual members of Congress simply cannot perform all of the duties required of an effective Representative of the people without staff support. And lefties who whip up populist anger about the size of the Congressional operating budget are doing their own ideological and policy causes a real blow by advocating that we cut the Congressional budget.
And for the record, I grew up in an upper middle class household, am a part-owner of an LLC, and attended to St. Catherine's College at Oxford University. So it's not like I am bashing corporations and well-to-do Ivy Leaguers just out of spite. But hey, if you think that only people even more privileged than me should be running the country, by all means, keep advocating for cuts to the Congressional operating budget.
Just when you thought the Baucus revolving door couldn't spin faster: LittleSis has found that the Senate staffer responsible for devising the tax policies at the heart of the Baucus plan is a former lobbyist for health insurance and pharmaceutical interests, including an insurance industry front group.
Cathy Koch, who heads the Senate Finance committee's tax department, was director of global government affairs at pharmaceutical company Amgen until early 2007. Before that, she worked at Ernst and Young, where she lobbied on behalf of a number of large insurance and pharmaceutical companies, including Aetna, Blue Cross, Eli Lilly, and Pfizer.
Tax incentives and calculations are central to health care reform plan that Baucus sent to members of the Gang of Six this weekend, including a penalty on health insurance companies offering expensive plans. The "Cadillac" plan tax has received significant media attention as a particularly important and controversial feature that targets insurance companies.
In theory, constituent phone calls to congressional offices are a means for average citizens to voice their concerns on legislation and general governmental matters to their elected representatives in Congress.
In reality, constituents phone calls to congressional office are a means for corporate lobbying groups to distort public opinion and push legislation to the right on any given issue.
Whatever the idealistic, democratic theory behind constituent phone calls to congressional offices, the reality is that they have become yet another means for right-wing corporate infrastructure to further its interests within the federal government. In the extended entry, I explain why.
This won't be a long post, because I just need to ask a simple question. With Ted Kennedy too sick to come down to DC and make the committee vote, Democrats will need every Senator on the HELP committee to produce a strong bill, a bill that fights for what Teddy Kennedy has been fighting for his entire life. The last holdout is Kay Hagan, who represents a state (NC) that is one of the worst in the country in terms of percent of people without health insurance. The insurance companies are lobbying Hagan against the bill, because they don't like having to compete with a public option. My simple question is this: Teddy Kennedy is too sick to be there, Senator Hagan, so he is relying on your vote for the issue that he has fought for passionately his entire life. Will you betray him to help the insurance companies? You need to make up your mind now.
In an article in today's New York Times, unnamed Obama advisers float a Tom Daschle trial balloon for Chief of Staff in an Obama administration; he's already been widely mentioned for other senior policy positions.
Appointing Daschle, who's pulls in around a million dollars a year as a "Special Policy Advisor" (not a lobbyist) for the law firm Alston and Bird, would be a violation of the spirit, if not the letter, of Obama's pledge that lobbyists "will not run my White House" or his administration, one of the hallmarks of his platform and one of the main way he differentiates himself from John McCain's lobbyist-riddled campaign.
Although Daschle technically avoids lobbying requirements, here's how Bob Dole described the reasoning behind recruiting Daschle to join him to the Washington Post:
"He's got a lot of friends in the Senate, and I've got a lot of friends in the Senate, and, combined, who knows -- we might have 51," Dole joked. "It's going to work fine. You need some flexibility and diversity. I don't think any successful firm is all Democrat or all Republican."
John McCain's national finance co-chairman has stepped down - the latest adviser to leave the Republican senator's presidential campaign due to ties with lobbyists.
Former Texas Congressman Thomas G. Loeffler, a major fundraiser for McCain, is the fifth person to leave the campaign in the last eight days over questions about lobbying or past connections to lobbyists.
"Mr. Loeffler has resigned from his position with the campaign," McCain spokesman Tucker Bounds told CNN Sunday.
Stung by the news that two aides once lobbied for the Burmese junta, John McCain last week rolled out a sweeping new conflict-of-interest policy for his campaign, requiring all staffers to fill out questionnaires identifying past or current clients that "could be embarrassing for the senator." Aides say that McCain was furious over the Burma connection (which he learned from a NEWSWEEK story) and was "adamant" about banning campaign workers from serving as foreign agents or getting paid for lobbying work.
But the fallout may not be over. One top campaign official affected by the new policy is national finance co-chair Tom Loeffler, a former Texas congressman whose lobbying firm has collected nearly $15 million from Saudi Arabia since 2002 and millions more from other foreign and corporate interests, including a French aerospace firm seeking Pentagon contracts. Loeffler last month told a reporter "at no time have I discussed my clients with John McCain." But lobbying disclosure records reviewed by NEWSWEEK show that on May 17, 2006, Loeffler listed meeting McCain along with the Saudi ambassador to "discuss US-Kingdom of Saudi Arabia relations."
Ah, Burma and Saudi Arabia. Those are some nice groups to which McCain aides have lent their services.
As the second article notes, the McCain campaign is trying to minimize the damage of these dismissals by instituting a new "conflict-of-interest" policy. However, I think that this policy will probably hurt McCain more than it will help it. This is because the policy was clearly only instituted as a political move since, if McCain really cared about these lobbying connections, then it would be the sort of policy the campaign put in place when it started. Unlike Edwards and Obama, who put far more restrictive policies in place at the start of their campaigns, the McCain camp only put their policy in place once they realized these repeated dismissals would make a laughingstock out of McCain's image as a maverick reformer. As such, not only will this policy be seen for what it is, a transparent political move, it will force McCain to keep firing many more aides as these lobbyist connections keep appearing.
Trust me, the connections will keep appearing, at a steady pace. Stories like these don't simply appear because the national media is filled with excellent, dogged, investigative journalists. Rather, progressive groups like Campaign Money Watch and Progressive Media USA play large roles in conducting these sorts of investigations themselves, and then pushing the media to write about them. As such, the Obama campaign would be wise to ease their restriction on donors giving these groups money. The consistent appearance of these news stories tying McCain to lobbyists and special interests are also more evidence of the need to continue funding non-campaign oriented progressive infrastructure.
Michael Kieschnick, one of the most brilliant organizers and thinkers that I know at the higher levels of the progressive movement, has an important question on the surging market for Democratic lobbyists, former staffers leaving their positions of influence to make money working to influence policy on behalf of wealthy interests for as much as a million dollars a year. Kieschnick is stark; this kind of influence peddling is wrong. I agree, as it is also incredibly perverse in terms of incentives for decision-makers. And yet, these people are competing with corporate law partners, hedge fund managers, corporate titans, media pundits, or other top tier credentialled social stars as senior operators at the top of their game.
The problem is big and complex, because expecting virtuous moral self-deprivation isn't reasonable. Rahm Emanuel left the Clinton White House for a few years, made $20M as an investment banker using his earned contacts, and became a Congressman in 2002. There's nothing you can do with ethics legislation to prevent that kind of path to wealth and influence. The only real solutions involve a progressive tax code, open legislative processes, and public financing of elections.
Here are my thoughts on YearlyKos and the presidential festivities.
Most of these thoughts are about Hillary, but I'll start with a more general observation: I thought that being in front of this audience made Edwards, Dodd, and Richardson come alive in a way that I haven't seen yet in the debates/forums. My view is that Richardson, while doing many other things well in the campaign so far, has really sucked in the debates up until Saturday. Dodd and Edwards have been better, Edwards even having some good individual moments of challenge to the two frontrunners, but have been pretty dull overall. All 3 of them, though, seemed to be really relaxed and energetic. They all built off the crowd's energy, and did a good job in pushing their message in a way that got a great response.
Because the YK audience was so passionate, engaged and well-informed, it really gave those candidates a chance to let their hair down and show off their stuff. With the frontrunners, things were decidedly more mixed. Oddly enough, I have almost no memory of what Barack said during the forum. He had pretty much the same demeanor, rhetorical style and language that he has had at every other debate, so he didn't stand out at all to me. I guess he wins points on consistency, but I think he was too careful, and lost a chance to connect and bond with the audience emotionally.
There's been a lot of talk about Hillary since Saturday including Matt's recent post here. I like Hillary better than Matt does, as has been discussed on OpenLeft.com before, but I think Matt's political analysis is right: I think she did hurt herself politically with the lobbyist answer, and Edwards and Obama will, if they are smart, use that against her from here on out.
Here's my view of her at YK, and it's mixed: I thought her education answer was way too long, and I think she seized on a safe question because she was very nervous about the crowd and what kinds of questions she would get. It was a mistake. I think the "ask Al Gore about media consolidation thing" wasn't great either, although she said some good things about needing more competition in the media space, and about net neutrality. But overall, not a good answer. She answered the FISA question in a solid, straightforward way, and she was honest and direct to the 5-part question. Some of what she said I agreed with and some I didn't, but she gets points with me for straight answers. The education answer was the only one where she went on for 10 minutes.
In the debate, I thought she froze on the lobbyist money question, and gave a completely defensive answer, and I wish she had been more honest about it. For her sake, I wish she had pushed back instead of being defensive, something to the effect of: "You know what, I am influenced by the people who give me money, just like every politician is. That's why I'll make public financing a priority. And I take money from lobbyists in D.C.- both from corporate lobbyists and from lobbyists representing unions and other progressive causes. But I would argue that if a business executive raises $250,000 for John or Barack, that business executive will have a lot of influence over them, too, and the fact that they're not a registered lobbyist in D.C. doesn't make their influence any less, so let's cut the crap and work together for public financing." An answer like that would have been pretty cool, but we didn't get it, and her defensiveness didn't help her.
I think politicians should always get some credit for engaging with audiences they know will be tough on them, and I was glad she came. If she hadn't come, most progressive bloggers would have attacked her hard for that, but many folks are attacking her hard anyway, so she still gets points from me for doing the right thing and showing up. The people who don't like Hillary still don't like her, but her outreach and engagement should be applauded.
It was a fun afternoon, and I think we have a lively race on our hands, one that the progressive movement is clearly making a difference on. The dynamic from here will be fascinating.
So what's with the debate over lobbyists? Well, I've lived in DC for a little less than two years, and I know plenty of them at this point. They aren't all bad people. But I always come back to an experience I had a few months ago when talking to a Goldman Sachs employee who funds a centrist think tank. We got into a discussion about Goldman's green strategy fund, and I asked him why there wasn't closer collaboration with environmental groups that want to move capital towards green industries. He argued that Goldman wants no influence over public policy. I asked him why Goldman hires lobbyists, and he answered, with a straight face, that they hire lobbyists to 'educate the public and decision-makers about the consequences of their public policy choices'.
That, to me, is the culture of lobbying. Individual lobbyists may be worth defending, but that is what lobbying means to the public. And with that, let's go to Hillary Clinton at Yearlykos.
I was quite surprised by Senator Clinton's presence. I've written that Clinton is a brilliant and charismatic politician who does not really share our values but is able to use rhetoric to mislead liberals about her positioning. I thought she was ahead and was going to march to the nomination quite easily, making no mistakes, taking no risks, and facing little to no criticism from her opponents. The race had become so static that it was just boring, a representation of a political system run by elites who only want to tinker around the edges (otherwise known as a 'new kind of politics').
But I think Clinton screwed up pretty badly and showed her insider elite mindset, and did it on video where it can be exploited by other candidates. Her most significant screw-up was the flub on lobbyists where she defended the profession. Keeping union-buster Mark Penn on staff as chief strategist is one thing, but overtly making the argument that lobbyists are people too, you know, and doing it on video, is brutal. Edwards has now used this argument to go after the whole Clinton legacy.
Democratic presidential contender John Edwards on Monday criticized former President Clinton, arguing that he allowed corporate insiders to shape the 1993 North American Free Trade Agreement that has cost U.S. jobs.
Edwards' complaints about the former president beloved by voters in his own party was a defiant move meant to highlight rival Hillary Clinton's relationship with special interests.
It comes two days after Clinton refused Edwards' challenge to stop taking campaign donations from lobbyists, saying many represent good causes.
Obama also went after her with a clever line about how corporations don't spend billions in lobbying fees to promote the public interest (except for Goldman Sachs, of course). In one sense, Clinton is correct; lobbyists are people too, and social workers and puppies and kittens have lobbyists. But 'lobbyist' is code name for a whole culture, and she has revealed herself as tied into it completely.
There were three other moments that I think were significant. In the break-out session, she refused to answer a question about whether she'd repeal the Telecom Act of 1996, saying that you should 'ask Al Gore' since she had nothing to do with the legislation as first lady. It was a poor response, because the question was about what she would do not what Al Gore did. This was followed by a refusal on state to answer a question about media consolidation and the Wall Street Journal.
The other moment was when she was asked whether we are safer since 9/11, and she responded by saying that we are safer in the sense that Americans before 9/11 would never have consented to taking off their shoes and getting searched at airports. This unwitting revelation about her views on the increased need for artificial 'security theater', the notion that violations of our rights makes us safer, needs further examination, debate, and exposure.
Splicing all the video together, or her flubbing the lobbyist line, refusing to answer the media consolidation question, and avoiding responsibility for media policy by telling people to ask Al Gore, would be devastating.
