“If We Build It, He Will Come”

Washington has become Wall Street’s “field of dreams.” There, the money conglomerates engage in their beloved sport of financial speculation, cheered on by a small but powerful group of public officials who have sold out the rest of the country.

Deregulation was a home run for the financial industry. Wall Street’s friends in Washington sacked the rules of the game, unleashing the hedge funds, banks, investment firms, insurance companies and other speculators who made billions before the crash, then got billions more from the taxpayers after the crash.

Meanwhile, as today’s New York Times points out, almost nothing has been done about “derivatives,” the virtual technology for the speculation that drove our economy into the dugout three years ago. Federal agencies that were supposed to issue new regulations to prevent another debacle have been tied up in knots by Wall Street lawyers.

Jobless and fearful for their kids’ future, people are furious about what happened.  But it was always going to be a daunting task to mobilize the public behind the necessary reforms when they are so complex, and anything drafted to appeal to directly to Americans’ wallets – say, by providing a cap on credit card interest rates, or low-rate mortgages, or other forms of financial relief – would have inspired the financial industry to retaliate with nuclear weapons. Neither the President nor anyone in Congress were willing to start that fight, principled as it would have been.

So it has all come down to Elizabeth Warren, the brainiac Harvard law professor who suggested, in a law review article in 2005, that Congress create a new federal agency with the mission of protecting consumers against false advertising, misleading contracts and the general thievery of the financial industry.  Democrats proposed the agency as part of the Wall Street reform legislation in 2009, and after the industry thought they had whittled it down to something they could easily live with – or simply get around – Congress created the Consumer Financial Protection Bureau and the President signed it.

Warren was the obvious person for the job, and almost immediately Americans began calling on President Obama to nominate her for the post.

What Wall Street didn’t realize at first is that it is way, way easier for Americans to get behind a human being than a thousand-page piece of legislation that has been lawyered and lobbied into mush. America has become a celebrity-driven culture, and while Elizabeth Warren is no Lady Gaga, she is one of a small number of outsiders that have occasionally busted up the D.C. establishment – just as Ralph Nader did in the 1970s, and Jimmy Stewart fictionally did in the Frank Capra movie “Mr. Smith Goes to Washington.”

Whether President Obama will nominate Warren to the position has become the defining question of his Presidency for millions of Americans, especially those who voted for "change we can believe in" in 2008.

When confronted with demands by civil rights leaders to take action against racial discrimination in the late 1930s, President Franklin Roosevelt’s legendary retort was “make me do it.” Whether he ever said that, the strategy he suggested is literally page one of the best manual for citizen empowerment and political organizing.

Let’s put it in more contemporary terms. President Obama has made it clear he doesn’t want to nominate Warren. It’s just another fight he’d rather not have. He embraces consensus, not controversy.

But the President has to know she’s the best person for the job. So the burden is on Americans to make it impossible for him not to nominate her. Part of that means punishing the people who are working against her – members of Congress, and those in the Administration – because they are doing Wall Street’s dirty work. These are the same people who let Wall Street plunder our nation and then bailed Wall Street out with our money.

My guess is, we can make Obama do it.

A Trifecta of Failure

The near calamity on Christmas Day capped a year - a decade - when the ability of our government to protect its people was tested and, when it counted most, failed.

As Maureen Dowd at the New York Times put it: “If we can’t catch a Nigerian with a powerful explosive powder in his oddly feminine-looking underpants and a syringe full of acid, a man whose own father had alerted the U.S. Embassy in Nigeria, a traveler whose ticket was paid for in cash and who didn’t check bags, whose visa renewal had been denied by the British, who had studied Arabic in Al Qaeda sanctuary Yemen, whose name was on a counterterrorism watch list, who can we catch?”

To that, I add: “If our elected representatives can’t overcome the Money Industry’s lobbyists and legislate a ban on speculation in derivatives, enact a cap on credit card interest rates and regulate the rating agencies after these evil-doers trashed our economy and after Congress saved them from bankruptcy by giving them trillions of taxpayer dollars, what can they do?”

Then there is health care reform, a seven decades-long fight for fairness and financial security that has ended up in an unprecedented gift to the very companies that are responsible for our ridiculously expensive and cruel system. “Congress is effectively making private insurers unnecessary, yet continuing to insist that we can’t do without them,” the New Yorker points out.

From any viewpoint, liberal or conservative, our government’s record over the last ten years is dismaying and alarming. First came 9/11, when the religious ideologues attacked our nation and we turned out to be defenseless against a bunch of amateurs even though the Pentagon, the intelligence agencies and the White House knew a catastrophic assault was in the works. It is an outrage that despite hundreds of trillions of taxpayer dollars spent on defense and weaponry, there were only a handful of fighter jets available to protect our homeland that day, and they were too late. Next came the free market ideologues who brought us the Mini-Depression of 2009 (We’re supposed to pretend it was a recession and that it's over but it wasn’t and it ain’t). There were plenty of warnings about the inevitable collapse of the Speculation Economy, but Congress, the White House and federal regulators all looked the other way.

What has been accomplished by the government’s efforts to protect us against foes foreign and domestic? After an almost unfathomably large expenditure of public resources by the government, not to mention considerable pain and suffering for the public, we seem to be right back to square one.

Which is of course why so many Americans have given up on health care reform.

The stakes are great for the Republic: once Americans lose confidence in government, Democracy itself is in danger. Restoring their trust will be the preeminent challenge of the next decade, which starts today.

Happy birthday bailout!

In a week, the nation will celebrate the one-year anniversary of Wall Street’s collapse.

For most, it won’t be a festive occasion. A whopping 16% of Americans able to work are unemployed or are working fewer hours than they want. Spending is way down because people are scared and many are unable to borrow – lines of credit have been slashed and credit card interest rates are skyrocketing. Since household spending amounts to at least 30% of the nation’s economic activity, this has had a devastating ripple effect on the economy.