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Ride the Populist Wave: Restore Glass-Steagall!

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Democrats should realize, by this point, that they're going to have to reposition themselves a bit if they stand any chance in next year's midterm congressional elections. Fortunately for them, there are two issues out there just begging for exploitation. The first is the Republican Party, who has reportedly decided they are going to run next year on taking something away from voters which Democrats have given them -- the healthcare reform bill. And the second is a little-noted bill introduced a few weeks ago by Senators Maria Cantwell (D-WA), John McCain (R-AZ), and Russ Feingold (D-WI), which would bring back a chunk of the banking regulations passed in the Great Depression known as "Glass-Steagall." Together, these two issues present an opportunity for Democrats to reap some of the populist anger brewing out there in the electorate.

Not that it's going to be easy to do so. The Republicans, after all, are reacting to a movement (the Tea Partiers) which is routinely labelled "populist" itself. But there is populism and then there is populism. After all, both Barack Obama and Sarah Palin -- for very differing reasons -- were called "populist" by the media at one time or another during last year's campaign. Populism is not so much a political stance (as "conservatism" is, for instance) as it is a political tactic. Meaning it can be used equally well by either side of our current American political divide.

Democrats like to think of themselves as the ideological heirs to the capital-P historical Populism from a century ago. Democrats consider themselves the "party of the common man," but this routine and facile assumption ignores the "anti-bailout" anger in play today -- where Democrats are seen as helping out Wall Street and largely ignoring Main Street. Republicans, on the other hand, see themselves as bringing populism into the modern age, in the form of social conservatives and hot-button issues like gay rights or abortion.

Populism, even back in its beginnings, has always had a rather nasty edge to it. Because populists aren't usually "for" things, as much as they are "against" other things. Historically, one of the main targets of Populism was one which strikes a familiar chord today: elitist Northeastern bankers. Wall Street, in other words. This makes it a good fit for the times, since Wall Street is not exactly beloved right now. Of course, a hundred years ago, this also had an ugly side, as many conflated "elitist bankers" with "Jews." This type of bigotry has been (so far, and as far as I know) thankfully absent from the populist wave building out there -- but there have been plenty of more modern examples of such idiocy as well (such as Auschwitz photos of dead bodies waved at Tea Parties, for instance).

But populism, just because it attracts some rather scary fringe elements to it, should not be ignored by Democrats who feel they can just coast on the coattails of the image of the "common man" Democratic Party in voters' minds. Voters are notoriously short of memory, and are much more likely to be demanding of Democratic officeholders: "What have you done for me lately?"

Democrats need to get out front on this. If the healthcare bill that the president signs is the best that could have passed Congress, then you're going to have to defend it forcefully out on the campaign trail next year. Rather than focusing on the "might-have-beens" in the bill, Democrats need to loudly proclaim the good things it contains. Meanwhile, Republicans are going to paint themselves in a corner by campaigning on repealing whatever passes. Because while there is indeed a lengthy list of "might-have-beens" which did not make it into the bill, there are also a lot of very good reforms of the health insurance industry in there as well, and once voters get used to having these reforms, they're not going to like politicians promising to take such things away.

One of the worst things about the bill hasn't seemed to arouse much Republican ire yet (although it has raised a lot of ire from both Independents and some Democrats) -- the individual mandate. But Republicans are building steam on the issue, so Democrats should expect it to be used against them. The individual mandate isn't going to be easy for Democrats to tout as a wonderful thing, to twentysomethings who don't want to buy health insurance. But pretty much everything else in the bill can be proclaimed as a good deal for voters -- if Democrats would only make the case for them.

Picture a Democratic candidate at a debate next year with a Republican opponent. Here's how they could make their case:

"My opponent wants to repeal the historic healthcare act President Obama signed early this year. This means he is against laws which end the insurance industry's ability to deny you coverage -- yes, you! -- for 'pre-existing conditions.' He wants insurance companies to be able to deny you the benefits you have paid for, by going back to the days when some insurance company bureaucrat could decide that they weren't going to pay for your daughter's treatment when she gets leukemia. He wants to go back to the days when insurance companies could tell you 'well, we've spent a million bucks on your operation, now we're going to stop paying for you at all... oh, and by the way, you're uninsurable for the rest of your life.' My opponent stands against all these things, because he is more in tune with the insurance industry's future earnings than he is concerned about the voters of this great state being able to get health insurance without having to face bankruptcy. Make no mistake about it, when he calls for repealing the healthcare reform act, that is exactly what he stands for."

Of course, the negotiations between Nancy Pelosi and Harry Reid on the final bill could help this a lot by front-loading a bunch of the goodies in the healthcare bill so that they take effect right away, instead of in 2013 or 2014. Democrats are going to require some very tangible benefits that voters can already see, or else it's going to be a much harder sell.

And, while it has more than a hint of "too little, too late," the White House -- and Democrats in general -- have done a fairly good job of getting out in front of this, for the past two weeks or so. They have been on a real media blitz, trying to shape the story as "historic reform," and if they keep it up they can indeed make inroads with voters who have not been paying much attention to the details of the healthcare debate until now. President Obama seems to be leaning on two lines in particular. The first is about the bill, and about his own legacy: "I got 90-95 percent of what I wanted." While this is hard to argue (since he never laid out exactly what he wanted in any sort of detailed fashion, it's impossible to fact-check), it does move the focus back to the good things in the bill which the media has largely been ignoring all year long. The second line the president is using is all about his legacy: "Seven presidents have tried this, and seven presidents have failed." This points out the magnitude of the political victory, which may help Obama himself, but will only help Congresscritters campaign on the broader theme of: "Democrats are getting things done, Republicans only know how to say no."

But Democrats need a better issue for next year, because believe it or not, healthcare reform is not going to be the biggest issue in the election. Voters are more forward-looking, and will be concentrating on other things as well. Such as jobs and the economy. But while Democrats may pass some sort of window-dressing bill to stimulate both the economy and hiring, there simply is no magic lever they can pull (on Capitol Hill or in the Oval Office) to create jobs. The economy will do what it will -- recover, stay flat, or go down again -- and Democrats will either pay the price or reap the rewards, accordingly.

But they'll have a much better chance, no matter where the economy is, if they're out there fighting the good fight. Which is where Cantwell-McCain-Feingold comes in. It is tailor-made for the anti-Wall-Street rage out there. What it does, in a nutshell, is to move us back a decade. During the Great Depression, regulating banks was all the rage. One of the biggest regulations passed back then was the "Glass-Steagall Act" of 1933 (passed during F.D.R.'s first year in office), which forbade the intermingling of banking and investment firms. This law stayed in place until the 1999, when it was essentially overturned by the Gramm-Leach-Bliley Act. This was a modern age, it was argued, and we needed to modernize banking for the 21st century. That old-fashioned Glass-Steagall Act was getting in the way of making lots of money and bringing joy to all. Gramm-Leach-Bliley passed with overwhelming majorities in Congress, and there are plenty of politicians around today (from both parties) who sang its praises back then. What happened, instead of joy-for-all, was a free-for-all -- Wall Street taking a decade to "party like it's 1999." And we've all seen the results of that.

Cantwell-McCain-Feingold would change things back. The bankers are already marshalling their forces against it. Which makes it a perfect political issue to jump on -- because, these days, if Wall Street is against it, then almost by definition it must be good. Sure, that oversimplifies things, but the bill itself is pretty simple (the entire text of the legislation itself is about a page and a half long). It even has bipartisan support, to a certain extent.

Democrats need to pick an issue that is seen in the public's eye as a full frontal attack on Wall Street excess. This bill is absolutely made to fit. "Glass-Steagall was good enough to get our country through the last century, and it is a lot better than the deregulated mess which followed its repeal. Big banks hate the idea, which is another reason I am strongly for Cantwell-McCain-Feingold. Bring back Glass-Steagall!"

Any wave leaves you with two choices: ride with and "surf" the wave, allowing it to buoy you up and carry you far; or have it come crashing down over your head. Democrats are facing a populist wave in the electorate next year. If they realize it, and start acting like they're responding to it, then they have a chance in next year's election. The two issues I've named are only examples of how to do so -- there are other issues out there, which could work out even better politically. Democrats would be a lot better positioned next year if they were seen as donning their armor, mounting their chargers, taking up a lance, and heading full-tilt at Wall Street. But if Democrats ignore the growing Wall Street/Main Street rage and continue to be seen as carrying the water for Wall Street while completely ignoring Main Street's concerns, then they are going to get swamped by this particular political wave.

 

[Note: The Cantwell-McCain-Feingold bill can be seen, with full details, at the Library of Congress' THOMAS site. The site does not retain search links, so you have to go to their main page and click on "Search by bill number" and enter "S2886" to see it. There is a similar bill in the House as well, which you can see by searching for "HR4375", or you can read a good article on the issues involved from Bloomberg.]

 

Chris Weigant blogs at: ChrisWeigant.com

Follow Chris on Twitter: @ChrisWeigant

 

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