"States rights" has been the divisive clarion call of the extreme right on social and civil rights issues for decades. But devolving power to the states doesn't have to be a bad thing. It can be what's known in policy circles as Progressive Federalism -- an ideology whereby "governors and activist state attorneys general [are allowed to] lead the way on environmental initiatives, consumer protection and other issues," as the New York Times reported in a piece about the Obama administration's support for the idea.
But in order for Progressive Federalism to happen, the federal government has to be supportive of floors, not ceilings -- that is, oriented toward setting minimum progressive regulatory standards that states must at least comply with, not maximum regulatory ceilings that states are not allowed to go above and beyond. And the problem is that the Democratic Party is split on that idea -- because Big Money hates it.
Case in point is the intensifying debate about Wall Street reform. During the era of deregulation, Washington policymakers passed statutes preempting (read: invalidating) many state laws that went further in regulating the banking industry than federal law. Now, a faction of Wall Street-funded "New Democrats" are trying to gut a White House proposal to change that paradigm and establish minimum floors of bank regulation that states can go beyond. According to the Wall Street Journal this Democratic congressional faction is trying to flip the proposal on its head by making the final product establish a federal ceiling whereby states cannot regulate banks any further:
Democrats are split over whether the proposal should allow states to trump federal regulations and enforce their own, often tougher consumer rules against national banks...This would permit states to bar certain fees and late charges otherwise allowed by federal regulators.
The White House proposal would create a new Consumer Financial Protection Agency with the power to write and enforce rules against a range of products. States would be allowed to write stricter rules than the CFPA, overturning existing policies under which national banks typically are immune from state regulation...Rep. Melissa Bean (D., Ill.) is preparing an amendment that would prevent states from enforcing tougher standards against national banks than the federal entity's.
It's self-evident that what Bean and the Wall Street-funded Democrats are trying to do has nothing to do with the "public good" and everything to do with political harlotry -- The New Democrats , after all, have proven to be the Best Little Whorehouse in Washington and this just proves that truth.
Indeed, the meltdown did not happen because there were too many regulators -- it happened because there weren't enough. So obviously, any "reform" bill that effectively takes more state cops off the beat isn't going to be real reform. Likewise, the Wall Street meltdown did not happen because regulatory agencies were going too far in policing the market -- it happened because those agencies weren't going far enough.
Thus, it's obvious why real "reform" should set minimum standards of progressive regulation, not maximum limits of such regulation, and even more obvious why that same reform should encourage (or at least permit) state regulatory institutions to go further than federal standards if their constituents (via their legislatures, etc.) want. But it is also obvious why Wall Street lobbyists and the lawmakers they have bought and paid for want to do the opposite: The more real reform becomes, the less speculative profiteering that will be allowed and hence the less six- and seven-figure lobbying contracts, and the less campaign contributions.
The good news is that, according to the Huffington Post, President Obama is sticking to his guns on this one:
President Barack Obama reaffirmed his commitment Friday to allowing states to adopt stronger consumer protection measures than the federal government when it comes to financial products like credit cards and mortgages.
In a meeting at the White House, Obama told a group of state attorneys general and consumers that he was still committed to the idea. He didn't mention it, though, during his public remarks.Over the last several years many states have adopted tough pro-consumer laws governing predatory lending, bank fees, interest rates and late charges, only to be told by federal regulators that their laws can't be applied to national banks such as Bank of America, Citibank, J.P. Morgan Chase and Wells Fargo.
If anyone understands the value of Progressive Federalism, it should be President Obama, considering most of his political experience comes from the Illinois state legislature. So this stand is definitely grounded in his own history.
Certainly, I hope he goes public with his stance -- and based on the White House's willingness to issue its first veto threat over the reform package, I'm optimistic that he will if the Wall Street Democrats are successful in trying to destroy reform (the vote on Bean's amendment is probably going to happen in the House Financial Services Committee this week). This is a fundamental, baseline issue rooted in common sense: "If a state wants to provide for its citizens' stronger consumer protections, it ought to be able to do so," as Obama's Deputy Treasury Secretary Neal Wolin told reporters.
Make no mistake about it: This fight over state and federal policy isn't limited to Wall Street. States, as the old cliche goes, are the laboratories of democracy. You can see that truth in financial reform and even in in the debate over health care: The Progressive States Network has organized a letter to Congress signed by more than 1,000 state legislators demanding real reform, and a leading proposal before Congress would allow states to administer their own public plan options.
The point here is not to inherently value state regulation over federal regulation or vice versa, but to make sure the two reinforce each other. To get that kind of Progressive Federalism on every issue will, again, require floors not ceilings.
The only use that business has for the Democrats: when they see a popular movement like health care reform heading their way, they rely on the Democrats to get out in front of it and stop it.
All these clever formulas and mandates amount to just that: getting out in front, lowering expectations, and making us settle for what the industry is willing to give.
Health care reform, when it comes, will require a mass mobilization of Americans demanding the right of everyone to sign up for Medicare. It needs to be framed as a moral issue. It is not right for people to die, suffer needlessly, and/or go bankrupt because they can't afford to pay for health care.
Are we the land of the free, or the land of 'you can't afford it'?
Moreover why don't we take a few simple back steps into the stable past and reinstate the Glass Steagal Act, outlaw Credit Default Swaps, and open the Federal Reserve to audit. It would be nice to know if Americans or foreigners OWN the USA!
A graphical site by the government showing a pie of GDP 20% defense, 20% Health Care, and % interest on dept! A graph to show ownership of dept, Who OWNS The USA!
Finally USA Today did a nice job with a story of how many barrels of oil it took to by The USA. The story showed the difference in Clintons strong dollar and Bushs weak dollar. Graph that over a time line to enlightening to the public as well.
Not a Ross Perrot fan but maybe he was right about the graphs. Hell even Ronald Reagan was right once Trust but Verify.
Above all make it submissive to the real economy, jobs, national industrial/trade/labor policy. Trade policy treaties become laws we honor while others use against us and ignore at the same time. Pull out and start over.
It's more fun when it's done right!
Tom J. Flaherty
http://www.huffingtonpost.com/miles-mogulescu/america-stan-the-progress_b_31630.html
Progressive federalism allows the Federal government to set basic floors on all the states, but also allows the states to experiment with stronger regulation. This could be in the form of the Kucinich amendment which would allow states to experiment with their own single payer health systems. It comes in the form of living wage laws in which cities and states require contractors doing business with the government to pay more than the Federal minimum wage. It comes in states like California which have stronger vehicle emissions laws than the minimums required by the Feds. Or it could come in the form of stronger banking regulations than the Obama administration and its Wall Street advisors are willing to allow.
Living wage laws don't require any additional federal authority just political will. I expect CA will be heading that way.
CA's Additive clean air act authority has let the feds ignore the added impacts of failing to regulate shipping trains and airplane emissions as there was only state accountability for emissions reductions to meet air basin req's. Likewise the regulated community fails to understand that the large regulations adopted are actually invisible federal mandates via SIP compliance needs puting the political heat on local politicians not the federal government.
Finally we are a free trade nation and supply side economics provided the free cash to move offshore, pure supply side regulatory structures with weak subject to administrative whim labor and environmental enforcement provisions often unenforced provided the unlevel playing field that made it more profitable to take the money offshore. Which also added to CA's air problems being the major pacific seaports.
If you want to undo the constitution granting commerce caluse authority to states to do more you would absoutely need to change trade policy to protect the american worker.
In order to do business with customers in a particular State, a bank would be subject to the prevailing laws of:
(a) The State in which the bank is incorporated;
(b) The State in which the customer resides;
(c) The State in which the other party to any transaction resides;
(d) The Federal Government ...
... whichever regulation is most STRINGENT in any particular case.
What we have right now is a status-quo under which "State law" effectively does not exist. But the 10th Amendment to our Constitution makes it quite clear that the Framer's intent was precisely the opposite: "any prerogative not expressly claimed here is reserved to the States."
Banking regulation has been promulgated on the right "to coin money and to regulate the power thereof," although quite obviously "regulating banks" and "coining money" are not the same thing at all.
It has also been based on the "interstate commerce" clause. Clearly, the Framers knew that the States would be trading with one another, and yet they penned Amendment 10.
Any serious effort to restore rule by the people would HAVE to be campaign reform.
It might take an amendment because the big money will never let our (their ?) politicians pass it,
The beauty of the Internet would make it much easier to get signatures than ever in our history.
If we could get people like Bill Moyers, Dylan Ratigan, Keith Olberman, Ed Shultz and their counterparts on the right to back say an amendment, we could do it. What citizen would not sign a petition to stop corruption? Then we can say we are taking our country back.
"You work three jobs?... Uniquely American, isn't it? I mean, that is fantastic that you're doing that."-- George W. Bush, to a divorced mother of three, 2/4/05.
Article 2, Section 4 of our Constitution lists "treason" and "B-R-I-B-E-R-Y" side by side in one brief sentence.
"BRIBERY" is the correct word here, not "campaign finance" and not "lobbying."
To quote Wikipedia's definition: "Bribery, a form of pecuniary corruption, is an act implying money or gift given that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as 'the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in discharge of a public or legal duty.' The bribe is the gift bestowed to influence the recipient's conduct. It may be any money, good, right in action, property, preferment, privilege, emolument, object of value, advantage, or merely a promise or undertaking to induce or influence the action, vote, or influence of a person in an official or public capacity."
'Nuff said.
It is clear that K-Street bribers are at least SOMEWHAT worried about public backlash against their system, because there is a move afoot right now for the $$ $upreme $$ Court $$ to issue a Deci$ion that, "Lo and behold, (it's not bribery) ... it's Freedom of $peech! Corporation$ are really Citizen$, and they have a right to Freedom of $peech!"
The Framers of our Constitution must have paid a lot for that one piece of vellum, because they made every single handwritten word that they wrote upon it "COUNT." They gave us all the legal firepower that may be needed to expunge these moneychangers from our Temple.
This would act to regulate the pace of change as if you say take CA's current debate on Big Screen TV's the economic impacts of the measure will be finite but additive to federal standards as they become the norm.
On the other hand statewide GHG regulations will be permanent and always increase the cost of state compliance beyond federal limiting how far any state could economically disasvantage the US under any such regulatory scheme providing a boundary for negative impacts to the economy, limitations on carbon credits available or negative cost impacts on communities. Environmental justice advocates are after all the first to file suit on AB 32.
The minimum standards should of course get set at a level that achieves federal policy goals while the maximum hinges off the commerce clause of the US constituion and maximum negative impact to US economy a state can inflict of it's own volition to move a policy ball forward.
This would encourage states to focus on technology forcing activities and more narrow improvements vs wholesale creation of additive regulatory schemes mirroring federal programs.