The Untold Daschle Story: The Blacklisting of Progressive Economics

Amid the swirling headlines about Tom Daschle withdrawing his nomination for Health and Human Service Secretary is a very dark, very foreboding story that tells us a lot more about what to expect from the Obama administration than a single nomination fight. It is a story that every single voter who supported Barack Obama because of his progressive economic platform should know about -- and worry about.

As every newspaper in America has been happy to report, Daschle worked with venture capitalist Leo Hindery after he left the Senate. Hindery was a top economic adviser to John Edwards and later to Barack Obama, and many had floated his name for U.S. Trade Representative or Commerce Secretary. Now, though, that won't be happening, as anyone mentioned near the Daschle flap is being shunned by the Obama administration.

But is that really why someone as accomplished as Hindery was never seriously considered for a top economic post in the administration? The media and the Obama administration would like us to believe yes -- but the answer is no. It has far less to do with the Daschle situation and far more to do with Hindery's progressive economic ideology.

Buried in a Politico dispatch, we get the real story:

Hindery did his best to carve out his own public profile, with generous contributions to a range of Democratic-leaning organizations and a 2005 book, "It Takes a CEO," decrying outsourcing, Wal-Mart, and "an ethical and aesthetic 'race to the bottom'" in the media industry.

He also hoped to land a job in the Obama administration, and he had a close Obama adviser -- Daschle -- in his corner, the two Democrats said. United Steeelworkers union officials also backed him.

But while Hindery complained that he "waited for the phone to ring," a source said, "Obama's aides appear never to have taken his bid seriously. One possible source of friction: Hindery had set himself up in opposition to Obama's top economic advisors, many of whom were associated with The Hamilton Project, an economic think tank that was the inheritor of former Treasury Secretary Rubin's generally pro-trade position.

In the same story, of course, we get hedge fund shark Steve Rattner -- a huge Democratic fundraiser on Wall Street -- bashing Hindery for backing populist Democratic candidates for local and national office.

And that's the big story here: Leo Hindery, one of the few business leaders to use his wealth to challenge deregulation, corporate trade deals and anti-worker policies was blacklisted by the Obama administration well before the Daschle flap ever happened -- and he was blacklisted because he dared to clash with the same Wall Street Democrats whose corporate-backed policies destroyed the economy.

You can say this is just theory -- just a single example. But that's willful ignorance, as the Hindery scalping is only one chapter in what has been one long narrative arc whereby economic progressives have been deliberately shut out of top administration jobs. Just step back and think about it for a minute: Amid a stable of eminently qualified and well-respected progressives like James Galbraith, Joseph Stiglitz, Robert Reich, Paul Krugman and Larry Mishel, Obama has chosen Rubin sycophants like Larry Summers and Tim Geithner to run the economy -- the same Larry Summers who pushed the repeal of the Glass-Steagal Act, the same Geithner who masterminded the kleptocratic bank bailout, the same duo whose claim to fame is their personal connections to Rubin, a disgraced Citigroup executive at the center of the current meltdown. And the list of Rubin sycophants keeps getting longer, from Peter Orszag to Jason Furman.

As the Nation's Chris Hayes shows, its the same in other key regulatory positions, as free market fundamentalists who created the problem take the helm of the regulatory agencies they tried to destroy. Indeed, the only movement progressive in a top economic position is Jared Bernstein, and he was relegated to an amorphous job in the vice president's office.

And now we see that's not an accident. Though Obama won states like Ohio, Pennsylvania and Indiana on promises to challenge Wall Street and reform our trade policies, there has been a deliberate and calculated effort to stack the administration with the very Wall Street Democrats who created the problems he lamented, and shun those who have been fighting the good fight.

Comments

[army193]

What happens when one makes a mistake based on there belief and see that it was wrong? Who would you ask to make the corrections?

[ProudLiberalDan]

What we are seeing the same wimpy DLC-triangulation we would have seen out of Bill Clinton's 3rd term.

However, I am not surprised because this was always the hollow substance behind "new politics".

So many progressives were co-opted by style, they totally forgot to pay attention to substance.

[Doofus]

Must remember that the worst part of having a lot of Demos in Congress
is that they appear to spend much time wandering around aimlessly,
just bumping into each other. Pick a direction, start moving that way.

[Shortyfuse]

I JUST HATE THAT CORPORATE MEDIA IS PICKING OFF THE MOST LIBERAL DEMOCRATS ( LIKE CAROLINE KENNEDY} AND I REALLY HATE THAT OBAMA DOES NOT SEEM TO WANT TO COMBAT IT. INSTEAD IS IS JUST HAPPY TO HAVE CORPORATE WHORES IN HIS ADMINISTRATION. I MEAN , CAROLINE KENNEDY, ANY EFFORT AT ALL ON HIS PART COULD HAVE ENSURED HER NOMINATION. INSTEAD WE ARE STUCK WITH A WOLF IN SHEEP CLOTHING. BUT I GUESS THAT IS OK WITH HIS DAMN "CAN'T WE ALL JUST GET ALONG" ATTITUDE.

[ProudLiberalDan]

Please turn off the "Caps Lock" key. That makes is seem like shouting and most people won't read it.

However, you make a good point. "New politics" is really just a rebranding of the same old wimpy DLC-triangulation we could have seen under Bill Clinton.

[larmarch5]

You know, it almost feels like Hillary won.

[Alvin4NY]

I've heard so many people say this.....

[Deparis]

The only way we will ever get real change in this country is by taking our cues from the French and Greeks. Only a no nonsense people attitude will shake the core of the status quo.

[exoevolution]

Excellent piece David.

If we PROGRESSIVES blow our opportunity NOW to swing the pendulum back from decades of CONSERVATI­VE/CORPORA­TE rule then the Obama presidency will be a total FAILURE!

For too long the Conservative Movement has fought hard to CONSERVE "their" power!

This is OUR time to PROGRESS the agenda for "we the people".

President Obama be bold, be PROGRESSIVE!

[ProudLiberalDan]

When has Obama been progressive? He had the weakest health care platform of all the Democrats running for the nomination? He had a great style, but his substance was always DLC to the bone, which we are witnessing now.

Instead of expecting Obama to suddenly become a progressive champion, we need to advocate on our own to the Democrats in Congress. They have large majorities and they should use them. If we had a Senate Majority Leader willing to play hardball we'd easily get 1 or 2 Republicans to refuse to join each fillibuster. Congress is a co-equal branch of government. Instead of hoping against hope that Obama will suddenly change, it is better for us to advocate on our own behalf. Our loyalty should be towards the principles we hold dear, not the personality of an elected politician.

[mjc]

Was wondering when someone was going to step up and tell it like it is in re some of Obama's appointments. Have never been a fan of Daschle, probably mainly because of the way he trashed Hillary Clinton. But couldn't for the life of me figure out why Obama failed to heed the remarks of Paul Krugman who has some great credentials and greater ideas for solving the economic crisis. But some columnist did point out that the reason Geithner wasn't attacked for his failing to pay his taxes was that Wall Street loves him. During his campaign Obama used to pitch the poop that he was funded by lobbyist, his campaign championed that of the average American, etcetera. But there was evidence clear as a bell that Fanny and Freddy counselors were supporting their guy, Obama, and the media never bothered to look too closely. Even if there is a war between free traders and regulators, Daschle looks like someone that could really carry health care along brilliantly. Not having either the balls to tell Obama, and he was a great friend supposedly, or the vetting team not understanding what was going on may be an excuse. Being a bit paranoid I wonder if universal health care is just another smoke screen for Obama and will never be allowed...­.that's the word....to come to fruition because it is the one benefit that would NOT depend on employers and might make Americans more empowered and less dependent on BUSINESS.

[bayside]

I feel the same way David. It would seem he only wanted progressives votes, not their policies and not real change....­He is becoming a lieberman dem..

[PATina]

For someone who was supposed to bring ALL sides to the table... the progressive side is disproportionately light. And maybe that will work to our advantage. After we give try the whole "trickle down", supply-side, tax cuts one more try... things will be so bad that hard core conservatives will become Progressives.

[chocolatecity]

Wow David. As I recall the economy in the '90s was pretty good. I must have dreamed all of the small business opening, and all of the financial aide and grants sending me and my friends to college. Was it Rubin's fault that the SEC, Bush's Treasury Dept., and Congress failed on their oversight responsibilities over the past eight years. Was Emmanuel responsible for the idiotic mark to market rules. The truth is that there is blame to go around. But Sirota constantly blaming Rubin and Co. for ALL of the problems we have now is getting irritating. I like Chris Dodd, but he looked right into the camera last summer and swore Fannie and Freddy were fine. Bill Clinton tried to push changes to both institutions, but democrats in congress told him to back off. But the real folks to blame are those responsible for oversight. We have laws on the books that would have prevented this if anyone had been paying attention. The DOJ should have been all over mortgage brokers making fraudulent loans. Bernie Madoff was not able to pull his stunt off because it was legal, but because no one was minding the store. Sirota obviously hated the Clinton Administration and has decided to make them the scapegoats for our economic ills. Instead of lining up Bush and his cronies along the wall, Sirota would rather form a circular firing squad around democrats that he does not deem progressive enough.

[RoloTomassi]

Ah, methinks you're projecting a bit, and perhaps unconsciously; maybe you miss this from the article above:

"...Obama has chosen Rubin sycophants like Larry Summers and Tim Geithner to run the economy -- the same Larry Summers who pushed the repeal of the Glass-Steagal Act..."

There is little question that the repeal of Glass-Steagal was a major component in all that has gone wrong on Wall St.

But I am still guardedly optimistic; perhaps Obama is more of a strategist than these selections woud imply--it's not likely, but perhaps he anticipated these appointment problems, and will work in true progressives at a later date [but that seems like wishful thinking even as I type it].

The presence of all of these Free Market Fundies is very troubling to me, and I am still fighting off the creeping notion that these finanical feudalists will really in there to assure that nothing significant changes.

[Halsey]

coco..mayb­e Sirota does "hate" the Clintons..­but never forget this..it was UNDER Bill C.'s watch..tha­t Glass-Stegall was bulldozed.­..clearing the path for investment banks to...well.­.do their thing with little regulation­..of COURSE...B­ush was asleep at the wheel...du­h..and deserves most of the blame...(t­he buck stops here kinda thing)..bu­t..if Bill and Hillary had not been so enamoured with the Rubins of the world...we­ll...here we are...brok­e and broken.

I don't like that Obama has ANYTHING to do with Rubin..yes­..very very disappoint­ing...but have to say abut Daschel...­.glad HE's out!...Sou­th Daktoa....­paid farms a LOT for ethanol in place of food grain...sh­ort-sighte­d..and What? over $150,000 in unpaid taxes...my GOD..we little people..we­ll#1..woul­d never make enough to owe that much...but come on..this was NOT an oversight.­.this was cheating..­.out with the whole damn lot....

[Doofus]

'Amid a stable of eminently qualified and well-respected progressives like James Galbraith, Joseph Stiglitz, Robert Reich, Paul Krugman and Larry Mishel, Obama has chosen Rubin sycophants like Larry Summers and Tim Geithner to run the economy'..­.

You totally forgot Austan Goolsbee!

It's not so much a blacklisting as it is a feud. Obama's economists (including Goolsbee
and others) are Chicago School Friedmanites, or Neo-Keynesians (or even Neo-Fried-
manites), who happen to share many views with their Repo brethren coincidentally.
The feud however is with the more classical Keynesians, like Krugman, and involves
big time economists.

[elmoor]

I hope Dems are very happy with themselves. Who needs the Republicans to sink President Obama when we have each other?

Jeez... won't we ever learn.

[RJII]

here, here

[LRM216]

You know, it's not even about republicans vs. democrats. I think more and more of the public is beginning to see it's really more about politicians vs. the people.

[Doofus]

Quite true. Some more effective House & Senate leadership is needed.
Hard-asses like LBJ, when he was Senate majority leader, or Speakers
Sam Rayburn or Tip O'Neill would have exercised more authority for sure.
Too many chiefs, not enough indians.

[LauraNo]

Oh, and also, who said you were guaranteed to get progressives wherever you want them? I voted for a guy who seems pretty pragmatic. I hope he is.

[111]

Obama told everyone during his campaign that he was a friend of free trade. It is what I expected.

Glenn Greenwald referred to an article written about Daschle's move to the firm as Bob Dole, saying this is how Washington works -

http://www.washingtonpost.com/wp-dyn/articles/A32604-2005Mar13.html

" Dole said the Democrat would be a valuable asset to the firm even though Congress is run by the GOP these days.
"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.
Others who recently made the switch include John Breaux, former Democratic senator from Louisiana who became a senior counsel at Patton Boggs, and W.J. "Billy" Tauzin (R-La.), former chairman of the House Committee on Energy and Commerce who is the new head of the Pharmaceutical Research and Manufacturers of America."

I was surprised by something I read in wiki about Geithner
http://en.wikipedia.org/wiki/Timothy_F._Geithner

"His father, Peter F. Geithner, ... During the early 1980s, ... oversaw the Ford Foundation's microfinance programs in Indonesia being developed by Ann Dunham-Soetoro, mother of President Barack Obama, and they met in person at least once."

Timothy's father and Barak's mother had a professional relationship ... don't know if that means anything, but I was surprised.

[noamjunior]

This economic crisis happened because while wall street made a multi-billion dollar deals trading worthless credit default swaps, the Bush administration did absolutely nothing to regulate or investigate. Blaming some Clinton appointees from the 90's just plays into the false neo-con narrative.

[WeTellTheTruth]

You probably expect accountability from government­..........­..?:

But you dont want accountability from yourself and Democrats.­.....?

Read it........­..

"It was Summers who worked in cahoots with Enron and banking lobbyists, and who backed Republican Sen. Phil Gramm’s Commodity Futures Modernization Act, which banned any effective government regulation of the newly unleashed derivatives market".
"It was Summers who most vehemently pushed for congressional passage of that drastic deregulation measure, the Financial Services Modernization Act, which eliminated the New Deal barriers against mergers of commercial and investment banks as well as insurance companies and stockbrokers".
Quotes from TRUTHDIG

Obama has chosen to take sides with the BANKERS...­...... Instead of American people