Earlier today, Jane Hamsher wrote a piece entitled "Big Banks: Unions Stopped Fighting, and the Entire Left Got Punched" in which she said that unions hadn't lead the way on the financial reform fight out of fear of upsetting the Administration. As someone who works heavily with both unions and other financial reform players in D.C., I don't feel this is quite an accurate description.
Sure, there might have been some degree of hesitancy in the early days of the Administration. However, as someone who was heavily involved in the formation of Americans for Financial Reform, the bigger issue appeared to not be the "veal pen" syndrome effect, but larger institutional inertia.
Financial reform is a complex issue that is the bastard son issue of the progressive movement that we all struggle to understand because of its complexities. Most of the resources and attention from big progressive organizations were focused on health care or climate change. I would argue that many progressive bloggers also failed to give the financial reform debate proper attention because they simply could not understand It due to how complex and boring of a subject it is to write about. Bloggers, like DC organizations, tend to go where the excitement was and it wasn't in understanding rewriting resolution authority rules, credit rating agencies, or creating exchanges for credit derivative swaps.
If an organization or a union had a staffer working on financial issues, that staffer was typically splitting their time between other economic issues like trade, stimulus, etc like I was. Some unions hoping to get even more involved in the fight even released their retirement fund managers to work on the issue, giving them crash courses in Capitol Hill politics. Other organizations took labor guys like me with BA's in economics and gave us crash courses in financial regulation. There were simply just not enough qualified, available staff to work on this issue and there still isn't enough. We were rushing into the breach to take on bank lobbyists who outnumber us by a ratio of 30 to 1.
As National Community Reinvestment President John Taylor, a thirty year veteran of financial reform fights described it:
"It's like being in a street fight, and you and a few friends just went up against 100 other people, and you're just picking yourself up off the ground. And you're just bloodied."
Most staffers were fighting overwhelming odds against the big banks with very few resources and little coordination between other organizations. When Americans for Financial Reform came together last May, it allowed organizations to pool their resources and fight much more effectively. It was one of the most impressive efforts most organizers had ever seen, with dozens of organizations that can rarely agree on anything coming together in a month to draft 87 pages of in depth position papers. The unions played a key role in leading this effort, with most of the meetings being at AFL CIO and SEIU headquarters
Since then, the unions have lead the way, organizing and providing the ground troops for the Showdown in Chicago and other actions against the banks across the country. Damon Silvers, the brilliant Director of Policy at the AFL CIO, is the Deputy Chairman of the Congressional Oversight Panel on TARP that Elizabeth Warren chairs. He is one of the leading voices on financial reform often fiercely critical of the Administration. In a must see debate on financial reform earlier this year, the AFL CIO's Damon Silvers slammed the American Banking Association President Ed Yingling to the point of embarrassment. (Go here and see the debate, it was incredible!).
As someone who sat in the war room as we counted the votes on the Consumer Financial Protection Agency (CFPA), it looked dubious that the CFPA was going to make it out of the House. It did pass the House, and I can tell you without a doubt that the CFPA would have never passed the House had it not been for the tireless efforts of local labor leaders to counter the political clout of community bankers in member's districts.
Finally, when Barney Frank released "too big to fail" legislation that was deemed "TARP on Steroids", it was AFL CIO President Richard Trumka, the lone voice of financial reform, who sat a table full of Big Banks CEO's in front of the House Financial Services Committee and testified against it. He characterized the plan by saying:
It appears to take the most problematic and unpopular aspects of the TARP and makes them the model for permanent legislation.
It was a historical event; no AFL CIO President in its history had even gone to testify against financial legislation. Not George Meany or Lance Kirkland who were far more interested in fighting Communists overseas than they were in fighting big banks, or employers, for that matter. For students of labor history, it was a sea change moment, a red letter day in the history of organized labor. AFL CIO President Richard Trumka has been the leading voice of the progressive movement on these issues, twisting the arms of Democrats behind the scenes to get them to push for tougher financial reform legislation.
While, I agree with Jane Hamsher's general sentiment that there has been an incredible lack of voices and attention on financial reform by the progressive movements -- blame equally shared by progressive bloggers -- I do not agree that it is the fault of organized labor. To say that the unions haven't been leading the fight is a mischaracterization of the historical role organized labor has played in this fight.