Arianna Huffington's spot-on post yesterday about our country's broken financial system led with the sentence "The window for reform is closing." Which is word for word what Elizabeth Warren said to me in a conversation we had a few days ago. For all of the incredible power Goldman Sachs and JP Morgan Chase have, their Achilles heel is momentarily exposed because of the incredibly anger the American public justifiably has at them right now, and there is a window for at least some progress on this.
There is, ironically, another reason for urgency as well: as Arianna and I and others have noted in multiple articles in recent weeks, the big Wall St. traders are back to their old tricks, business as usual pure and simple. And those tricks are exactly what brought down our financial system over the last couple of years. With our economy in such fragile shape, their recklessness endangers us greatly. I've heard people say that if we don't fix the problem, we could be in danger of another financial meltdown 10 or 20 years from now, but that way understates the problem. With our economy as weak as it is, we could see another financial crisis next year, not 10 or 20 years from now.
The remarkable thing about all this is that the reforms the White House has proposed are so modest. The Consumer Financial Protection Agency is a commonsense, reasonable proposal that even the Republicans I know from the financial industry think makes perfect sense. For an old lefty populist like myself, I don't think it goes nearly far enough. But even this moderate policy is running into a violent assault by Goldman Sachs, JP Morgan Chase, and the American Bankers Association. If something this reasonable is opposed by these guys, it's a sign of how far out on the ledge these companies have gone in pursuit of making billions by unregulated gambling and chicanery.
The window is closing on financial reform, and the window is closing on health care reform. These are easily the biggest political tests of Obama's presidency, those that will determine whether his presidency is going to be a success. A president can come back politically from early failures on big issues, as Bill Clinton did, but if they lose the big early battles, they generally don't try to do anything big or ambitious again.
I wrote in my book The Progressive Revolution about how the pattern of American history is that every so often, the window to create big change comes open for a while, that the combination of crisis, leadership, and political movement make it possible to really make big positive changes in our country. That window is open right now, and President Obama, to his credit, is trying to keep it open by doing some big and important things. But if he gives up the fight and caves in to special interest lobbyists, or if Democrats in Congress don't back his play, or if the reform movements on these big issues can't deliver grassroots strength, then the window will slam shut. That would be an immense tragedy, because this country desperately needs some big changes, and because the Republican opposition to Obama is going down such a dark path.
This country has been very lucky for much of its history. But if we can't fight through the special interest muck and deliver big change soon, I fear that our luck could run out. The economic and political storm are gathering in the sky, and we can't afford to do nothing to change the dynamics.
SEC Commissioner Elisse B. Walter and SEC Commissioner Luis A. Aguilar held meetings with members of the Committee for the Fiduciary Standard at the SEC’s offices in Washington DC on July 29. The Committee also briefed Congressional staffers and a Treasury official.
More below:
http://www.wealthmanagerweb.com/News/2009/7/Pages/Five-Core-Fiduciary-Principles-Attract-SEC-and-Treasury-Interest.aspx
In Obama’s case, he seems to be captive to the ideas that lasting change cannot occur without preexisting consensus, that America is too large to change except by slow increments, and that separation of powers means that Congress must always initiate change. Obama does not appear to have ever reflected that these assumptions may simply not be true, and may be as doomed to baffled failure as his predecessor.
you want to call it. To a large extent, it's Congress's responsibility to
'take the ball & run with it'. Would you suppose that Mr Obama would
be unable to apply his considerable charisma to motivate Congress to
do as he wishes? Can they ignore his irresistible charms? Perhaps so.
'separation of powers means that Congress must always initiate change',
because the President doesn't (even) get to propose legislation; he can
only 'suggest'.
One of the maneuvers Congress can perform is to 'imply' that a President
is weak, inexperienced (that would be Mitch McConnell), insufficiently
charismatic, or whatever, and therefore ok to ignore. FDR went around that,
as did JFK. LBJ had enough on Congress that they didn't even try. But it's
going to be up to the People, ultimately, to see that Congress understands
that they are expected to adhere to the President's 'suggestions'.
uuummmmm.... sorry, Mike.
That is clearly an overstatement of what they are.
Paltry.
Miniscule.
peeppeedikin'.
Not worth the time of day.
And that is exactly why we don't support them.
All of the progressive, hanging-by-a-thread, supporters of Obama need to understand this.
If you want the rest of us to stick with it, then you need to put forward serious, comprehensive and robust reforms.
Something worth fighting over.
The bad news is, the window is closed on that option.
Thanks Rahm very much.
If your definition of healthcare reform is an obligation to have insurance, and if your definition of "financial-services" reform is a Financial Ombudsman for consumers, then you and Rahm are on your own.
A lot of progressives are not going to sign on for that fight.
Tell Rahm that his is not the progressive change that we believe in.
His could be the Republican plan.
once put it), what with wars & healthcare & deep overseas debts, but with
the largest economy on the planet, we still have plenty of opportunities ahead.
Specifically, the economy is strong enough so that we can still get past our
debts, eventually, probably. That IS key to our future, and where& how we get
our energy is also key.
Anyway, the progressive era may well be just beginning anew, if we can avoid
this 'malaise' foolishness, which is mainly a crisis of confidence.
http://www.pbs.org/wgbh/amex/carter/peopleevents/e_malaise.html
http://hnn.us/articles/95308.html
NYT column today that showing some confidence is not even a
bad move, even when it's not *entirely* warranted.
http://www.nytimes.com/2009/08/10/opinion/10krugman.html
Call it 'the pixie-dust effect' if you like. Peter Pan thought the reason
he could fly had everything to do with pixie-dust, but it was actually
just confidence. (Similar deal for Dumbo.) So it is with real life. My
father was a great believer in 'the power of positive thinking' - turns
out he was right! Who would have guessed?
Personally I see financial market reform as the most important issue today, but we are being told health care is the priority and we have to cave to the demands of the private for profit sector or accept we won't get anything. I don't think that's true. I think single payer can pass but perhaps right now isn't the time to push it. After we reform and regulate the financial system perhaps there will be true incentives to address it.
If? Or this or that? It seems to me that ALL THREE things ARE ALREADY happening.
And therefore - unfortunately, and I wish I were wrong - I can only conclude that this country is in a decline the likes of which will eventually end up being a nightmare that no American who lived within the last 100 years and/or is alive today could ever imagine would ever happen.
I wish I could be more optimistic, but there it is.
In any event, there are reform waves every 30-40 years, and they usually last at least a decade. The last one was in the 1960s, so we were actually a little overdue for a reform cycle.
The Republicans are absolutely hysterical, which is typical of what happens to the conservatives in a reform period. They would do or say anything to stop the changes going on right now, but it will be futile. They will be banging their heads against the wall for at least a decade, as liberals and he left did in the 1980s and 1990s.
Obama does not have to worry about losing the elections in 2010 or 2012, no matter what the conventional wisdom of the moment might say. This reform era is just beginning, not ending, and the Republicans will not be making any real comeback before the 2020s, no matter how much they kick and scream. They are wasting their time, just as we often do during conservative cycles.
Also, just because the Republicans go off the cliff and become a permanent minority, doesn't mean they are out of control. Here in California, we have this idiotic supermajority requirement that allows a small number of fanatics a veto on any budgetary issue (which, in practical terms, is almost everything). The Senate has a similar supermajority system, the no-effort filibuster, which will lead to a similar destructive downward deadlock in the Federal system, even as Democrats maintain a supposed majority control.
That would include the dead assets from AIG, Fannie, Freddie and the rest. Those nationalized firms could have been recapitalized by the Fed, but operated in the public interest. This could have been done very quickly, and it might have to be done anyway if there's another crash.
They could have created a national investment bank tied to the Federal Reserve to aid the cities and states facing bankruptcy, and also be used for investing in green technologies, high speed rail, housing, and so on.
If Congress won't agree to use "their" new Health Plan why should we have to?
Fair is Fair, All American's would be wise to promote the same idea!