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.