Sprouting Populist balls, and going after Wall Street

One good thing to come out of Republican Scott Brown’s election to the Senate a few days ago, is that it seems to have lit a fire under our President. In an abrupt about-face, Obama came out late last week, saying that our unrepentant financial industry had to be reigned in. Distancing himself from Treasury Secretary Timothy Geithner, Obama publicly embraced the tough restraints which had been advocated by former Federal Reserve chairman Paul Volcker.

Consensus seems to be that Obama didn’t have much of a choice. The tides were turning against him, and he needed to recast himself as a defender of the regular Americans… you know, that guy we elected, who promised to fight the moneyed interests and stand up for regular Americans. So, I guess I could be cynical, and pissed that it took a Tea Party Republican winning Teddy Kennedy’s Senate seat to get Obama motivated, but I’m just happy that it’s happened. And it seems that others, like Former Labor Secretary Robert Reich and Elizabeth Warren, the Chair of the Congressional panel charged with overseeing the bank bailout, are too. Here’s a clip from an article by Reich, followed by a video of Warren, who has, until recently been pushing the idea of a Consumer Financial Protection Agency without much support from above.

President Obama is now, finally, getting tough on Wall Street. Today he’s giving his support to two measures critically important for making sure the Street doesn’t relapse into another financial crisis: (1) separating the functions of investment banking from commercial banking (basically, resurrecting the Depression-era Glass-Steagall Act) so investment banks can’t gamble with insured commercial deposits, and (2) giving regulatory authorities power to limit the size of big banks so they don’t become “too big to fail,” as antitrust laws do with every other capitalist entity. A few days ago the White House demanded that the biggest banks repay the $120 billion or so still owed the government from the bailout.

All good, all correct, all important. The president deserves at least two cheers. Why not three? It took him over a year to finally get here. The House has already completed its work on financial reform and may be reluctant to start over. The Senate is in disarray since Chris Dodd, chair of the Banking Committee, announced recently he wouldn’t seek reelection, and is poised to compromise with Wall Street on a number of big issues. Neither chamber has shown any interest whatsoever in resurrecting Glass-Steagall or limiting the size and risk of big banks. In other words, much of the game is over….

But suddenly the winds are blowing in a different direction over the Potomac. The 2010 midterms are getting closer, and the Democrats are scared. Their polls are plummeting. The upsurge in mad-as-hell populism requires that Democrats become indignant on behalf of Americans, and indignation is meaningless without a target. They can’t target big government because Republicans do that one better, especially when they’re out of power. So what’s the alternative? Wall Street…

And here’s that video of Elizabeth Warren:

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And here’s, for those of you who don’t do video, is a clip from the transcript:

“I feel better than I’ve felt in a long time. Because what I’ve heard the president saying on the Consumer Financial Protection Agency is, ‘It’s not going down. I’m here, I’m not giving up on it. There is not going to be a compromise to cave in on it.’ I heard him say that we’re going to tax those large financial institutions, and we’re going to make them pay back all of the money under TARP. And then today, I heard him say we’re gonna break apart too-big-to-fail. And we’re going to have an answer, so that every financial institution, if it makes big enough mistakes, if it takes big enough risks and loses, every one of them, can in the end, die…. And what I hear in that is that… the financial institutions have pushed him hard… [Obama] is pushing right back.”

[Also, be sure to check out Frank Rich’s column in today’s New York Times.]

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2 Comments

  1. Brackinald Achery
    Posted January 23, 2010 at 9:08 pm | Permalink

    Talk.

    Judge people on their actions and the results of their actions, not their words. Especially if they’re telling you what you want to hear.

  2. Posted January 24, 2010 at 3:39 pm | Permalink

    Yup. I hear you, Brack. I just think this is a step in the right direction. But, you’re right, talk is cheap.

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