NY Attorney General Eric Schneiderman on holding bankers accountable, and the need for a second New Deal

In a Netroots Nation session earlier this week, a panel of activists shared stories about the various grassroots campaigns that they’ve waged against the big banks in their communities. One of the panelists… I believe it was Max Berger, an organizer associated with Occupy Wall Street… mentioned how, when it had first been announced that New York Attorney General Eric Schneiderman would be co-chairing the federal Financial Fraud Task Force’s Mortgage-Backed Securities Working Group in January of 2012, there was a great deal of optimism. Many, it seems, felt as though prosecutions were eminent, and that we’d soon see being bankers being marched away from their corner offices in handcuffs, like we did during the savings and loan crisis, in which several hundred went to jail. That, of course, didn’t happen, though, and, in late April, Schneiderman launched his own investigation into the illegal actions of those bankers responsible for the collapse of 2008.

Schneiderman, as you may recall, formally launched this New York probe on April 26 of this year, saying, “The reckless deregulation and irresponsible conduct that brought down the American economy must be systematically investigated.” And, Occupy Wall Street had his back. As Berger noted during the panel, he and other Occupy protesters held a sit-in at Schneiderman’s office, showing their support, and encouraging him to take the matter and hand seriously. They, again, were hopeful. Unfortunately, it seems, people are now beginning to lose faith. Berger said, toward the end of the panel, that he personally thinks that Schneiderman didn’t know how powerful the forces aligned against him were… And, with that as context, here’s video of Scheniderman, who took the stage at Netroots Nation later that evening.

And here are my brief notes, for those of you how would rather hear what the Attorney General of New York had to say, filtered through my mind.

First, it’s probably worth mentioning that there were protesters. They were sitting right up front. When Schneiderman took the stage, they raised their placards. I couldn’t read what they said. They weren’t obnoxious about it. Someone yelled that he should make good on his promises to hold people accountable, but, otherwise, people just held their signs.

Schneiderman thanked the bloggers and activists in the crowd, saying that he wouldn’t be where he was today without an active online community, pushing for progressive change. He talked of our collective power, noting that leaders don’t create movements, but that movements create leaders. Politicians, he said, liked to come in late, after battles had been won, and claim credit for what others on the ground had done. I got the sense that he was acknowledging this about himself, which I liked. He said that holders of elected office, by their very nature, were inclined to be cautious. He said that it was our job to push them… He asked for us to push him… This was a refrain that he’d keep going back to over the course of the evening. “You lead,” he said, “and your leaders will follow.”

This is the point where someone in the audience yelled out something about his inaction relative to the prosecution bankers. Schneiderman smiled and said, “I apreciate your getting my point about pushing elected officials.”

Quoting FDR, he then said, “I agree with you. Now make me do it.”

In this country, said Schneiderman, we had a century of progressive action up until 1980, during which the conditions of the poor and middle class continued to improve. The conservative shift we’re seeing, he said, wasn’t started by Republicans holding office. The Republican movement was started by activists that were dedicated to derailing the progress being made by Progressives. We need to do the same thing on our side. We need to plan for the long term, and build a movement.

He talks of the difference between what he calls transactional politics and transformational politics. Transactional politics, he says, are the individual fights that we’re all engaged in on a day-to-day basis. They’re the battles over individual pieces of legislation, and the campaigns we wage over important issues. He argues that we need to strategize at a level above that. And that’s what he calls transformational politics. “We need to change how people think, so that the impossible becomes possible,” he says. We don’t just need to win the fights that are in front of us right now, but we need to do the groundwork so that we can get a better deal for all Americans in the future. The greatest damage that the conservatives have done, he argues, doesn’t have anything to do with individual pieces of legislation. It’s that they changed the mindset of the American people so that they would embrace laws that hurt them, by repeatedly telling them that government is less effective than the private sector, and convincing them that unions were bad for the middle class (despite the fact that they created the middle class). We need to change the way people think, so that when opportunities arise, we can push for positive change. That’s what the other side did. They worked for 40 years. We need to have a similar mindset.

He says that what we need is a second New Deal. The people in power, he says, know that this could be brewing, and it frightens them. He says that we need to know it, too. We need to know that this is a possibility, and we need to act on.

Speaking of the New Deal, he said that the thing that made it special wasn’t just the individual legislative components that comprised it, but that it marked a change in thinking about government. According to Schneiderman, it marked a transformation moment. With the New Deal, he said, people began to think, “We’re all in this together.” Furthermore, they came to accept that government could, if run well, exist to help us. And, according to Schneiderman, we could be on the brink of such a transformational moment once again. 2011, he says, marked the opening for this transformational work, and a second New Deal.

As for his work relative to the derivatives market and the crash of 2008, he tells us that he has three main objectives. He wants for those who caused the crash to be held accountable. He wants there to be meaningful help for home owners who are suffering as a result of the actions of these individuals. And he wants to get everything documented, and out in the open, so that people can’t rewrite history.

The collapse of 2008 did not, he says, happen because we were trying to get poor people into homes that they couldn’t afford, and it wasn’t because we spend too much on teachers, police or firefighters. Public employees and the working poor were not the ones who blew up our economy, he says. “Unregulated derivative trading caused this.” These people fought for deregulation, and this was the result. In 2004, he notes, our elected officials, at the behest of the big banks, refused to regulate predatory lended, and they stopped the states from taking action on their own. They led us down the path toward “supply-side devastation.”

Last year, the big banks offered the states a settlement deal. Schneiderman says that he found it to be inadequate, and refused to accept it. The banks, he said, in exchange for their money, wanted a broad release for all of their previous wrongdoing. Most of the other attorney generals wanted to do it. Schneiderman says that he, and a few others, didn’t want to accept it… And, as they were preparing to fight it out, something incredible happened… Occupy Wall Street came about, and gave voice to the demand for accountability. And, at that point, the national debate shifted. The attorney generals started to get behind a more narrow release, which would allow for wider accountability. Now, he says, it’s bsck on the national agenda. And, he added, because of this, Obama, at the State of the Union, began saying things about how “everyone needed a fair shot” and about how we all needed to “play by the same rules.” That wouldn’t have happened otherwise, he says. And we can’t stop now. We can’t just elect people and go home. We need to stay engaged, and we need to keep holding their feet to the fire. We need to keep pushing for comprehensive change. It won’t happen overnight, but we need to keep fighting for a second New Deal.

And here, for those of you who are interested, is a clip from early May of Occupy the SEC’s Alexis Goldstein discussing the investigation, and ongoing initiatives to reign in the big banks, with Schneiderman.

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