Why Occupy Wall Street is Angry

This country once had a stable financial system. It was the direct result of the New Deal. The crash of '29 had been created by greed, lax rules, and government institutions unequipped and ideologically unprepared to tame capitalism's most rapacious players.

Enter FDR and the New Deal. With it Americans enjoyed roughly 50 years of prosperity and a largely stable banking system. The good 'ol days, as conservatives seem to pine. And there was good reason why we look fondly at what seems to have been our economic heyday. What conservatives forget is that we had far less income inequality, higher taxes, greater union membership, lower consumer, state and federal debt. We had a trade surplus, a much larger manufacturing base, and little outsourcing. And we did not have job-killing free trade agreements, such as NAFTA!

Underlying all of this was a rigid set of banking rules that, among other things, kept commercial banks out of the stock market and enforced prudent capitalization requirements. Upon assuming office, President Reagan immediately worked to overturn regulations and help Wall Street's rise to dominance, a rise that continues today despite Obama's half-hearted and ineffectual efforts to reprioritize Main Street.

Banks quickly capitalized on the changes Reagan set in motion; systemic banking failure began within a few years. Those failures have been with us in regular intervals ever since, all the while wealth continues to concentrate in the hands of those who created the economic chaos in the first place.

Here is Elizabeth Warren explaining the process.

She'll Do More Good As Senator Anyway

Elizabeth Warren is running for Scott Brown's senate seat in Massachusetts. You may recall that Warren was the favorite to head the Consumer Financial Protection Bureau, a position she did not get because President Obama caved in to Republican demands. Instead, she was appointed as a special adviser, where she reports directly to Timothy Geithner, a man who is a big part of the problem, and does not want to see or hear her.

For those keeping score at home, Warren is seeking the seat held for decades by the Lion of the Senate. No-name Brown lucked into his temporary job when State Attorney General Martha Coakley, who had all the advantages, instead ran an inept and listless campaign that disgusted many democratic stalwarts and independents alike.

So, yeah, Warren for Senate, 2012. Chances are good this will turn out better than if she had been buried in that bureau with a man like Geithner always ready to block reform.

I might add that people like Warren are advocating what we had in this country in the past. It is not some dangerous and untested territory to want to protect consumer interests or to hold financial firms accountable for their behavior. We had higher tax rates, lower debt, stronger growth-and far more equality-before we began the long slide towards reduced taxes on the wealthy, the gutting of regulations, and the growing dominance of a financial sector that is beholden to no one.



If you want to know how Warren thinks, and in the process learn a lot about the mess the American middle class is in, read this book.

Warren Appointed

After much delay, Elizabeth Warren has been nominated to head the Consumer Financial Protection Bureau. Good news? Maybe, but many progressives are uncertain of the significance. Some have labeled the move as a "triumph of the money party," noting that Warren's role has "been downgraded" to special adviser, and that she must report to Tim Geithner.

Ugh... If that proves to be the case, the cynics will surely be correct. Geithner will act as gatekeeper who will work to ensure Warren's voice is muted if not completely drowned out.

But is is uncertain just how their respective roles will play out. I don't expect much cordiality between Warren and Larry Summers. He is a neoliberal to the bone, and a prickly, sexist, SOB short on interpersonal skills to boot. And both he and Geithner will likely feel threatened by an adviser who refuses to be part of their Wall Street protection racket.

Perhaps it is a very big deal. Warren's supporters, of which there are many, say she has been able to extract promises regarding her role and her access to the President. Julia Rosen at Crooks & Liars has written a very positive interpretation of the President's decision. She notes the strong grass-roots campaign that essentially told the President that he needed to do the right thing or watch his support collapse. See the story and the several good links she provides.

The howling from Republicans will continue, and Chris Dodd, obviously bucking for a plum job on Wall Street upon his retirement, will keep braying and bitching as long as he thinks it will impress his benefactors. 

I am cautiously optimistic.

Warren Waits and Waits...Warren Who?

President Obama is still stalling on the Elizabeth Warren nomination to head the Consumer Financial Protection Bureau. Presumably there is a Vegas line on her chances of receiving the nod. Cynics are suggesting the chances are slim and none. For others it is virtual line in the sand: If the President doesn't nominate Warren, who is clearly best-suited for the job, then it is the final proof that the fix is in. Timothy Geithner, Larry Summers and the rich guys on Wall Street don't want her for one simple reason: They are afraid she is incorruptible, meaning she will actually do her job. They want their gravy train to continue and to hell with the rest of us.

Me, I think he will nominate her, though I am far from convinced. One could argue he is dragging this out as long as possible so the public, what with its chronically short memory, will forget why so many wanted her in the first place.

I mean, shit, forgetfulness is a plague on our public discourse.  According to the Pew Research Center, nearly half of Americans think the Troubled Asset Relief Program was Obama's creation. Only 34% realize the massive bank bailout program started under George Bush. I bet Fox News is not going out of its way to point this out to teabaggers.