seeking knowledge and laughter, putting a bullseye on inaccuracy

Why Wall Street Got a Pass from Democrats

Very good article from The New Republic: "A Wasted Crisis?" by Paul Starr. The subtitle is "Why Democrats did so little to change Wall Street.

He reviews several books discussing the Democratic Party response to the economic crisis and Wall Street, each of which I put on my reading list. All of it reinforces my very strong belief that if we do not reform the campaign finance system, our Republic will remain beyond our reach. Support the Rootstrikers!

From the Paul Starr piece:

Finance-friendly government has also resulted from the industry’s increased lobbying and political contributions in an environment where countervailing pressure from consumer groups is negligible. Even in the latest battle, the imbalance has been staggering. According to Kaiser, a consumer coalition in 2009 announced it would raise $5 million to support financial reform; in comparison, the lobbying expenditures by the finance industry in 2009 and 2010 totaled around $750 million. Wall Street political contributions, McCarty and his co-authors point out, have gone to both Democrats and Republicans, though not indiscriminately. “The more conservative wing of each party (moderate Democrats and conservative Republicans) garners substantially more contributions than the more liberal factions.” The finance industry is bipartisan in the sense that it pushes both parties to the right.

Former Senator and present lobbyist, Chris Dodd was a chief author of the effort to ensure Wall Street didn't once again kill our economy. From the article:

Dodd, whom Connaughton describes as “Machiavellian,” readily made concessions to Republicans who were not going to vote for the bill, while ignoring his own Democratic colleagues. “Dodd and the Treasury Department wanted a squishy bill,” Connaughton writes, “and the Republicans were willing to work with Dodd to weaken it.”

Where have we seen this before with Democrats? The stimulus is the first thing that comes to mind - where the stimulus was watered down and included major non-stimulative tax cuts to woo Republicans than never supported it. The problem is that Democrats can't even count on the middle-of-the-road Democrats to vote for a bill unless they give major concessions to Republicans who will never vote for it anyway.

And why is that? Probably because those Democrats come from districts where Republicans are far better at winning elections with deeply flawed talking points that nonetheless play well on television. So Democrats have to avoid doing anything that Republicans can easily demagogue (often by lying and recognizing no one will call them on it).

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