Obama and Democrats to gut Lincoln derivative bill after Tuesday primary race
Is it any real surprise that people hate government and distrust political parties?
That’s not just a rhetorical question. I was gearing up to switch my focus to discussion the recently introduced Kerry-Lieberman energy bill when I came across this story and promptly flipped my lid.
It seems that the White House and key Democrats intend to hold off gutting Blanche Lincoln’s derivatives bill until after she’s done her best to beat Bill Halter in the Democratic primary. Or so they hope,
With their assent, the plan was authored by Sen. Blanche Lincoln (D-AR), who designed it to guard her left flank against a somewhat formidable primary challenge, and has been boasting of it on populist grounds for weeks. And that according to Republican and Democratic Senate sources, has led Democrats to quietly agree to postpone any changes they decide to make to her proposal until after this Tuesday’s election has passed, to avoid embarrassing her in front of voters.
Right, because we wouldn’t want to embarrass Blanche by screwing the American people over prior to getting their votes. That would be in poor taste.
This is just the worst of political calculus and it shouldn’t surprise me anymore, but I can’t help feeling angry. I mean, look, there are reasons not to like Lincoln’s derivatives bill. I’m sure that President Obama, Sheila Bair, Paul Volker, and key Democrats have reasons for their opposition. Potentially even persuasive reasons.
But Obama et al don’t have the guts to stand up and state those reasons in a clear and forthright manner because, you know, its not politically feasible to do so,
Senators on both sides of the aisle, wary of coming down on the side of Wall Street, have thusfar been reluctant to touch Lincoln’s provision, fearing the potential political backlash.
Maybe there is a potential backlash because people are honestly and justifiably angry about what Wall Street has done and how its actions have had a deeply destructive impact on their lives. Maybe the millions of people who have lost their jobs would like to see a little pay back in the form of financial reform on derivatives that people like Brooksley Born were warning about the need for back in 1994 under Bill Clinton.
And maybe President Obama and key Democrats would be so kind as to consider that those same folks would like, just for once, to get the feeling that government — their government — is on their side for a change. Instead, stories like this reveal that no matter what the campaign slogan, politicians are generally more concern with manipulating the outcome of elections than having an honest discussion about what needs to get done to right the country’s current course.
The worst part about all of this is that Democrats will probably get away with this kind of maneuvering if Lincoln is successful in beating Halter.
As a Washington Post poll from last month revealed, the public is strongly in favour of strong financial reform, but the numbers noticeably lag when it comes to derivatives (63% v. 43%). I would speculate that the discrepancy is primarily due to a knowledge gap when it comes to derivatives.
That’s not to suggest that the public is too stupid to understand the issue or anything of the like. Rather it is to note that derivatives are not something with which the average individual is familiar. I certainly didn’t have much a clue about them prior to deciding to focus on writing about the financial crisis.
I think the numbers bear this notion out. On the issue of stronger financial reform in general, only 8% of respondents held “no opinion”. However, when it came to regulation of derivatives, while the opposition was greater, those without an opinion rose to 17%. That is head and tails above the registered “no opinion” on any of the other questions posed by the poll.
So as integral as derivatives were to the financial collapse that has caused so much grief and drawn so much ire, significantly weakening legislation to deal with the issue is likely to draw little press. That Obama seems poised to achieve this goal in such a backhanded fashion is, in many ways, anathema to what his campaign and presidency were supposed to be about.
And so while it might be surprising, it is profoundly disappointing.
For what it’s worth (not much) my advice to Blanche Lincoln is as follows: go along with this delaying tactic and if you do pull out a win against Halter, promptly tell the White House to go fuck itself. Say in no uncertain terms that you wrote the bill the way that you did because it is what you think needs to be done for the good of the country and you’re not willing to bend on that, not even for your own President.
You want to see populist uprising? You have no idea. That kind of a move is going to send a message to your constituents that you’re on their side and willing to fight for them.
Riding that kind of a wave, you might actually stand a chance in November — and for good reason.