3 Easy Ways to Smack Down Wall Street
Sad, but true: The Democrats are already well on their way to screwing up financial reform the exact same way they screwed up health reform.
Yes, it’s depressing to think about, but the telltale signs are all there: we’ve got Democratic senators negotiating with Republicans to water down reform legislation passed in the House. For the past year Capitol Hill has been teeming with lobbyists working overtime to kill any significant reform. And of course, GOP flacks like Frank Luntz are penning sleazy memos advising Republicans on the best ways to kill financial reform before it even comes up for a vote.
So the chances of getting real, effective reform passed this year are somewhere between zero and some incredibly minuscule number science has yet to discover. Fortunately, this gives progressives the chance to engage in some long-term messaging to set up for stronger, better action in the future. Because when the next major financial collapse comes, progressives have to put ourselves in a position to say, "We tried to warn you, dummies.” The following is a strategy blueprint for winning the next round of the finance debate, something that will hopefully set up the progressive case for real reform once the bankers break our economy again.
Step One: Do not rely on Obama or any Democrat to make our case for us
After the debacle of health care reform, it’s pretty obvious that Obama and the Democrats aren’t exactly skilled legislative tacticians. If they apply the same blueprint they used for health care reform to financial reform, we can expect the final reform package to contain enormous bribes for all major industry stakeholders, as well as centrist senators who use their clout to secure goodies for their home states. In others words, don’t be shocked if Lincoln, Nebraska becomes the new financial capital of the world after Ben Nelson lobbies to turn it into a wholly deregulated “free banking zone.”
The upside is that we won’t feel obligated to carry water for the Democrats when we’re asked to justify the ridiculous deals they’ll inevitably make to drag the final legislation across the finish line. Instead, we can simply let it rip and call them out as tools of the financial lobby, which most of them assuredly are. The goal here shouldn’t be to help the Democrats’ political fortunes, but rather to move the conversation in a somewhat saner direction. After all, democracy can’t survive long if our two options for financial reform are “letting the banks do whatever they want" and "bribing the banks to accept loophole-ridden restrictions on their activities.”
Which brings us to our next step....
Step Two: Assume the media are too stupid to understand policy
One problem some progressives have when they engage in public debates is they’d rather be clever than effective. You could see this all throughout the health care debate, when wonkish reform advocates created intricate, detailed arguments about ways to bend health care cost curves. The other side, meanwhile, just had to yell “Barack Hussein Obama wants your granny dead!”
Which message do you think got across more clearly to the public?
The big culprit for this dynamic is a mainstream press corps that enjoys reporting fights and controversies more than facts. The GOP’s big media figures, from Newt Gingrich and Glenn Beck to Sarah Palin and Rush Limbaugh, have all mastered the dark art of saying something completely divorced from reality that will also be widely and uncritically reported by much of the mainstream press. Thus, if Glenn Beck accuses President Obama of implementing a Pol Pot-style economic policy, Politico will use it as the starting point for one of its "Arena" debates along the lines of “Beck says Obama is worse than the Khmer Rouge. What do YOU think?" So the challenge for progressives is to make our messages not only shorter and crisper, but more entertaining for the media to report.
Happily for us, Wall Street is the best ready-made villain this side of Skeletor. Think about it: Most of these guys have spent decades telling the federal government to butt out of their business and have successfully lobbied Washington to deregulate their industry through such odious legislation as the Commodity Futures Modernization Act that helped blur the lines between commercial and investment banking. And yet, when these clowns got themselves into trouble and wrecked our economy in the process, what was the first thing they did? That’s right, they went running to the government to bail them out.
Admittedly, Skeletor-izing the bankers will get some pushback from the mainstream press, which never misses an opportunity to suck up to the rich and powerful. David Gregory’s interview with Tim Geithner was a classic example of this phenomenon, with Gregory practically begging Geithner to denounce executive compensation limits for bailed-out banks. Don’t believe me? Take a look at some of the questions Gregory asked:
- “By capping the pay that executives get at those largest firms that got bailout money, how does that further the goal of paying the taxpayer back?”
- “But what if the people who are capable of stabilizing these companies and becoming profitable again leave, undermining the effort for these firms to pay the government back?”
-“You don't see an exodus at these seven firms?”
-“Do you think a company like AIG, would you like to see it prosper, make a lot of money again and be successful?”
Punchy progressive messaging can easily shut this line of questioning down. A halfway competent progressive advocate would have simply responded to David Gregory’s questions by giving him a funny look and saying, "Uh, dude? Why do you care if we hurt Skeletor’s feelings?” I guarantee you Gregory would never again ask endless questions about the supposed dangers of limiting bailed-out banker bonuses.
Step Three: Simplify the solutions
Another lesson progressives should learn from health care reform is how to simplify our solutions into succinct sound bites. If you can’t state your case for a policy in three quick bullet points or less, you’re probably going to lose the argument. In the case of financial reform, I’d pick the following three arguments to start from:
1) The banks are now timebombs. Because the taxpayers bailed them out from the mess they created, the banks now feel the U.S. government has got their backs and they will undoubtedly make more catastrophic decisions unless we place limits on the risks they can take.
2) Too-big-to-fail is too big to exist. Any institution that is so large its failure can bring down the entire economy should be broken up. Bringing back relevant portions of Glass-Stegall would go a long way toward fixing this.
3) Lots of enterprises in our economy, including banks, credit card companies, mortgage brokers and payday lenders, pull lots of shady crap on consumers. A new consumer financial protection agency will look out for this shady crap and put a stop to it for your benefit.
Keep in mind that some variation of these three messages will need to be repeated over and over again in the coming years, since the Democrats are unlikely to act on any of them in the near future. Meanwhile, the economy will likely have to suffer another bubble-induced collapse before lawmakers start taking financial reform seriously. And when that happens, we have to be there to make sure they don’t let Skeletor off the hook again.