Some thoughts provoked initially by a mass email I received today, in which Hullabaloo’s digby offered me a chance to win a Neil Young souvenir if I donated money to Daylin Leach, a proud progressive running for Congress in Pennsylvania. Apparently, the powers that be in the Democratic Party would prefer a corporate Democrat run in his place.This got me thinking about how asymmetric the current situation is between the parties. The Republican Party is in thrall to its base, to the point where its continued existence as a national party is threatened. The Democrats, on the other hand, are in many ways totally divorced from their base.
Mr. Leach, for instance, appears to be on the outs with Steny Hoyer because he strongly takes traditional Democratic positions that are more and more being relegated to the sidelines as the Beltway Democrats seek to please their corporate masters. Meanwhile, from the President on down, party “leaders” feel no shame about shilling for Wall Street and the banks, while ever so silently sticking it to us on core issues like Social Security. I’ve linked to stories about Gary Gensler before, but haven’t written about him, but his story is a case in point.
Mr. Gensler is the one Obama appointee (chair of the Commodity’s Futures Trading Commission) that has actually turned his back on his banker past and sought to vigorously regulate the derivatives market in accordance with the weak, but better than nothing, dictates of the Dodd-Frank act. As a reward Obama has fired him, but the effective date, and I assume Obama had no choice about this, won’t arrive until after the new regulations become effective. The banks are crying foul; they want the U.S. to await some international standards that they fully expect will allow them to continue their criminal enterprises unabated.
Senator Charles (Chuck) Schumer of New York is writing letters and pounding the table to try to stop sweeping new regulation of derivatives from being put into effect by the Commodity Futures Trading Commission (CFTC) four days from now on July 12.
Schumer is leading an assault against Gary Gensler, Chair of the CFTC, who wants to impose cross-border rules which would prevent firms like JPMorgan Chase from simply moving its derivative trades to London or another foreign trading venue to escape U.S. rules – the situation that allowed JPMorgan to lose $6.2 billion of deposits in its infamous London Whale derivatives episode.
Schumer’s actions and those of other Senate Democrats who joined with him in a letter to Jack Lew, Treasury Secretary, brought a sharp rebuke last week from the editorial board of the New York Times:
“In the letter to Mr. Lew, the senators say that to avoid confusing the banks, the C.F.T.C. cross-border guidelines should not take effect until the Securities and Exchange Commission completes a separate set of derivatives rules. That is ridiculous. The C.F.T.C. oversees virtually all of the multitrillion-dollar derivatives market; the S.E.C. a relative sliver. The C.F.T.C. has diligently issued its required rules under the Dodd-Frank law over the past three years and has set a deadline of July 12 to put the cross-border guidelines into effect. The S.E.C. first got around to issuing a pathetically weak derivatives proposal in May.”
(via Wall Street on Parade)
By any reasonable standard, what Shumer is doing is anathema not just to his base, but to the rest of the country. Yet he will go on, and will take no risk in doing so. His position will remain secure, for the corporatists and “moderates” who have captured the Beltway Democratic Party are securely in the saddle.
Now, one could argue that the Democrats are only doing the right thing by ignoring their base, for look what has happened to the Republicans, who have been captured by theirs. But there’s an important distinction between the two bases. The Democratic base is, to a great degree, merely asking for preservation of the status quo, or a return to the status quo that prevailed prior to the regulatory surrender to the banks in the late 90s. What we want is quite popular. We want social security preserved. So do almost all Americans, except the Beltway punditocracy, the Randian billionaires and their too-numerous Democratic fellow travelers (looking at you, POTUS). We, along with most Americans, are even willing to pay more, though we think the untaxed rich should do more paying (as do most Americans). We want Wall Street regulated (still looking at POTUS). We want people to be allowed to vote. We want women to be able to decide their fates for themselves. We want religion out of our schools and we want our schools to be public, not privatized. We are happy to let gay people get married. With few exceptions, these positions have super-majority support and the rest have at least majority support. They are not fringe positions; indeed, for the most part all we want is to preserve the good choices this country has made in the past, which corporate rent seekers and religious zealots are trying to destroy.
So, perhaps it’s time for we folks in the Democratic Party to take a page from the Tea Party playbook and start primarying people like Chuck Schumer. We’d probably lose the first few fights, but that would stop eventually if we took another page from that book and didn’t give up. Recall, after all, that it was an eventually unsuccessful attempt to unseat Joe Lieberman that finally got the Democratic Party to oppose the Iraq war in earnest. It might take even less heat to get them to start supporting the New Deal.
