(The following is Part III of a four-part series on the fifth anniversary [give or take a day or two] of the Wall Street "crash.")
An article buried on page A16 of Wednesday’s NY Times notes [see: “As Budget Fight Looms, Obama Sees Defiance in His Own Party”] developments regarding a multitude of brutally critical issues that will significantly impact the future, both near- and long-term, of the U.S. economy (and other areas of major concern to all of us high-information types) have been downright raging in the political world throughout the past week, during this extended, fifth “anniversary” of the 2008 Wall Street market crash. But, if you look closely—for the quite fragile moment, anyway—it would appear to this blogger that progressive populism may be quietly eking out a few small and, perhaps ultimately, some potentially bigger victories right under our collective nose. [See the Times article, linked at the beginning of this paragraph, and pieces by William Greider and John Nichols, over at The Nation blog: “Why The Defeat of Larry Summers Is About More Than The Fed,” and “The Populist Rebellion That Tripped Up Larry Summers,” respectively.]
That being said, I’ve seen this story play out so many times over the past five years, and it has very rarely ended well for us “former” liberal Democrats. We’re the folks that are now incorrectly labelled by those historically bereft, self-styled, faux centrist and rightwing, corporatocratic members of our Party—the DINOs that shoot themselves in the foot every time they twist the narrative as they feebly try to pigeonhole us --to be “the far left,” or “Socialists.” Meanwhile, the “old, far left” Democrats are called…hmmm…what are those words again? Oh, yeah, ”those on the fringe,” and/or ”terrorists!”
(By the way, in case you missed it, as of late Wednesday, the media’s aflutter over variations on this story, via this link from the WSJ: “White House Signals Yellen Will Be Nominee for Fed Chief.”)
So, speaking of “the far left” and “Socialists,” let’s go to page A16 of Wednesday’s NY Times, and notable narrative from Bernie Sanders…
As Budget Fight Looms, Obama Sees Defiance In His Own Party
By PETER BAKER and JEREMY W. PETERS
New York Times
September 18, 2013
WASHINGTON — For four years, President Obama counted on fellow Democrats to rally to his side in a series of epic battles with Republicans over the direction of the country. But now, deep in his fifth year in office, Mr. Obama finds himself frustrated by members of his own party weary of his leadership and increasingly willing to defy him.
In recent weeks, disgruntled Democrats, particularly liberals, have bolted from the White House on issues like National Security Agency surveillance policies, a planned military strike on Syria and the potential choice of Lawrence H. Summers to lead the Federal Reserve. In private, they often sound exasperated describing Mr. Obama’s operation; in public, they are sometimes only a little more restrained…
We’re told by
The Times that liberal/progressive Dems on Capitol Hill are complaining that
“…the White House has not consulted enough and failed to assert leadership. They say Mr. Obama has been too passive and ceded momentum to Republicans.”
The reporters also note that some Democratic congresscritters are contradicting themselves and others in their party in the House and Senate; and, they “…grouse that he takes on causes he cannot win, while others say he does not fight hard enough for principled positions.” The story points to a “failure to enact tightened gun control laws” and the G.O.P.’s “hold hold on immigration legislation have left liberals little to celebrate this year…”
Enter Bernie Sanders who actually does get into the thick of the reality…
“If you read the papers, you almost think the Republicans are in control,” said Senator Bernard Sanders of Vermont, an independent who caucuses with Democrats and vigorously opposed Mr. Summers until he withdrew from consideration. “They’re constantly on the offensive. Democrats are on the defensive.”
The lack of strong leadership, he added, has created a vacuum. “I think you’re going to see more independents saying, ‘Mr. President, we look forward to working with you, but we’re not simply going to accept your leadership and your ideas,’ ” he said. “ ‘We’re not going to follow you. You’re going to have to work with us…’ ”
The story then moves into the historical realities of the President’s situation, noting that past residents of the oval office have run into similar situations in their second term.
But, here's what makes this notable, IMHO: over at The Nation, both William Greider and John Nichols both nail it as they agree with Sanders, and note that there’s quite a bit more to the Summers’ matter than just the Fed story. It’s about the administration’s Wall Street-centric economic focus over the past five years, and a variety of policy differences between Progressives and New Democrats, of late.
Go figure!?!
Why The Defeat of Larry Summers Is About More Than The Fed
William Greider
The Nation
September 16th, 2013 3:53PM
The Sunday afternoon announcement that Larry Summers is giving up his quest to become Federal Reserve chairman resonates with meaning for reform—both for government and the Democratic party. After several decades of dominance by the center-right financial perspectives of New Democrats, this is a huge loss for the Rubin-Clinton wing. And it foretells more to come.
When the Obama White House let it be known in early summer the president expected to appoint Summers as successor to Fed chairman Ben Bernanke, the party erupted in rage and rebellion. It amounted to rewarding the very policy architects who led the country into ruin with their financial deregulation and Wall Street–friendly non-enforcement and bailouts for the too big to fail bankers. Instead of going along meekly, progressive Dems built a firestorm against Summers and kept throwing on new logs.
The White House leakers kept reassuring favored reporters that the deal was done, the president really wants Larry in this pivotal position determining policy on money and credit for the country. Leading reform senators—Sherrod Brown, Elizabeth Warren and Jeff Merkley—fired back and raised the ante. If Summers is nominated, these key members of the Senate banking committee intend to vote against his confirmation. That could well be fatal to Summers’s and Obama’s ambitions. To make it worse, Senator John Tester of Montana, a moderate by any measure, let it be known he would join them in voting to block Summers. Among other disabilities, Summers was contemptuous of policy opponents and known for refusing to acknowlege collosal errors—the very opposite of a consensus leader.
Finally, the White House mercifully pulled the plug on flawed Larry. (It seems very unlikely Summers got the message on his own, considering his record for stubborn egotism.)
This is a huge victory for the prospects for genuine economic reform—well beyond anything Obama has so far proposed or accepted…
Greider writes that the President
“…has a chance to change the [economic] outlook dramatically by appointing a new Fed chair who understands the deep dislocations created in part by Federal Reserve policy during the last three decades…”
He also reminds us that this is Obama’s chance to realign his economic legacy for many years, since the President “…will appoint four and as many as five new governors for the seven-member Federal Reserve Board. That is an unprecedented opportunity to influence the future if he chooses wisely and reaches beyond the usual list of safe choices with conventional views…”
And, this is pretty much the point where Greider becomes as overly optimistic as Bill Black is pessimistic (in Part IV, the final post of this series). And, that’s because he omits the inconvenient fact that President will need formal approval for his Fed Board choices from the powers that be on Capitol Hill.
I do like Greider’s closing comment(s), however, where notes that this pushback from within the Party on Summers “…tells the White House and this president they had better start listening to the restless reformers on the left of the party. Senators and progressive Democrats in the House have serious ideas for reform. Having won this pivotal victory, they are sure to push for larger goals. Instead of running away from the liberal-labor progressives, Obama’s presidency should put an arm around them.”
Greider’s colleague at The Nation, John Nichols, kicks Greider’s themes up a notch. Nichols starts off his post by noting the irony of the timing of Larry Summers’ formal withdrawal from consideration for the position of Fed Chair: “…the decision came exactly five years after the financial meltdown of September 2008.”
The Populist Rebellion That Tripped Up Larry Summers
John Nichols
The Nation
September 15th, 2013 6:53PM
…Progressive critics of Summers had argued for months that he was not the right candidate to tame the big banks—or to address the fundamental challenges facing the US economy.
But Obama continued to consider the man who served as his director of the National Economic Council…
…
…Though he had friends in the White House, Summers faced mounting opposition from Democrats in the Senate and from grassroots progressive groups. The prospective nominee was criticized by women’s organizations for controversial statements made during his tenure as president of Harvard. He was criticized for revolving-door Wall Street ties. And in the most dramatic show of anti-Summers sentiment, key Democratic senators began to signal in recent days that they could not confirm a man who has so frequently opposed needed regulation of the financial sector of the US economy.
“The truth is that it was unlikely he would have been confirmed by the Senate,” said Senator Bernie Sanders, the Vermont independent who caucuses with the Democrats. “What the American people want now is a Fed chairman prepared to stand up to the greed, recklessness and illegal behavior on Wall Street, not a Wall Street insider whose deregulation efforts helped pave the way for a horrendous financial crisis and the worst economic downturn in the country since the Great Depression.”
Sanders has long argued that the Senate should get more serious about checking and balancing the Federal Reserve…
…
…Unfortunately, the Fed has a long history of serving Wall Street while neglecting the rest of the country. Be they Democrats or Republicans, be they theorists or doers, past Fed chairs have tended to embrace the thinking of the free-market fundamentalists and free-trade absolutists who have created an economy characterized by declining wages and expanding income inequality…
…
… it should now be clear that whoever is nominated to replace Bernanke will have to take seriously not just those particular questions but the greater concern about whether the Fed will serve Wall Street or Main Street.
As optimistic as Greider and Nichols may be about the opportunities immediately ahead that await the President to enable him to leave behind a much more positive record of economic accomplishment, after 2016, the truth—as Bill Black notes in Part IV of this series—is that he’s much more conservative when it comes to economic policy than many Progressive Democrats may realize, or even wish to acknowledge.
As Black also notes (in Pt. IV), one need look no further than his appearance, this past Sunday, on ABC’s “This Week With George Stephanopoulos” for confirmation of this inconvenient truth.
As it’s been widely noted by U.S. presidential historians, most President’s do tend to focus upon the legacy that remains behind once they leave office, especially if they’re in the second term of a two-term presidency. After five years of muddling along, through the turbulent wake of the still-devastating flotsam of this nation’s worst economic downturn since the Great Depression, a WAY may be presenting itself to President Obama to shift the focus of his administration’s efforts to revive the economy from Wall Street to Main Street. Most objective, progressive-thinking observers--based upon the sheer statistical facts of the situation--agree that it's long overdue. The honest and legitimate question to ask at this critical juncture is whether or not he really has the WILL to follow-through with that effort.
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