Opportunity Knocks: Dem Populism, Citizens United And Financial Reform

By Big Tent Democrat, Section Other Politics
Posted on Thu Jan 21, 2010 at 09:39:15 AM EST
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With the Democrats in political trouble, I think the Supreme Court's decision today in the Citizen's United case provides Democrats with a big political opening. The NYTimes is reporting that President Obama is favoring Paul Volcker's idea to limit the size and activities of banks:

The president, for the first time, will throw his weight behind an approach long championed by Paul A. Volcker, former chairman of the Federal Reserve and an adviser to the Obama administration. The proposal will put limits on bank size and prohibit commercial banks from trading for their own accounts — known as proprietary trading.

Republicans will support the banks. They will also support the Citizens United decision, which provides corporations free rein to spend lavishly on politicians. These developments provide the President and Democrats the chance to show some populist chops. Opportunity knocks politically. And not a moment too soon for the Dems.

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Opportunity Knocks: Dem Populism, Citizens United And Financial Reform | 39 comments (39 topical)

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and so, (5.00 / 2) (#8)
by cpinva on Thu Jan 21, 2010 at 10:36:46 AM EST

it's now official: the corporations have taken over the country, crushing all in their path.

"But you have to open the door" (none / 0) (#1)
by Demi Moaned on Thu Jan 21, 2010 at 09:45:15 AM EST

I hardly think opportunities have been lacking had they been so minded. But if the President is finally ready to go out and do rhetorical battle, something good may happen yet.

Hmm... (none / 0) (#2)
by Dadler on Thu Jan 21, 2010 at 09:51:21 AM EST

This is really just a new form of Glass-Steagall. I guess, um, getting rid of it wasn't such a harmless idea after all.

Not at all (none / 0) (#3)
by Big Tent Democrat on Thu Jan 21, 2010 at 09:59:24 AM EST

Commercial banks are not going to be restricted from engaging in investment banking, just from engaging in proprietary trading.

In addition, the size issue is also important. But it also has nothing to do with Glass Steagall.


The only other things investment banks do are (none / 0) (#6)
by steviez314 on Thu Jan 21, 2010 at 10:16:28 AM EST

provide advice to clients, execute trades for them, and underwrite securities (no to hold, just to place through their networks).

Glass Steagall wasn't really implemented to deal with these issues (they are harmless), but with the commericial banks buying and selling securities for themselves. They just didn't call it prop trading yet.


Disagree (none / 0) (#7)
by Big Tent Democrat on Thu Jan 21, 2010 at 10:35:21 AM EST

Glass Steagall was not concerned about the solvency of commercial banks so much as it was aimed at keeping commercial banks from having a proprietary TRADING interest in its other activities.

It was a fraud concern as much as anything.


BTW (none / 0) (#9)
by Big Tent Democrat on Thu Jan 21, 2010 at 10:37:30 AM EST

If those activities were "harmless," then why were commercial banks prohibited from doing them?

The reason is precisely to avoid proprietary trading in the vehicles they are marketing.

Glass-Steagall prohibited investment banking by commercial banks. The changes proposed won't stop that.

And it is an important activity.


Commerical banks kept doing the advising parts. (none / 0) (#10)
by steviez314 on Thu Jan 21, 2010 at 10:41:50 AM EST

And today, prop trading desks make up a lot of the profits of commerical banks (or losses too)


: Prop trading is the issue (none / 0) (#12)
by Big Tent Democrat on Thu Jan 21, 2010 at 10:51:24 AM EST

And remember, the Glass Staagell Act (none / 0) (#11)
by steviez314 on Thu Jan 21, 2010 at 10:46:57 AM EST

(Banking Act of 1933) also established the FDIC.

It made 100% sense to not allow commerical banks to trade with customers' deposits--especially once they were gov't guaranteed.


: Makes perfect sense (none / 0) (#13)
by Big Tent Democrat on Thu Jan 21, 2010 at 10:51:39 AM EST

not hopeful anymore (none / 0) (#4)
by Capt Howdy on Thu Jan 21, 2010 at 10:05:49 AM EST

opportunity has been camped out on the doorstep for a year

well (none / 0) (#5)
by Ga6thDem on Thu Jan 21, 2010 at 10:15:15 AM EST

this is something that the down ticket dems certainly could sell, at least some of them but not Obama. He just doesn't have the demeanor to carry it off and his record pretty much makes everybody suspend disbelief.

Well Carter was the (none / 0) (#18)
by Socraticsilence on Thu Jan 21, 2010 at 11:09:03 AM EST

last Dem president, heck major canidate that wasn't a major corporate type, at the very least Obama can probably sell a roll-back of the Bush-Clinton deregulations (though at least according to BTD, things like reimplementing G-S wouldn't help much).


Actually (none / 0) (#27)
by Ga6thDem on Thu Jan 21, 2010 at 12:12:01 PM EST

CLinton had more populist than Obama because he never forgot things for the middle class in what he did. Obama is complete devotee of the Univ. of Chicago Supply Side Economics ala Trickle down.


Oh please (none / 0) (#30)
by Socraticsilence on Thu Jan 21, 2010 at 01:57:52 PM EST

tell me how his aid of President Greenspan was a deep sign of concern for the middle class.


Here's some of Clinton's accomplishments (none / 0) (#31)
by jbindc on Thu Jan 21, 2010 at 02:46:37 PM EST

Yeah - it really looks conservative compared to Obama....

So tell us (none / 0) (#33)
by TeresaInSnow2 on Thu Jan 21, 2010 at 05:17:49 PM EST

how Obama is better than Clinton, then.

If you can't defend Clinton, how can you defend Obama?


I think its to early to completely judge Obama (none / 0) (#34)
by Socraticsilence on Thu Jan 21, 2010 at 05:22:56 PM EST

I also think Clinton was a decent moderate President, an Eisenhower type- that's not a knock but its also not saying he was some sort of great progressive leader- Clinton was an incredibly competent manager, not a visionary who left a strong and lasting legacy- probably Clinton's greatest lasting impact is the expansion of the EITC and federal support of SCHIP- not small stuff but not LBJ either.


The Clintons (5.00 / 1) (#35)
by Emma on Thu Jan 21, 2010 at 05:45:08 PM EST

treating gays and lesbians like real people laid the ground work for the more muscular and influential gay rights movement that exists today.


: Seriously? (none / 0) (#39)
by Spamlet on Thu Jan 21, 2010 at 11:52:33 PM EST

Gays and lesbians themselves laid that groundwork in the 1970s, and in the 1980s through ACT-UP and other direct-action organizations. I know because I was there.
Bill Clinton had his heart in the right place, I suppose, though I can't say that a lot or even any of that sentiment was reflected in policy during the Clinton years. In fact, I remember being quite pissed off about DADT.
If you think Bill Clinton "laid the ground work for the more muscular and influential gay rights movement that exists today," I must challenge that perception. As for Obama, so far his actions, not to mention his "states' rights" position on marriage equality, represent regression from the political progress made on GLBT issues.
Willie Brown, when he was speaker of the California State Assembly, and even before that. rode in an open convertible every year in San Francisco's Gay Pride March, well before the days when politicians of his ilk were routinely expected to show up. His presence was especially remarkable, and commendable, given the well-known homophobia in the African American community at that time.
Other than Willie--and, more recently, Mayor Gavin Newsom--I can't think of a single straight politician who can be even remotely credited with laying any groundwork at all for today's LGBT moveent, though maybe I've overlooked someone. (I consider elected gay officials to be products of the movement, though of course they have also been laying its groundwork.)

Clinton was forced to the right (none / 0) (#38)
by AX10 on Thu Jan 21, 2010 at 10:04:59 PM EST

after the congress was lost.
The Blue Dogs didn't help him in his first year though.


Paul Volcker is a good start, (none / 0) (#14)
by KeysDan on Thu Jan 21, 2010 at 10:55:06 AM EST

but just that. A whole new economic team is needed; Summers, Geithner and Bernake did what they could do to staunch the arterial bleeding (not so good at prevention, of course), and now it would be wise to unload all of them. The ideas of Professor Stiglitz (who was right on most scores) and the 'old' Professor Krugman are needed now, more than ever. Peter Orzag should be required to stick to his forte, numbers crunching, and stay away from health care. Moreover, the health care economists such as Ezekiel Emmanuel and Jonathan Gruber should be jettisoned, pronto in favor of those who have some practical sense of health care delivery and the realities of cost efficiencies in the area.

I'm missing something here, Won't the (none / 0) (#15)
by oculus on Thu Jan 21, 2010 at 11:03:05 AM EST

SCOTUS decision make even more corporate funds available for political campaigns? And haven't the Dems. already proven they will grovel for any such money?

They will be overwhelmed (none / 0) (#16)
by Big Tent Democrat on Thu Jan 21, 2010 at 11:07:59 AM EST

Not an option imo.


: Based on election of Scott Brown? (none / 0) (#17)
by oculus on Thu Jan 21, 2010 at 11:09:02 AM EST

Missing even more ... (none / 0) (#19)
by jmacWA on Thu Jan 21, 2010 at 11:09:08 AM EST

I cannot figure out how an organization that originally went by the name Citizens United Not Timid (think acronym here), even gets through the door of the supreme court.

Hopefully someone can correct me and tell me that these are two different Citizens United organizations.


Because (none / 0) (#20)
by jbindc on Thu Jan 21, 2010 at 11:10:15 AM EST

Thomas is on the court?


There are two different (none / 0) (#22)
by Socraticsilence on Thu Jan 21, 2010 at 11:18:36 AM EST

orgs- The vulgar one was basically formed as a one note conservative epithet to Hillary's 2008 campaign, the other is a lapdog of industry which essentially fights for the civil liberties of massive corporations.


: Thank you (eom) (none / 0) (#23)
by jmacWA on Thu Jan 21, 2010 at 11:20:03 AM EST

Yes (none / 0) (#21)
by jbindc on Thu Jan 21, 2010 at 11:11:30 AM EST

So instead of the billions poured into campaigns, like in 2008 (by supposedly "little" voters - yeah, right), we could foreseeably see trillions spent on presidnetial campaigns in the near future.


: Partly funded by (none / 0) (#37)
by BackFromOhio on Thu Jan 21, 2010 at 09:05:41 PM EST

John Q taxpayer.

From the BBC (none / 0) (#24)
by CST on Thu Jan 21, 2010 at 11:31:29 AM EST

"Mr Obama has proposed a raft of new regulation but it has been held up in political wrangling in both the Senate and House of Representatives.

"If these folks want a fight, it's a fight I'm ready to have," he vowed."

It's about time. Emphasis mine. Link

: Beleive it (none / 0) (#25)
by jbindc on Thu Jan 21, 2010 at 11:33:20 AM EST

when I see it.
"Just words"
Indeed.

Supreme Court Lifts Veil (none / 0) (#26)
by Orwell on Thu Jan 21, 2010 at 11:44:54 AM EST

The Supreme Court did not do the Democrats any favors whatsoever by lifting bans on how and how much money can go toward political contributions and ads. These fund will now be more clearly reported and the voters will get an opportunity to see all details and amounts and from where they actually come. So, when SEIU or big banks donate the hundreds of millions or run crazy ads...the voters will notice. Heck, most people would like to know how Obama raised so much money with the restrictions that were in place and the smart money is that it was not from small online donors as claimed!

In the current air of discontent...this is likely to turn voters off. It will also drive home who is bought and who is sold. The Democrats were better off with all the crazy shell PACS and corps then to have out in the open.

Level the playing field. Pie = Speech. (none / 0) (#28)
by Ben Masel on Thu Jan 21, 2010 at 12:27:59 PM EST

One well placed pastry can negate the effects of $1 million in crappy ads.

: If a candidate (none / 0) (#29)
by jbindc on Thu Jan 21, 2010 at 01:05:48 PM EST

Gave me chocolate silk pie instead of 10 robocalls and 37 flyers and 152 commericals - I'd probably vote for him/her!

More on bank reform (none / 0) (#32)
by CST on Thu Jan 21, 2010 at 02:55:29 PM EST

from bbc.

Key Exerpts:

"Banking reforms do not come bigger than those proposed today by President Obama."

"In simple terms, he wants to prevent banks from taking speculative risks to generate colossal profits, while knowing that if their bets go wrong taxpayers will pick up the bill."

"condition for implementing such a radical plan was that it needed international agreement.

So he (George Osborne) has told me - explicitly - that a Tory government would impose an identical dismantling of British banks to those suggested by President Obama."

Emphasis mine. This could be very big. Let's see if it happens. I wonder what Geithner thinks of it all...

Per Newt Gingrich on NPR (none / 0) (#36)
by oculus on Thu Jan 21, 2010 at 07:14:09 PM EST

SCOTUS opinion will benefit middle class, which is at an extreme disadvantage compared with those ?rich people" who contribute to MoveOn.org.