No one in a position of authority in our government today seems to understand fully the threat to American institutions and ideals represented by the untrammeled clout the financial industry now holds permeating the halls of government through the power of influence and money. We are barreling toward a destabilizing schism in our society where one interest group, the finance world and its allies, are running the nation to their own economic benefit, oblivious of the pain and loss being endured by their fellow citizens on the Main Streets of our towns and villages and the neighborhoods and tenements of our cities
Our president, whose objectives are certainly sincere, has surrounded himself with men whose formation and ties run deep into the culture of Wall Street -- be it his Chief of Staff William Daley, formerly Midwest Chairman of JPMorgan Chase; Treasury Secretary Timothy Geithner, Former Chair of the New York Fed, or Gary Gensler, Chairman of the Commodity Futures Trading Commission and former Goldman Sachs partner -- while consulting freely with Warren Buffet, that champion of and investor in Goldman Sachs. In many ways very little has changed from the previous administration when the Treasury and virtually all government agencies responsible for financial oversight were in some manner beholden to Wall Street houses and banks, and when the crunch came in September 2008 it was their "club" members who were bailed, while the rest of the country sank into a miasma of recession and unemployment. As Sheila Bair was quoted in the New York Times Magazine saying to Joe Nocera: "You know, Wall Street barely missed a beat with their bonuses. Isn't that ridiculous?
In the last years, as our government became a vassal to Wall Street's influence, two government officials stood steadfast in support for the general public's welfare in the face of policies blatantly preferential to financial interests. One was Elizabeth Warren, who was instrumental in creating the Consumer Financial Protection Bureau and currently the leading candidate to become the Democratic contender in the Massachusetts Senate race to challenge Scott Brown. Only this week Warren was lauded in an editorial in the New York Times, "Elizabeth Warren's Appeal", stating:
Ms. Warren talks about the nation's growing income inequality in a way that channels the force of the Occupy Wall Street movement but makes it palatable and understandable to a far wider swath of voters. She is provocative and assertive in her critique of corporate power and the well-paid lobbyists who protect it in Washington, and eloquent in defense of an eroding middle class.Along with Elizabeth Warren there was Sheila Bair, the recently retired Chairman of the Federal Deposit Insurance Corporation, a moderate Republican and holdover from the Bush Administration who fought tooth and nail both under Bush and Obama against the clubhouse cabal that had taken over the fiscal soul of the nation. Elizabeth Warren's destiny is predetermined. She will almost inevitably become the Democratic candidate for the Senate seat in Massachusetts, while a political trajectory beyond the Senate is foreclosed in this election cycle, given that President Obama inevitably will be anointed as the Democratic standard bearer in 2012. Of course, that goes to the guts of the problem. No one in current cast of candidates who is running a serious campaign for President in 2012, Democrat nor Republican, will meaningfully change the status quo and bring the all powerful financial community to heel. The issue is exemplified by the current Republican front-runner Mitt Romney, who already boasts having garnered significant level of Wall Street donations and is a creature of Wall Street himself -- having been a principal of Bain Capital, an entity specializing in financial engineering, helping to take over companies and then to reimburse themselves for the capital borrowed selling the acquired company's assets, all too often laying off staff that had built these companies over decades and in many cases moving the manufacturing equipment and facilities offshore to places such as China or to Mexico. Forever focusing on the bottom line and/or price of the stock, with only limited societal considerations of what these changes would do to the lives of those impacted. One need only drive through the hollowed out manufacturing towns of New England and the Midwest or the South to see the devastation that the likes of Bain Capital and their brethren on Wall Street have helped to bring about. For the Democratic Party it will be more of the same. The Obama Administration has been unable to abate the power and influence of the Financial Industry brought to bear on them. The president has surrounded himself with staff and appointees whose ties to Wall Street are first and foremost. Succinctly with a touch of street cred, it is expressed in the Zuccotti Square signage photographed just over a week ago:
So, as things have evolved and are evolving there will be no change with the next election cycle. It will be more of the same, more disappointment, more anger, more of a bifurcated society. And yet, and yet, there is something astir, something that has changed. Those who are angry and feel themselves disenfranchised have found a voice that goes beyond the influence of the few and their K Street lobbying hires, and is beginning to speak for a majority of Americans. It is the men and women from all walks of life joining to 'Occupy Wall Street.' They have gathered and marched peaceably to have a voice, and that voice is beginning to be heard. Perhaps it is the moment to confront the many issues head on saying not only enough is enough, but that we want a hand in forming a government that speaks for most Americans, because the system as currently constituted has failed us. Given the prospective candidates for the election to come, the system will continue to fail us.
With the Elizabeth Warren candidacy foreclosed for the reasons mentioned above, the OWS might do all of us, and itself, great service by focusing on Warren's equally competent and kindred spirit, Sheila Bair. Bair, the Kansas transplant to Washington, is a woman of extraordinary competence having received the following accolade from the Wall Street Journal earlier this year: "Sheila Bair, who is stepping down as Chairman of the FDIC this week, leaves behind an agency transformed from a sleepy bank overseer into a financial regulatory powerhouse focused on preventing another financial crisis".
Further, in spite of the massive opposition ranged against her she was able, in her final FDIC meeting, to institute a rule allowing the government to recover compensation from the executives responsible for the financial firm's collapse. No such foresight from the White House entourage either under Bush, nor Obama, which would have altered the dynamic of accountability for the financial disasters to come.
In 2006 Bair began sounding the alarm about the dangers posed by the explosive growth of subprime mortgages, and found herself in confrontation with then Treasury Secretary Henry Paulson and New York Federal Reserve President Timothy Geithner. Significantly she was a lonely voice subscribing to a market discipline holding to the principle that shareholders and debt holders should take losses ahead of depositors and taxpayers. Tough minded and straight forward, "Our job is to protect bank customers not banks." True to form, Geithner, in full Wall Street mode, wanted the Bair's F.D.I.C to guarantee all debt issued by bank holding companies (the likes of JPMorgan Chase, Goldman Sachs, Morgan Stanley). Sheila Bair blocked Geithner by standing her ground and responding with an intractable NO!
Bair was clear about her displeasure that the government, by acting as if it was no one's fault, placing no responsibility where it should have been placed. She was a stalwart fighter for mortgage modifications that would help homeowners and as Nocera would point out in his New York Times profile, "what particularly galls her is that the Treasury under both Paulson and Geithner has been willing to take all sorts of criticism to help the banks but it had been utterly unwilling to take any political heat to help homeowners."
Most tellingly, Bair was dogged in her defiance and was quoted "We always saw ourselves as the champion of the little guy. The other regulators never saw a bank closure... We were the ones that saw people losing their jobs when we shut down a little bank. They never understood the unfairness of the way little banks were treated versus the big banks...I've always thought it was really important for everyone to have to play by the same rules."
This summer I personally had the good fortune to hear Bair speak at the Aspen Institute. She was lucid, forthright, without hyperbole, conveying a sense of reasoned indignation felt by too many of us, by the unfairness of the present structure. Where we as citizens, no longer feel able, through our elected officials, to stem the influence, the systematic 'Heads I win, Tails you lose" of our financial institutions and their growing impact on the functioning of our society, effectively touching upon our disillusion and anger.
Given the moral and financial crisis the nation finds itself in, and the untrammeled power and access of financial institutions to the seats of power, would it not be best for all of us to have someone in the White House who understands the game and has fought hard and willingly to level the playing field.
Therefore my plea to the new voice in the American landscape, in American politics, the newly huddled and outraged masses from all walks of American Life the 'Occupy Wall Street' protestors-:
OWS, men and women of good will, you now have a voice and the nation will listen, as will many Republicans, disenchanted with the current roster of candidates, as will Democrats and Independents alike. OWS can make a real difference and bring our government back to where it needs to be before being hijacked by Wall Street and special interests of every ilk. If you succeed you will have rendered the nation an enormous service in helping to salvage a system of governance that, until the last few years, had been an inspiration to virtually all of us, and which we passed on to future generations with pride
One last point, isn't it long past due that we had a woman in the White House with a 'power broom' to sweep it clean from top to bottom?!
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