Breaking Up With the GOP. A White Boy’s Lament.

After the election we were determined to contribute something meaningful to the pantheon of political discourse in America. To inspire other white guys who wondered, “what the fuck happened to the Republican Party?”

After election season, sickened by the toxic atmosphere we soaked in during an endless campaign of lies and betrayal of our ideals, my friend Billy and I pondered over the demise of the Republican Party. Personally, I grew up a Republican, believing in the mythology of our two-party system and living under the illusion that American governance resembles democracy. There were Republicans all around and they seemed like lovely people, so I blithely went about my business believing that I was a Republican as well. Monkey see, monkey do.

Billy is far more cynical and savvy. A street smart kid from Brooklyn, he has a keen ability to read between the lines. He’s skilled at the art of pantomime, reading people like tarot cards and “calling bullshit” frequently. I’m more philosophical, and am skilled at the art of politics. I believe that politics is indeed a bloodsport and I’m game to play all day, every day. Billy believes life is bloodsport and he too is game. He indulges my ramblings on the death of empire, the evils of inequality and importance of civil rights and he makes me listen to the Afghan Whigs and Mos Def.

After the dust settled from the election we were determined to collaborate on an important political project. To contribute something meaningful to the pantheon of political discourse in America. To inspire other white guys who wondered either privately, or aloud, “what the fuck happened to the Republican Party?”

So we recorded what you kids would call a “rap.”

(My wife wrote and performed the chorus. She has regretted it ever since.)

Lyrics:

I’m a white man. I’m your prime demographic.
Used to vote “R” down the line, just out of habit.
But I started listening, then I started thinking.
How did we get so far from the party of Lincoln.

TEDDY ROOSEVELT! Rolling in his grave.
He’d be very disappointed in the way that you behave.
You pushed me away more than you realize,
Voted for Obama (TWICE!) cuz I’m disenfranchised.

You wanna bring together your church and my state?
When your church says deliver even in the case of rape?
Legitimate rape? There’s a difference?
Go sell your hate somewhere else and focus on your own sins.

Chorus:
Liberty. Democracy. Made for you and me. Oh say can you see.
Liberty. Democracy. Made for you and me. Oh say can you see.

This republic can overcome Republicans
who say the rights of a women ain’t equal to a man.
FREEDOM OF SPEECH! IT’S THE FREEDOM TO TEACH!
To reach out and speak out these truths that we seek.

And these truths? They’re self evident.
Two hundred thirty years now we got a black president.
THAT’S CALLED PROGRESS, SON. Overcoming race.
Content of character, not color of face.

Cash from the Koch Brothers, Citizens United
Yeah we one nation, NOW WE DIVIDED
Footsie with Monsanto, taking care of Big Oil
Loopholes and tax breaks on the backs of the poor. COME ON!

Chorus

White upper middle class Republican.
But now these feelings come to pass.
And Occupy she’s got a sexy ass
So now I’m looking down a different path
It’s time for me to let my old earth go
I grab my thoughts and then I’m out the door
My heart pump truth and needs to keep it real
With a party that cares how people feel
So one last time before I walk on out
Silent middle finger I don’t need to shout

CLIMATE CHANGE IS REAL. Tyrannosaurus roamed the earth.
There was life on the planet before Jesus’ birth.
Locking up Latinos, yell “Illegal Immigration”
And conveniently forget this was an Indian nation. WE STOLE IT.

NOTHING GRAND ABOUT THIS PARTY
Yo, rescind my invitation.
I’ll take Elizabeth Warren.
Ya’ll can keep Sarah Palin.

 

 

 

Wall Street Regulation

Glass-Steagall has made somewhat of a comeback with help from the Occupy movement and rising political stars like Elizabeth Warren… The only two political insiders you won’t catch talking about reinstating Glass-Steagall both happen to be running for president.

Part 4 of the Special “Off The Reservation” Election Series in the Long Island Press.

The Banking Act of 1933, commonly known as Glass-Steagall, was established to tame the harmful speculative behavior of an industry run amok in the early part of the 20th century; behavior many observers at the time credited for the market crash that precipitated the Great Depression. For some, the repeal of Glass-Steagall, by the Gramm-Leach-Bliley Act of 1999, was the deathblow to financial prudence on Wall Street.

 In reality it was simply the formal recognition of careless financial practices that were largely in place already. Since the near-collapse of the banking industry in 2008, Glass-Steagall has made somewhat of a comeback with help from the Occupy movement and rising political stars like Elizabeth Warren, the former federal consumer protection advocate now running for Senate in Massachusetts. The only two political insiders you won’t catch talking about reinstating Glass-Steagall both happen to be running for president.

Wall Street reform is as important as it was in 2008 but both President Obama and Gov. Mitt Romney have taken great pains to avoid talking about it too much. For his part, President Obama seems content to rest on the laurels of the Dodd-Frank Act, Congress’s attempt to rein in Wall Street excess, which had enough support to pass but not enough to be properly funded or enforced. According to Romney’s platform, he would “Repeal Dodd-Frank and replace with streamlined, modern regulatory framework.” That’s the extent of his vision for the future of Wall Street according his platform. Ten words.

So while the rest of the country is suddenly talking about a law enacted almost 80 years ago, these guys aren’t going anywhere near it. The truth is, Wall Street reform and, more specifically Glass-Steagall, is more complicated, making it easy for Obama and Romney to be evasive.

So let’s answer two questions. What would actual Wall Street reform look like and what exactly was Glass-Steagall?

The purpose of the original act was to establish a barrier between traditional banks and the risk-taking investment firms, denying investment banks access to consumer deposits and secure, interest-bearing loans. The unwritten effect of Glass-Steagall, however, was to establish a culture of prudency in the consumer and business banking realm, leaving sophisticated professional investments to more savvy financiers who had the ability to calculate the inherent risk of a financial instrument. For decades to follow, the merits of Glass-Steagall would continue to be debated, but it nevertheless drew a marked distinction between the function of a consumer bank and an investment bank.

Today reinstating Glass-Steagall is a common rallying cry among those who decry the bad behavior of Wall Street. Its repeal has become the fulcrum of nearly every debate surrounding deregulation. Actually accomplishing this, of course, is easier said than done.

The best way to reconcile the debate over whether to reinstate Glass-Steagall is to appreciate that the culture of Glass-Steagall was more important than the act itself. Over time the restrictions placed on bankers under the act were chipped away, but the culture that governed the banking industry endured beyond its measures. Eventually, savvy bankers and politicians found ways to loosen its screws and interpret the act to their own benefit.

Don’t Just Blame Republicans

In 1978, President Jimmy Carter oversaw the passage of the International Banking Act, a bill that should probably receive as much, if not more attention than Gramm-Leach-Bliley. Essentially, the act allowed foreign banks or entities that engaged in “banking-like activities” to participate in domestic financial markets. For the first time, foreign investment firms were able to make competitive loans so long as they didn’t compete for consumer deposits; initially individual states could determine whether their regulatory structure could support this new activity. The government would go on to loosen restrictions governing the competition for consumer deposits and allowing bank holding companies to treat money markets like checking accounts.

In his book “End This Depression Now,” economist Paul Krugman argues that perhaps the most influential step with respect to the banking sector came with Carter’s passage of the “Monetary Control Act of 1980, which ended regulations that had prevented banks from paying interest on many kinds of deposits. Unfortunately, banking is not like trucking, and the effect of deregulation was not so much to encourage efficiency as to encourage risk taking.”

 By 1987 the bank holding companies, including foreign companies allowed to operate within the U.S. banking system, were granted access to mortgages to create a package of investments called mortgage-backed securities; the threshold for the amount of investing activity in instruments such as these was also increased, paving the way for the growth of investments backed by the strength (or weakness) of the consumer market.

During that same year, members of the Federal Reserve began calling for the repeal of Glass-Steagall as then-chairman Paul Volcker was providing the tie-breaking resistance. But this was a mere formality because by this time, Glass-Steagall was effectively over.

Yet even though most of the threads of regulation had been pulled from the overcoat that protected consumers from risky banking practices, the culture of prudent banking still existed to an extent; maintaining the Glass-Steagall Act on the books was an indication of this sentiment. Throughout the decades when regulations were steadily eroding, powerful national figures such as Paul Volcker under Carter and Reagan, and Treasury Secretary Nicholas Brady under George H.W. Bush managed to temper the enthusiasm of the movement.

That George Bush Senior heeded their admonitions was an admission that the public’s appetite for deregulation was actually beginning to wane in the post-Reagan hangover. Richard Berke’s New York Times article of Dec. 11, 1988, on the eve of the Bush presidency, encapsulated this feeling. Berke wrote, “Lawmakers and analysts say the pressure is fed by a heightened public uneasiness about deregulatory shortcomings that touch the daily lives of millions of Americans: from delays at airports and strains on the air traffic control system to the presence of hazardous chemicals in the workplace to worries about the safety of money deposited in savings institutions.” Alas, these four years would prove to be a momentary hiccup in the deregulation movement.

During the Clinton years, the nation’s leadership was largely comprised of proponents of deregulation. In fact, by his second term, Clinton was almost entirely surrounded by rabid free market enthusiasts. A former chairman at Goldman Sachs, Robert Rubin, was Secretary of the Treasury, Alan Greenspan was still at the helm of the Federal Reserve and Phil Gramm was the head of the powerful Senate Banking Committee. All of these men had close ties to Wall Street and made no secret of their intention to release bankers from the burdensome shackles of regulation and oversight.

Reforming Reform

In 2008, economist Joseph Stiglitz warned of the enduring negative consequences of deregulation. At a hearing held in front of the House Committee on Financial Services, Stiglitz invoked Adam Smith saying, “Even he recognized that unregulated markets will try to restrict competition, and without strong competition markets will not be efficient.” One of Stiglitz’s solutions was to restore transparency to investments and the markets themselves by restricting “banks’ dealing with criminals, unregulated and non-transparent hedge funds, and off-shore banks that do not conform to regulatory and accounting standards of our highly regulated financial entities.”

For emphasis he noted, “We have shown that we can do this when we want, when terrorism is the issue.”

Still, the nagging question remains as to what reform might look like. After all, not all deregulation is irresponsible. Most of the discussion in the media surrounding deregulation revolves around the concept that our banking institutions are “too big to fail.” Thus the rallying cry for reinstating Glass-Steagall and separating banks from investment banks. I’m in tepid agreement with the underlying principle, but the reality of the situation is far more complicated. The fact is banking has gone global and the deregulation genie is out of the bottle.

As I said earlier, Glass-Steagall was as much about instilling a culture of prudency to the banking world as it was about erecting a barrier between commercial banks and investment banks. Advocates like Elizabeth Warren like to say that prior to 1999 and the repeal of Glass-Steagall, the economy functioned through periods of both prosperity and recession since 1934 without the banking sector once collapsing. It’s a fair, but oversimplified assertion that overlooks the fact that Glass-Steagall was on a ventilator in 1978 and dead by 1980. A 30-year run of prosperity from 1978 to 2008, with a few brief recessions in between, is nothing to sneeze at.

Restoring balance to the banking sector does not necessarily require separating the banks. Not yet at least. It begins with transparency and reestablishing the culture of prudency that has been conspicuously absent over the past decade. After all, you cannot value what you cannot see; nor can you mitigate risk unless you first manage reward.

What this really boils down to is accountability, which is ultimately a behavioral issue. Allowing investors to actually see how a bank behaves by viewing the size and scope of their transactions would theoretically assuage their appetite for risk. Given these conclusions, it’s easier to make the case that our current president would provide more accountability and inspire behavioral changes on Wall Street, particularly given Romney’s intransigence when it comes to considering financial reform. But tough talk against Wall Street has all but disappeared from Obama’s rhetoric leaving little hope that a second term will elicit any further positive change. So this week, while neither man seems serious about financial reform, the status quo is better than further deregulation and letting bankers rule the roost.

Tie goes to the incumbent.

Women’s Intuition

When you examine the litany of geniuses who wrought havoc in the markets in their profligate quest for unmitigated deregulation, you’re hard-pressed to find the fairer sex among them.

On the 18thday of the Occupy encampment at Zuccotti Park, I paused to photograph a curious scene. An older man with a tight gray beard was leading an unlikely group in an acoustic rendition of Bob Dylan’s “Blowin’ in the Wind.” People of every age and background, from a family with young children to a construction worker, had gathered on the steps leading to the area of the park known as “The People’s Library” to join in song. The only giveaway that I hadn’t accidentally stumbled through a wrinkle in time and landed sometime in the 1960s was that nearly everyone was recording the moment with a camera phone.Midway through the song, our musical guide abruptly stopped the music to address the ragtag bunch before him. “Why are there no women in this song?” he pondered aloud, with his guitar dangling from its strap and his arms spread wide. “Because men are responsible for screwing it up.” Before continuing with the song he proclaimed, “Let’s hope there are more women in power so we can have more humane decisions.”This scene was only one of several captivating pockets of Zuccotti Park, and my attention was soon drawn elsewhere. Weeks later when reading a piece about celebrity influence in the Occupy movement, I noticed a picture similar to the one I had captured on the steps that day. As it turns out, the gentleman serenading the group was Peter Yarrow of Peter Paul and Mary fame. Two things immediately occurred to me. The first was that Yarrow questioning Bob Dylan was beyond rhetorical, as he probably could have asked him directly.  (Dylan wrote “Blowin’ in the Wind,” but it was Peter Paul and Mary who first recorded it.)

The second thing that came to mind was that my friend and former editor-in-chief of the Press, Robbie Woliver, would be gravely disappointed in me for not recognizing Peter Yarrow and grasping the significance of the moment; a realization that was made clearer to me in researching the origins of the song. As it turns out, the first public performance of “Blowin’ in the Wind”—it would become one of the seminal anthems of the ’60s protest movement—was at Gerde’s Folk City in 1962. Robbie and his wife, Marilyn Lash, co-owned Folk City for several years in the 1980s.

Yarrow’s timely reappearance at Occupy Wall Street underscores the similarity between the anti-establishment, anti-corruption sentiment of the 1960s and today. Further, his comments regarding the negative male influence in world affairs are perfectly in context with the situation on Wall Street. When you examine the litany of geniuses who wrought havoc in the markets in their profligate quest for unmitigated deregulation, you’re hard-pressed to find the fairer sex among them. Sure, there are stand-outs such as Wendy Gramm, but even in her case it can be argued that her depravity pales next to that of her husband. As the saying goes: Behind every terrible woman is an asshole. (Or something to that effect.)

History is replete with examples of men behaving badly to the detriment of civilization. Citing women as the reason for some of our bigger peccadilloes—Helen of Troy causing the Trojan War, Eve getting us all kicked out of the Garden, yada yada—is a favorite device of the male historian. Leading up to and during the financial meltdown, omniscient wizards such as Larry Summers, Alan Greenspan and Robert Rubin eschewed the warnings of women like Brooksley Born, head of the Commodity Futures Trading Commission from 1996 to 1999, and continued their blitzkrieg of destruction. These guys keep breeding more insufferable free market ideologues like Tim Geithner, who fought Sheila Bair, head of the Federal Deposit Insurance Corp. from 2006 to 2011, who railed against the concept of “Too Big to Fail.” To the free market jerkoffs like Greenspan and Geithner, Born and Bair were considered “difficult.” That’s man-speak for “tough.” Creative wordplay like this is how we men diminish effective women; better to be a bastard than a bitch in the worlds of high finance and government.

The most notable among all of these “difficult bitches” today is the earnest and brilliant Elizabeth Warren, who is running for Ted Kennedy’s old senate seat in Massachusetts against fluke incumbent Scott Brown. The funny thing about that race is that for Warren, this seat is actually a consolation prize from President Barack Obama. After leading the fight to create and organize the Consumer Financial Protection Bureau, Warren was the presumptive nominee to head the agency upon its formation. Shockingly, however, the POTUS buckled under pressure from Senate Republicans, who threatened to block a Warren appointment, and instead he installed the even more hardcore and controversial Richard Cordray to the position under a recess appointment.

While I might not be able to spot one of the world’s most famous folk singers even when he’s performing one of his biggest hits in front of a crowd at a demonstration (it’s even worse when put that way, isn’t it?) I do have a keen sense of irony and a dark sense of humor. It’s why I can appreciate that while my gender has driven the world’s economy in the ground, they did so in pursuit of an ideology set forth by a woman. Somewhere in hell, Ayn Rand is doubled over with laughter watching obsequious and dim-witted men like Alan Greenspan trip over themselves in an attempt to become the Howard Roark of finance or John Galt incarnate. Ayn Rand is the Helen of Troy of the economy, the Eve of financial catastrophe, the…

(Did ya see what I did there?)

Time to Chuck Schumer

Chuck Schumer is the honey badger of legislators. He devours campaign cash, microphones and anything else to advance his vainglorious cause. Or, as the narrator in the now-infamous badger video says, “Honey badger don’t give a shit, it just takes what it wants.”

As Long Island Press readers may have gathered by now, brevity is not my strength. And, admittedly, my more interminable diatribes have been known to prompt eye rolling, even from those who love me. Therefore I shall be as efficient as possible in conveying this important political message:

It’s time for Sen. Chuck Schumer to move on.

Chuck Schumer is the honey badger of legislators. He devours campaign cash, microphones and anything else to advance his vainglorious cause. Or, as the narrator in the now-infamous badger video says, “Honey badger don’t give a shit, it just takes what it wants.”

Schumer’s patented move of holding a Sunday press conference in order to glom Monday morning headlines has become a long-running joke in Washington, and yet the media continue to cover every one of his self-serving events. Frankly, starting the week by opening up the daily newspaper only to see Chuck’s mug has become tiresome and insulting. Rarely, if ever, do these photo opportunities translate into anything tangible. Don’t get me wrong, there is frequently a bill or resolution spawned from Chuck’s press conference of the week, but most are dead on arrival with a pitiful few ever being referred to committee.

Those that do get there are largely perfunctory resolutions naming things like post offices or commemorating individuals. More importantly, not one of the bills proposed by Chuck since the financial collapse in 2008 had any effect on the financial services industry to which he answers. In fact, since the implosion of the financial sector he has successfully guided only seven pieces of legislation through Congress. Three of them were to re-name buildings and one had to do with the handling and archiving of FDR’s memorabilia. Not one of the three remaining resolutions was tied to the financial industry in any way, shape or form.

Yet Schumer has reaped historic donations from Wall Street firms in large part by providing the most important service to them that he possibly can: nothing. Chuck Schumer has done nothing to stand in the way of the reckless deregulation that brought the economy to its knees; nor has he authored any reasonable solution to fix things. But behind the scenes he is the go-to guy for Wall Street and his campaign coffers are undeniable proof of his effectiveness at stymieing anything that would negatively impact the ill-gotten gains of the financial mafia.

His transition from representative to senator seems to mark the precise moment of Schumer’s Faustian bargain that now has him serving at the pleasure of many Wall Street wizards, all of whom offer their allegiance to the almighty dollar. Through this compact with the devil Schumer has emerged as the ultimate Washington insider and the head of the Democratic Senatorial Campaign Committee from 2005 to ’09, a powerful fundraising arm of the Democratic Party, where he thrived. His tenure oversaw a record number of donations funneled to the committee, most notably from – you guessed it – the financial industry.

The past few months Chuckles has been uncharacteristically quiet given the raucous events taking place down on Wall Street. In fact, the man who has made his career occupying Wall Street himself and benefitting from its largesse has precious little to say to, or about, those in Occupy Wall Street. One has to search diligently for the senator’s reaction to a phenomenon so big Time Magazine just named “the protestor” as its Person of the Year only to discover that while he defends the rights of protestors, they should “make sure they don’t get in the way of every day New Yorkers getting to and from work and going about their daily business.”

Actually, Sen. Honey Badger, that’s the point. If we continue to do nothing—the art of which you have perfected—there won’t be any daily business. This is a crisis, Chuck. One you had a pretty big hand in creating, for the record. How so? By being the world’s greatest accomplice as a member of the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Chuck was there when Congress repealed the 1933 Glass-Steagall Act, thus allowing investment banks and commercial banks to merge. He was there for the creation of the Enron Loophole in the Commodities Futures Modernization Act. And he was there when President George W. Bush allowed the Intercontinental Exchange to trade oil futures, and later swaps and derivatives, as a foreign exchange outside of the purview of U.S. regulators. Lastly, Schumer is widely credited as the guiding force behind the controversial bank bailouts. In each case, what Schumer said publicly was very different from how he acted and voted. Every scenario saw “public Chuck” peering over his spectacles and haranguing officials over minute details when in reality he was helping to turn the screw behind the scenes.

But it’s his utter silence since the banking crisis began and to a greater extent since the Occupy movement took off like a rocket that Schumer’s true colors have shown. Protestors flooded the streets of New York beginning in September, chanting phrases that have spread across the nation. Phrases such as “Banks got bailed out, we got sold out” and “Whose street? Our street!” But who sold us out exactly and who really “owns” the street? Chuck.
In between authoring legislation that never goes anywhere accompanied by a carnival sideshow of Sunday press conferences, Chuck is busy doing what he does best. In the past five years alone he has raised more than $19 million in personal campaign donations, the majority of which came from the following industries: 1) Securities & Investment, 2) Lawyers/Law Firms, 3) Real Estate, 4) Lobbyists, and 5) Miscellaneous Finance. There you have it. Chuck Schumer—man of the people.

There are only 100 of these clowns in the Senate. How did we get Bozo? This is the Empire State. Can’t we do better? Is it too late to try and convince Elizabeth Warren to move here instead?