politics for the 99%

Published on naked capitalism, by Yves Smith, March 29, 2015.

An unusually move by a thin-skinned too big to fail bank, Citigroup, to slap down the finance-skeptic faction of the Democratic party appears to be backfiring … //

… Warren fingered Citigroup’s extensive connections to the Executive branch when she fought the addition of a rider to a must-pass spending bill that would eliminate a Dodd Frank provisions to force banks to stop trading certain derivatives in taxpayer-backstopped entities (the so-called swaps pushout rule). As you’ll see below, not only did Warren have the bad taste to point out that the current Treasury secretary is a Citigroup alum, and that Sandy Weill, Citigroup chairman, had offered Timothy Geithner the opportunity to run the bank, she also said that Dodd Frank had come up short by not forcing Citigroup’s breakup. If you’ve not seen this speech, you need to watch it. You’ll understand why Citigroup is desperate to find a way to leash and collar Warren.  

Video: Remarks by Senator Warren on Citigroup and its bailout provision, 9.43 min (also on YouTube).

Even though Warren lost the swaps pushout rule battle, the ferocity of the fight, the attention it garnered, and her and her allies’ relentless focus on the bank tactic of using arcane-seeming provisions to shift risk onto the public, as well as their deep political connections, threw a wrench in the financiers’ plans. They’d hoped to roll what little post-crisis reform that took place by going after technical-seeming provisions that they assumed the dumb chump voter would never notice. Instead, Warren turned the tables by using the effort to inflict considerable public relations damage.

As much as the Warren attack might not seem like much of a victory, it’s important to understand what she and the other bank opponents are achieving. The banks count on the public not understanding and not caring about the more arcane aspects of finance, and furthermore assuming that bank reform is settled. On the political front, the power of the financiers doesn’t lie simply with their lavish campaign donations; it also lies in the perception that opposing them is a political death sentence.

And that is why Warren has become so dangerous to them. Remember that Obama brought her in to start up the CFPB in a classic “keep your enemies close” strategy. It’s a near certainty that they hoped to destroy her politically because she, as a Harvard academic with limited administrative experience, would flail about and fail in executing such a mammoth task. So they were stuck with her when she succeeded and was the obvious candidate to run the new agency. The Administration cast about for months trying to extricate itself from the mess it created, finally nominating Richard Cordray, a Warren hire at the CFPB, and enticing her with the bright shiny toy of a Senate seat.

The Administration (remember that Obama is still very much the party leader) again got too clever by half. It decided to exploit Warren as a major fundraiser. But that gave her an independent power base. And given the carnage in the Congressional midterms, the wisdom of following Democratic party dictates isn’t looking too hot for individual Congresscritters, unless they hail from conservative districts. The public is waking up to the party’s limousine liberalism, and voters who care about economic fairness are increasingly staying home on election days.

So given Warren’s ability to raise money on her own, the idea of getting the Democratic party to rein her in is sorely misguided. The real target would seem to be the other bank opponents, like Sherrod Brown and Jeff Merkley, and any other Senators or Representatives who might dare to oppose rule by Big Finance … //

(full text).

Links:

First time in 30 years’: Japan whaling ships return from Antarctic trip EMPTY, on Russia Today RT, March 29, 2015;

Change Versus Continuity In The Philippines, on ZNet (first on Richardfalk.com), by Richard Falk, March 28, 2015;

In the shadow of the moon – Spectacular plane’s view of the solar eclipse (VIDEO), on Russia Today RT, March 28, 2015;

The Senselessness of Joining in a Sunni vs. Shiite War, on Dissident Voice, by Gary Leupp, March 28, 2015: More than a billion Sunnis have simply had enough of [Shiites] – Bandar bin Sultan;

Connection Between Rigged Trade and Rigged Government, on Dissident Voice, by Kevin Zeese, March 28, 2015: A week with Wyden shows a secret fundraiser for a secretly negotiated corporate agreement; (see: Secret Trans-Pacific Partnership Agreement (TPP) – Investment Chapter, released March 25, 2015);

Something in the USA has to work right, a non-profit hospital in Virginia actually does, on Intrepid Report, by John Stanton, March 27, 2015;

US-Russian crew blasts off for record-setting one-year ISS flight, on Russia Today RT, March 27, 2015;

California Water Wars, Another Form of Asset Stripping? on Web of Debt, by Ellen Brown, March 24, 2015;

How Central Banks Harness Governments, on It’s Our Economy (first on Web of Debt), by Ellen Brown, March 12, 2015;

Video: Education and Mobilization in Contested Mexico, Situating Ayotzinapa, 23.38 min, on Socialist Project, March 18, 2015;
(uploader channel on YouTube).