Dems Look to Wall Street Occupation to Match Tea Party Outrage
“I think people are frustrated, and the protestors are giving voice to a more broad-based frustration about how our financial system works.”
-- President Obama when asked by a New York Times reporter at a press conference what he would say to “people [who] are attracted” to the Occupy Wall Street protests.
In March 2009, President Obama told the heads of what were then the 13 largest banks in the United States at a White House meeting: "My administration is the only thing between you and the pitchforks."
His warning, disseminated by a White House leaker via Politico, was that the bank CEOs should not try to rationalize why they should be allowed to pay large salaries to their executives after receiving bailouts, even those who did not want to participate in the bailout program.
“Be careful how you make those statements, gentlemen. The public isn’t buying that,” Obama reportedly said.
The pitchforks never materialized back then. The closest thing to a peasant revolt that happened in those days was the Tax Day Tea Parties of that spring, but it was fat cat politicians, not bankers, who were at the pointy end of their tines.
But Democrats, including the president seem hopeful that a combined effort by government-worker unions, student organizations, and liberal activist groups collectively known as Occupy Wall Street will add the same populist zeal to the left that the right has been benefiting from for three years.
At his press conference Thursday, the president sympathized with the protesters and student strikers as human manifestations of national frustrations with banks. Democrats said the Tea Party experience was a result of high unemployment and gullible individuals being manipulated by conservative groups, but say that this movement is an authentic expression of frustration with bankers.
Speaking of the protesters at a press conference following Obama’s, House Minority Leader Nancy Pelosi gave more explicit encouragement:
“God bless them for their spontaneity,” Pelosi said. “It's independent ... it's young, it's spontaneous, and it's focused. And it's going to be effective.”
After offering to protect banks from a populist uprising, Democrats are now encouraging a populist uprising against banks. How did Democrats end up here?
Go back to the early days of the Obama presidency. The legislation that the president promised would end the days of big, bad banking ended up formalizing the concept of “too big to fail,” lessening competition and creating exactly the kind of regulatory thickets that large institutions love because they hinder smaller rivals and still provide alternate paths to profit.
Stung by criticism on his left that he and the principle authors of the bank bill, Sen. Chris Dodd and Rep. Barney Frank, had actually protected the fat cats Obama once promised to skin, the president embraced liberal icon Elizabeth Warren as the woman to build a new agency to regulate consumer lending after the law was already passed in 2010. When she moved back to Massachusetts to oppose Sen. Scott Brown in next year’s election, Obama picked a Warren acolyte, former Ohio Attorney General Richard Cordray, to be the boss of the new agency.
Cordray made is fame in the anti-fat-cat movement by being the leader of the lawsuit that temporarily stopped banks from booting delinquent borrowers because banks had been doing auto-pen signatures on foreclosure notices rather than having human beings pondering each case. There was no allegation that people were being wrongly foreclosed on, only that the letter of the law had not been followed.
While the suit, which was boosted by the Obama administration, slowed the foreclosure pace last year, it has also prolonged the pain of the housing collapse as lenders have been unable to clear out low-priced foreclosed homes, which are always a drag on the market. That retarding has helped cause the longest, deepest slide in home prices since the days of the dust bowl.
Another consequence of Obama’s belated embrace of crusaders Warren and Cordray, though, has been to signal banks that now is not a good time to be making a lot of loans. With the economy looking stagnant at best and a new agency making lots of new rules about how and where money can be lent, banks have trimmed their sales and are riding out bad weather.
Consider Bank of America. The firm got big bailout money from the federal government at the start of the Obama administration and then had to clear its management team with the White House. As the bank continued to teeter years after the initial panic, Obama ally Warren Buffett was brought in with an infusion of cash and confidence.
But after all that, the bank is still laying off people by the tens of thousands, hoarding cash and inventing new fees for its already squeezed customers to pay for the costs of new regulations.
So Obama went softer on banks than his base urged him – they wanted to see Obama busting up the largest institutions and prosecuting the financiers who inflated the bubble that resulted in the Panic of 2008 – but still ended up with the frozen capital markets and pass-along costs for consumers he sought to avoid in the first place.
Interest rates are lower than they have ever been, but anxious Americans have little interest in lending or borrowing money until the current turmoil passes.
Part of the reason the Obama Democrats are standing up for the anti-bank protesters is the same reason that many establishment Republicans suddenly got libertarian religion after the Tea Party movement began: better to be leading the parade than getting stepped on.
And with Obama’s re-election prospects continuing to darken, he and his team are preparing for a very ugly base-versus-base election -- the Tea Party versus the activist left – in hopes that moderate voters will either stay home or decide to not change horses at a time of unrest.
This is the national version of what we saw in Wisconsin early this year when government workers occupied the state house in Madison in an effort to stop legislation that stripped their groups of the power to strike. The Democratic senators fled into Illinois, the Obama campaign helped organize the early protests and government unions across the country expressed their solidarity.
But as the scene deteriorated, Obama opted to rise above the fray, and rather than joining the march, he lamented from afar the divided, rancorous nature of the national political discourse.
The Occupy Wall Street movement, if unions and activist groups can sustain it, would give the president the chance to balance the scales of outrage and simultaneously present himself as a centrist to voters.
What Wasn’t Asked of Obama
“And what I’ve done over the last several weeks is to take the case to the American people so that they understand what’s at stake.”
-- President Obama answering a question about the condition of the economy and his stimulus and tax increase package.
Lots of news outlets didn’t get to ask President Obama a question at Thursday’s 72-minute press conference, including the nation’s dominant cable news network.
The president, who seemed listless, filibustered his way through questions often posed by reporters who were speechifying rather than trying to get direct answers. The press was a bit surly, but couldn’t seem to land any blows on the unpopular president who had come to sell his stalled stimulus package.
Obama didn’t have to answer any factual challenges on the scandals facing his administration over a questionable loan to a solar panel manufacturer, a gunrunning sting operation or allegations that a general was pressured to change his testimony to protect a politically connected telecommunications firm.
Reporters mostly wanted to discuss the topic the president had chosen: his proposals for boosting the economy.
But even in that vein, there was one key question that wasn’t asked of the president: Why aren’t voters behind you. MSNBC’s Chuck Todd came close with a question he crafted with the Washington Post’s Chris Cillizza about whether Obama still has “the juice” with Senate Democrats to move legislation. It’s a question that goes to the bad relations between the White House and the president’s party on the Hill that dates back to the first stimulus package. Relations are worsening as Obama continues to falter with voters, but the real question is about what Obama plans to do since voters aren’t helping him make good on his threat to take the case to the American people.
Power Play suggests that the following would have been more effective:
“You’ve been out in swing states selling your package for a month and your approval rating with voters has dropped, especially on the economy. In a Quinnipiac poll out today, disapproval for your job performance has reached a new high of 55 percent. Sixty seven percent said that the economy would either worsen or stay the same if you were re-elected – all measurably worse since you started this push. You said you’d take your case to the people, Mr. President, why aren’t they listening to you?”
And Now, A Word From Charles
"On one hand, you get the sense that he was droning on, he was speaking in a way I found incredibly dull. Almost disinterested. And you get the feeling of a sinking, contracting presidency. The one time he got sort of energetic is when he went into attack mode. I think his main argument -- it’s rather odd – it’s as if he hasn’t been president for the three years he’s been president.”