Democrats and Wall Street

I've criticized Paul Krugman before. But it's usually been when he gets out of his lane and starts commenting on politics instead of economics. On the latter, he's someone I always pay attention to. And so, given the differences we've seen between Clinton and Sanders on Wall Street reform, I was interested in Krugman's take. Here's what he wrote about it today.

For what it’s worth, Mrs. Clinton had the better case. Mr. Sanders has been focused on restoring Glass-Steagall, the rule that separated deposit-taking banks from riskier wheeling and dealing. And repealing Glass-Steagall was indeed a mistake. But it’s not what caused the financial crisis, which arose instead from “shadow banks” like Lehman Brothers, which don’t take deposits but can nonetheless wreak havoc when they fail. Mrs. Clinton has laid out a plan to rein in shadow banks; so far, Mr. Sanders hasn’t.

Krugman then goes on to address the one question some liberals have about Clinton: can we trust her to actually follow through? To answer that one, he provides some history about where Wall Street donors have placed their bets when it comes of campaign contributions. He recounts that there was a time that financiers split their money pretty evenly between Democrats and Republicans.

But then came the financial crisis of 2008, and everything changed.

Many liberals feel that the Obama administration was far too lenient on the financial industry in the aftermath of the crisis...

But the financiers didn’t feel grateful for getting off so lightly. On the contrary, they were and remain consumed with “Obama rage.”

The result:

Financial tycoons loom large among the tiny group of wealthy families that is dominating campaign finance this election cycle — a group that overwhelmingly supports Republicans. Hedge funds used to give the majority of their contributions to Democrats, but since 2010 they have flipped almost totally to the G.O.P.

As I said, this lopsided giving is an indication that Wall Street insiders take Democratic pledges to crack down on bankers’ excesses seriously. And it also means that a victorious Democrat wouldn’t owe much to the financial industry.

Krugman's calm reasoning probably won't break through the narrative currently embraced by some on the left that only an insurrectionist presidential candidate can break the grip that Wall Street has on our politics. But the truth is...President Obama already did that in 2010 (at least when it comes to presidential races). And with her proposals to both defend and build on that, Clinton has committed to carrying that forward.

To Regulate or Break Up?

Anyone who has been able to sit through both the Republican and Democratic presidential debates is very well-versed in the chasm that currently exists between the two parties. When all is said and done, the public is going to have a very clear choice between two starkly different directions for our country to embrace in November 2016. That is a good thing - especially for Democrats who seemed intent on watering down the differences in the 2014 midterms.

But last night's debate also clarified the differences between Clinton and Sanders. Matt Yglesias does a good job of teeing that up.

To Clinton, policy problems require policy solutions, and the more nuanced and narrowly tailored the solution, the better. To Sanders, policy problems stem from a fundamental imbalance of political power..The solution isn't to pass a smart new law, it's to spark a "political revolution" that upends the balance of power.

As we know from both the debate and their position statements, Clinton wants to regulate the big financial institutions and Sanders wants to break them up. The argument from the Sanders wing is that we can't trust the government to be the regulator.

I remember that same argument coming up between Democrats during the health care debate. Those who dismissed the ACA in favor of single payer said that any attempt to regulate health insurance companies was a waste of time. I always found that odd based on the Democratic tradition of embracing government regulation as the means to correct the excesses of capitalism.

This basically comes down to whether you agree with Sanders when he says that we need a "political revolution that upends the balance of power" or do you agree with Clinton when she said, "it's our job to rein in the excesses of capitalism so that it doesn't run amok." Peter Beinart calls it the difference between an institutionalist and an insurrectionalist.

Depending on where you stand on that question, your solutions will look very different. That helps me understand why I never thought Sanders' policy proposals were serious. Someone who assumes that the entire system is rigged isn't going to be that interested in "nuanced and narrowly tailored policies" to fix it.

But in the end, this puts even more of a responsibility on Sanders' shoulders. If he wants a political revolution to upend a rigged system, he needs to be very precise about what he proposes as a replacement to that system. Otherwise, he's simply proposing chaos.

The Real Losers in Last Night's Debate

There is no doubt that the moment that resonated across American during last night's Democratic debate was when Bernie Sanders said, "The American people are sick and tired of hearing about your damn emails. Enough of emails."

Sure...Hillary Clinton did a good job of explaining her positions and Bernie Sanders revved up the anger about income inequality. But the biggest smack-down of the night came at the expense of the media's obsession with the minutia about email servers and the nervous nellies in the Democratic Party who have been so worried about whether or not that kind of obsession would define this race.

We were once again reminded that on too many occasions, the D.C. media is a bubble unto itself and those who allow themselves to be trapped in their prevarications can lose touch with what voters are actually thinking. Sanders' point not only drew a standing ovation from those in attendance, it reverberated across the internet with the most common reaction being, "Finally...someone heard us!"

And so, the real losers in last night's debate are those who thought that the American public actually cares more about the drip-drip of a non-scandal than things like raising the minimum wage, making college more affordable, dealing with the crisis of gun violence, immigration reform and the many other issues these candidates came to talk about. We can only hope that those who bought into that idea learned their lesson.

Is Bernie Sanders Naive?

We all know that on several occasions Bernie Sanders has suggested that President Obama was naive in attempting to negotiate with Republicans (Shhh...don't tell him that Obama's still doing it. See: Criminal Justice Reform).

So the question becomes, how would Sanders get any of his agenda passed short of having a progressive majority in the House and super-majority in the Senate? This weekend, Chuck Todd posed that question to him on Meet the Press. Here is Sanders' response:

What I understand is that the power of corporate America, Wall Street, the corporate media is so great that real change to transform our country does not take place unless millions of people begin to stand up and say very loudly and clearly that the United States government has got to represent all of us, and not just the top 1%.

No president, not Bernie Sanders, Barack Obama, Hillary Clinton, anybody else is going to be able to accomplish that unless millions of people stand up and say, "You know what? You guys are not going to get it all." 58% of all new income is not going to go to the top 1%. We're not going to have incredible, grotesque levels of income and wealth inequality.

OK, but aren't millions of people already saying that? Sanders got even more specific when Todd asked him how he'd press his agenda with a House that will likely remain in Republican control.

What do we do? This is what you do. You say to the speaker of the House, "Hey, you don't want to negotiate with me? I think we should make public colleges and universities tuition free. And I think we should pay for a tax on Wall Street speculation."

Now, do I think the Republican speaker of the House will agree with me? No, I don't think so. But I think he'll have to look out the window and see a million young people demonstrating and marching in Washington saying, "You know what? We want to see affordability in college."

Ahhh...I get it. Once the Republicans see a million young people marching for college affordability, they'll totally cave and give them free tuition paid for by a tax on Wall Street speculators. Who cares what those fat-cats think - there are a million students standing out there making demands. Yeah, I can totally see that happening. Because standing outside Republican's window and protesting is a complete game-changer. If you ever doubted that, just watch how these Wall Streeters were cowered by OWS participants marching in the street. I'm sure the response from Congress to something like that would never be what Dick Cheney said when he was told that 2/3 of the American people didn't support the war in Iraq.

After that one, we'll get a million people to march for a raise in the minimum wage. And another million to march for single payer healthcare. Then a million for an infrastructure bank. You see where this is going, don't you? Good thing gas is still relatively cheap - because you can count on lots of road trips to D.C.

Of course I'm being a little silly here. It just strikes me as odd for someone to claim that President Obama was naive about Republican opposition and then turn around and propose this as their supposedly non-naive alternative.

Momentum for Criminal Justice Reform Continues to Build

Over the last couple of weeks, there has been some good news about the continuing momentum for criminal justice reform.

As I wrote last week, the implementation of the U.S. Sentencing Commission's application of the Fair Sentencing Act retroactively means that over the next year, approximately 14,000 non-violent drug offenders will be released from federal prisons.

Just prior to that, the Senate Judiciary Committee reached a bipartisan agreement on a bill to reduce mandatory minimum sentences.

The bill would reform federal prison sentencing to reduce some of the automatic and harsh punishments Congress passed since it began cracking down on drug use. It would end the federal “three strikes” rule and limit the use of mandatory 10-year sentences for offenders who have not committed violent or major felonies.

Beyond reforming the length of some prison terms, the bill would also bulk up rehab programs for selected inmates, including job training, drug treatment and religious programs designed to reduce recidivism. The proposal also restricts the use of solitary confinement for juveniles, an increasingly controversial practice in American prisons.

Much of the legislation, tentatively titled the “Criminal Justice Reform and Corrections Act of 2015,” draws on bills previously introduced by reformers in both parties, including Democrats Pat Leahy, Sheldon Whitehouse and Cory Booker, and Republicans Mike Lee and Rand Paul.

While many of those proposals were bipartisan, reflecting a growing consensus on the need for some criminal justice reform, none had earned the backing of Chairman Grassley, who is seen as crucial to getting any legal reform through the GOP Senate.

That starts the process in the Senate. But what about the House? In that body, Rep. Bob Goodlatte chairs the Judiciary Committee. Can anything happen as long as he is in charge? Apparently it can.

A new criminal justice bill was unveiled in the House of Representatives on Thursday, the latest sign of momentum for a bipartisan cause that backers hope will produce reforms by the end of the year.

The agreement is the latest effort to overhaul draconian sentencing laws that have sent the U.S. prison population skyrocketing in recent decades. The package comes on the heels of bipartisan legislation introduced last week by a wide-ranging and influential group of senators, which was hailed by advocates as the most criminal-justice reform proposal in a generation.

The new House bill, crafted by House Judiciary Committee chairman Bob Goodlatte (R-Va.), his Democratic counterpart John Conyers and others, focuses on sentencing reforms and serves as a companion to the Senate proposal.

Right on the heels of that announcement, we got this news.

U.S. Sen. Cory Booker's legislation to prevent federal agencies and contractors from asking applicants about any criminal record until making a conditional job offer passed a committee Wednesday and headed to the Senate floor.

The Senate Homeland Security and Governmental Affairs Committee unanimously approved the Fair Chance Act, designed to help former prisoners find jobs.

Jared Bernstein and Ben Spielberg have written an excellent article about how this is an important step in the process - both in terms of the economy and the justice issues involved.

As a way to highlight why criminal justice reform retains this kind of momentum in Washington, despite the fear mongering on the issue coming from some of the Republican presidential candidates, one need look no further than recent events in the very red state of Utah.

A bill that contained the measures, H.B. 348, passed out of the state Legislature on March 23. Republican Gov. Gary Herbert signed it about a week later.

Some of the changes that are set to take place under the new law include reducing first-time and second-time drug possession convictions from felonies to misdemeanors, expanding mental health and substance abuse treatment services for offenders, providing opportunities for inmates to earn sentence reductions by completing specified programs meant to keep them out of prison in the future, and offering greater assistance to people transitioning out of prison.

Take a look at who was on hand at an event to highlight this progress.

A number of other officials and lawmakers from the Beehive State were on hand at the event as well, including U.S. Sen. Orrin Hatch.

“Congress really could learn a lot from Utah’s efforts,” Hatch said.

Yes, indeed. This might be the only time you'll hear me say this, but I agree...Congress really could learn a lot from Utah's efforts.

How Media Memes Survive

An awful lot of folks in the media are worried that tonight's debate between the Democratic candidates will be boring because it will focus on the issues. Along those lines, it was interesting to read how Amy Chozick at the NYT tried to inject some potential for drama into tonight's event. She suggests that a "highlight" will be for the candidates to calibrate how much to distance themselves from President Obama. The whole idea didn't elicit much drama from the White House though.

Josh Earnest, the White House press secretary, said in a briefing last week that Mr. Obama “understands that it is the responsibility of individual candidates to distinguish themselves.”

“That means distinguishing themselves from their competitors,” Mr. Earnest continued. “And in some cases, that means distinguishing themselves from the current occupant of the office.”

But in reading Chozick outline the possible scenarios for the candidates to distance themselves from Obama, I have to admit that I had to do a bit of a double-take on one of them. Early on in the article, she points to one of Sanders' regular lines about the President.

In a podcast interview with the former Obama strategist David Axelrod, Mr. Sanders implied that the president had been naïve to think Republicans would sit down with him. “I think it took the president too long to fully appreciate that,” the Vermont senator said.

Sanders basically critiques President Obama for even attempting to find areas of compromise with Republicans, suggesting that all his efforts were a waste of time.

But then later in the article, Chozick interjects her own ideas about how the candidates might distinguish themselves from the current occupant of the White House.

But if the substance of Mr. Obama’s policies will be indirectly debated on Tuesday, so will his style and the criticism that he has not tried hard enough to work with his political opponents.

Huh? Nowhere does Chozick acknowledge that this would be in direct contradiction to what she just cited as Sander's critique of the President. Does she not even see how this is the polar opposite of what people like Sanders are saying? It is the inability to weigh these different perspectives that allows so many in the media to cling to memes that are completely divorced from reality.

I have to admit that the possibility of a discussion between Sanders and another candidate on whether President Obama was naive to reach out to Republicans or didn't try "hard enough to work with his political opponents" would be fascinating. It has the possibility of exposing just how ridiculous all of that talk has become. But I doubt that is going to happen...and that is how these memes survive.

Poems, Prayers and Promises

I have always loved the beauty and simplicity of John Denver's music. And I have to admit that the older I get, the sweeter this one sounds.