Kicking the Wall Street habit
So, protesters are occupying Wall Street and downtown banking districts in scores of other cities. Many Democratic politicos have endorsed the movement’s spirit and goals.
The pols are in no position to enact any further left-populist reforms — laws that create, say, a financial transaction tax, or that make it easier for employees to form unions — so long as Republicans control the House and have veto power in the Senate. For that matter, the Democrats couldn’t even get those bills enacted when they controlled both houses of Congress. So what, besides affirming their solidarity with the demonstrators, can they do?
Here’s a modest proposal: Refuse all campaign contributions from banks, hedge funds, private equity funds and their partners and employees. From the whole financial sector. Sign a pledge to go off the sauce. Unlike the signatories to Grover Norquist’s no-tax pledge, lawmakers wouldn’t be asking voters to trust them once the election is over. They’d be honoring their pledge before the election. And unlike the Groverians, they wouldn’t surrender their powers of judgment and freedom of action once they’re in office. Indeed, their freedom of action would expand because they wouldn’t be indebted to ”what is far and away the largest source of campaign contributions to federal candidates and parties,” as the Center for Responsive Politics, which tallies all federal campaign contributions, characterizes the financial sector. In the 2008 election cycle, those contributions came to a cool $500,863,000.
Let me be the first to acknowledge that there are problems with this suggestion. Declining contributions in an era of capital-intensive elections appears at first glance — second, too — to be a sucker’s game, a form of unilateral disarmament. But perhaps there’s a way that candidates who do take the no-bank-money pledge can compensate for the hole it would blow in their campaign treasuries. The 2008 Obama presidential campaign clearly showed that a popular candidate can raise significant sums in small online contributions. Warmed by all the heat that Occupy Wall Street has generated, a group like MoveOn.org, or an entirely new group dedicated to this purpose, could raise money for candidates who take the pledge.
Imagine a race next year in a swing House district in which one candidate has taken the pledge. All her messaging — speeches, advertising, the works — would highlight the fact that she’s not beholden to Wall Street while her opponent either is (if he’s taken its contributions) or may be in the future (if he’s declined to take the pledge).
Our pledge-taker has a lot going for her. Since the government bailed out Wall Street, only to see Wall Street decline to bail out Main Street, public antipathy to the institutions and individuals at the commanding heights of the economy has risen to new levels. Add to that the public’s anger at the ability of big financial players to influence public policy, and the no-bank-money pledge could well be a winning political message. And one that would lead to distinctly better public policy.
After all, did the financial deregulation of the past two decades get enacted on its merits, or because of the campaign contributions and lobbying prowess of finance? The 1999 repeal of the Glass-Steagall Act, which had kept federally insured commercial banks separate from investment and speculator banks, didn’t happen because speculative banking had suddenly become safe. It happened because Citibank and other institutions made mega-campaign contributions and lobbied ferociously for repeal. The Commodities Futures Modernization Act of 2000, which deregulated derivatives, was enacted because the leading banks believed they could make untold profits if it passed.
There are, as I conceded, complexities to all this. Should the pledge apply to all banks or just the big ones? To individual bankers or just their institutions? Why single out finance when there are other socially problematic sectors — oil, say — that use their financial clout to buy favored treatment?
It’s the banks, though, that have become the leading target of the left’s populist ire. And for an anti-bank movement looking for a program, and a politician looking to ride that populist wave and help diminish the role of money in politics, here’s a cause to take up tomorrow morning: For the pols, swearing off the banks’ big bucks. For the occupiers and their friends, helping those pols by ponying up themselves.
HAROLD MEYERSON is editor-at-large of American Prospect.