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Bankers’ Holiday

Mike Lux – Author, The Progressive Revolution: How the Best in America Came to Be

Posted: March 7, 2011 11:25 AM

The great battles of this turbulent era will keep going on for years to come. The ideologues who want no check whatsoever on the power of big business have declared war on the middle class, and want no one to get in their way. Governors like Scott Walker and John Kasich will brook no compromise in trying to destroy unions. Right-wing politicians who have long wanted to do away with Social Security and Medicare and pretty much all safety nets for the poor are getting more and more brazen: Speaker Boehner made clear last week his plans to go after Social Security and Medicare sooner rather than later. And it is not just economics: the extremists are coming after not just a woman’s right to choose, but even birth control itself with their attempts to shut down family planning funding.

The good news is that, as I wrote in the Washington Post this weekend, these attacks on the things we hold dear are putting the “movement” back in the labor movement (and the women’s movement, and the progressive movement). We are going to march and demonstrate, we are going to recall Wisconsin legislators and, once a year has passed, the Governor. We will win a citizen’s veto ballot initiative fight in Ohio. And we will take on the ultimate patrons of conservative politicians, the billionaire extremists like the Koch brothers and the Wall Street bankers who are providing the money and pulling the strings for this attack on the middle class.

Getting less attention than the open warfare in Wisconsin and other states, one of the most important fronts in the fight for a better economy and a stronger, rather than decimated, middle class is to keep challenging the banks. This past weekend, National People’s Action has been in D.C. taking on Wall Street because the big banks’ corrupt and broken business model is at the heart of what has brought our economy to its knees, and until it gets fixed, the economy won’t be fixed either. You would think these bankers — whose fraud and speculation inflated the housing bubble and then crashed our economy, who came to the American taxpayers for a bailout when they got themselves in trouble and then arrogantly rewarded themselves record bonuses while attacking any kind of regulatory reform — would at least pretend to be a little humble right now. Absolutely not. Wall Street billionaires like Pete Peterson are braying about the need for senior citizens to tighten their belts because the $14,000 the average retiree gets from Social Security is just a little too extravagant. Wall Street money is backing Republican efforts to slash Head Start and education funds, and to break the unions in Wisconsin, Ohio, and other states. These are the guys who broke the economy, but they don’t want anyone to think about that, so they are pumping money into blaming teachers, cops, and firefighters for the fiscal problems of the states and federal government.

Meanwhile, when someone does try to regulate the Wall Street guys just a little, the big bank lobby loses it entirely, whines to high heaven, and begins spending money all over the place. Elizabeth Warren is under daily attack by the bankers in her very reasonable, thoughtful efforts to look out for consumers on financial issues, and the Wall Street boys’ mouthpiece in the Senate, Dick Shelby, is threatening a holy war with the White House if she is nominated to run the agency. Whether the White House caves to Shelby and Wall Street’s pressure will be one of the biggest signals going forward of how strong they will be in terms of taking on the big banks.

The big bank lobby also is gearing up a massively funded campaign on the swipe-fee issue, and this to me is a very telling story of just how much power Wall Street has in Washington, D.C. I got involved in this issue during the financial reform fight when Dick Durbin introduced an amendment to have the Federal Reserve regulate this previously completely unregulated economic bonanza for the big banks. They make $45 billion a year almost purely in profit, using their dominance to charge whatever they want to restaurant owners, hardware stores, cab drivers, non-profit groups, and every other business that takes credit and debit cards. I got involved because a little bit of regulation had the potential to save a lot of struggling small businesspeople a ton of money, with savings hopefully partially passed onto consumers. I figured moving money from the profits of big banks to the Main Street economy was a good thing to do, so I started working on the issue with retailers and other businesspeople, as well as consumer groups like U.S. PIRG. This coalition ended up getting 63 votes for Durbin’s Senate amendment, and we kept good compromise language in the final financial reform conference committee bill. I was worried that the Fed — whose regulators are notoriously close to the banking industry — would try to gut the regulations, but they came out with a reasonable and fair proposal.

Because the proposal was fair, though, the Wall Street lobby went right through the roof — and got the money flowing. I talked to one retail lobbyist the other day who said he recently went to a fundraiser for a Republican House member. There were 42 banking lobbyists there with money for the Congressman, and most of the conversation was about the swipe-fee regulation. The banks are spending massively on internet advertising, on direct lobbying, on PR related to the issue. And their effort is having an effect. At a congressional hearing on the issue the other day, most of the members attending appeared to have their questions and talking points fed directly to them by the bankers. Here’s the most striking thing, though: the retailers and other business groups working on this issue are not exactly chopped liver. The resistance is not coming just from populists like me and a couple of consumer groups against the big banks — some of the businesses on our side are huge ones like Walmart and Home Depot. But Wall Street is the master of the Washington universe, and when they say jump, politicians tend to do it. Even a populist like Senator Jon Tester from Montana, who you’d think would love to be fighting against Wall Street bankers on behalf of small Montana businesses, is said to be getting ready to drop a bill on the banks’ behalf. There is growing talk that the Republicans want to take up financial reform again on the swipe fee and derivatives issues, and if that happens — Katy bar the door — the whole financial reform bill could unravel.

Wall Street bankers, billionaire oilmen like the Koch brothers, and other big business special interests that are funding the Republican assault on labor and the middle class have way too much power already. They commit financial fraud, wreck the economy, violate pollution standards, and gouge other businesses, and it never seems to matter. If labor is crushed, if middle class incomes are driven down, if even basic regulations are overturned, this country will be in a world of hurt. Let’s put the movement back in our movement, and fight these bankers and moneymen who act like every day is a holiday made just for them.

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