Elizabeth Warren confronts Wall Street Democrats

Recently, Elizabeth Warren delivered a speech from the floor of the Senate. Her purpose was to condemn Obama’s “Grand Bargain” […]

Recently, Elizabeth Warren delivered a speech from the floor of the Senate. Her purpose was to condemn Obama’s “Grand Bargain” proposal to use a chained consumer price index (CPI) to cut cost of living raises for Social Security recipients. She suggested a sensible, humane, and much needed alternative—an across the board increase Social Security benefits. This truly progressive proposal prompted an angry (bordering on hysterical) response in the Wall Street Journal, from two directors of the Democratic Party think tank, the Third Way.

In that op-ed, the Third Way, which claims to represent the “grown up,” pragmatic, centrist wing of the Democratic Party, mocked progressive politics and specifically Warren’s position on Social Security.

Centrist is a vague term, and sort of sounds good, but what does it really mean? Yves Smith, writer at Naked Capitalism, cuts to the chase. “Centrist” she says, is code for “oligarchy promoters pretending to be reasonable.”

Truly strengthening Social Security and Medicare—by raising taxes and cutting defense spending—polls very well among both young and older voters, who represent a new, emerging coalition. But, in Washington, it’s a rare day when voters actually drive policy. Moneyed interests have long wanted cuts in Social Security and Medicare. So, instead of real Democratic solutions that would serve real people’s needs, we get Democratic proposals like Chained-CPI, which is an effort to chip away at the cost of Social Security at the expense of the disabled and the elderly. The genuine “pragmatic” fix for Social Security is raising the cap on payroll taxes, but this is off the table for the Democratic Party and it’s corporate funders.

Here are a few gems from the Third Way op-ed titled “Economic Populism is a Dead End for Democrats:”

If you talk to leading progressives these days, you’ll be sure to hear this message: The Democratic Party should embrace the economic populism of New York Mayor-elect Bill de Blasio and Massachusetts Sen. Elizabeth Warren. Such economic populism, they argue, should be the guiding star for Democrats heading into 2016. Nothing would be more disastrous for Democrats. . .

The political problems of liberal populism are bad enough. Worse are the actual policies proposed by left-wing populists. . . .

Social Security is exhibit A of this populist political and economic fantasy.

Undeterred by this undebatable solvency crisis, Sen. Warren wants to increase benefits to all seniors, including billionaires, and to pay for them by increasing taxes on working people and their employers. Her approach requires a $750 billion tax hike over the next 10 years that hits mostly Millennials and Gen Xers, plus another $750 billion tax on the businesses that employ them.

Warren’s great sin is to suggest raising taxes to fund social programs. The Third Way op-ed, including its obfuscation of the facts, and Republican-like exaggeration of the “crisis” of “entitlements,” could have been written by Grover Norquist.

In an interview at the Huffington Post, Warren responded to Third Way’s accusation that she was ignoring Social Security’s “undebatable solvency crisis.”

“It’s just flatly wrong,” Warren said of Third Way’s critique. “We could make modest adjustments and make the system financially stable for a century, and we could make somewhat larger adjustments and make the system pay more for seniors who rely on it … The conversation for too long has been about whether to cut Social Security benefits a little bit or a lot. And that is flatly the wrong debate to have in mind.”

The Progressive Change Campaign Committee, Howard Dean’s Democracy for America, and Russ Feingold’s Progressives United – wasted no time in responding by attacking Third Way as a Wall Street-funded front group.

But, Elizabeth Warren took the ball a little further down the court. In a brilliant move designed to expose Third Way’s Wall Street connections, Warren wrote the following letter to donors, Jamie Dimon (JPMorgan, Chase), John Stumpf (Wells Fargo), Brian Moynihan (Bank of America), Lloyd Blankfein (Goldman Sachs), Michael Corbat (Citigroup) and James Gorman (Morgan Stanley). You can read the entire letter here. Donating to independent think tanks, technically, isn’t lobbying, but Warren’s letter sends the message to both Wall Street and Third Way that she knows how the influence game is played.

Five years ago, the “Too Big to Fail” status of America’s largest financial institutions led to the near-collapse of the economy and massive government bailouts. That crisis was the result of reckless activity on Wall Street and regulatory failures in Washington. . .

To avoid repeating those mistakes, and to prevent future crisis, policymakers need access to objective, high-quality research, data, and analysis about our consumer and financial markets. As you know, private think tanks are extremely well suited to provide this research and analysis, but for it to be valuable, such research and analysis must be truly independent. If the information provided by think tanks is little more than another form of corporate lobbying, then policymakers and the public should be aware of the difference.

Warren’s fearless commitment to working people and the middle class is commendable. To remain relevant, the Democratic Party needs to abandon Wall Street and fall in behind her.

 


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Madonna Gauding

About Madonna Gauding

Madonna Gauding is a freelance writer, illustrator and book designer living in St. Louis. MO. She is the author of 10 books on a variety of "mind, body, spirit" topics.