Biden Should Pick Warren as VP, Immediately
It would give him serious leverage on the single-biggest issue facing the nation.
Elizabeth Warren/Flickr
Tuesday night, as Joe Biden was waiting for the polls to close in Florida, Illinois, and Arizona—states he would win handily—Elizabeth Warren published this Twitter thread:
5. Companies must set aside at least one seat – but potentially two or more, as the amount of relief increases – on the board of directors for representatives elected by workers.
This is brilliant. The moment to impose needed reforms on American industries is precisely when a crisis hits and they’re coming hat in hand to Washington asking for bailouts.
If I were Joe Biden, I’d immediately announce Warren as my vice-presidential pick. I’d further say that I agree with her bail out terms, and that while I don’t have a vote in the Senate, she does and she’s my proxy.
Such a move would give Biden serious leverage on a host of fronts.
First, by elevating Warren and her agenda, he’d be sending the message to Bernie voters that as president he really is willing to pursue serious structural change of the rules of American capitalism. Such a message would help unify the left and moderate wings of the Democratic Party while undercutting whatever argument Sanders still has for staying in the race.
Second, it would make Biden a power player in the immensely significant decisions that are going to be made in Washington in the coming weeks and months. Presuming he and Warren can come to terms—that is, he would have to agree to follow her lead on policy ideas but she’d have to agree that he’s the boss and not to go too far beyond what he’s comfortable with—her pronouncements on the Senate floor would be seen as the word of the presumptive Democratic nominee. As such, other Democratic lawmakers would be more inclined to support her positions. That would help unify the Democrats behind an aggressive set of demands they’d place before Mitch McConnell and, ultimately, Donald Trump, on the terms of any stimulus/bailout package. Every time Trump gives into a Democratic congressional demand, he would in essence be conceding to Joe Biden—months before the November elections.
This might sound fanciful. But is not far from the situation Biden’s boss Barack Obama found himself in during the winter of 2008-2009, when the auto industry sought billions of dollars in federal loans to stave off collapse in the midst of the financial crisis. Washington responded, but with stiff terms dictated mostly by congressional Democrats and Obama, who at the time hadn’t even been inaugurated.
Though Republicans refused to support a bailout bill, George W. Bush, as a lame duck, reversed himself and reluctantly agreed to use money from the TARP funds, created to fund the banks, for the auto industry bailout—precisely the position Obama had been advocating, and on the terms he’d called for—and months later, as president, Obama stiffened the terms when the auto companies asked for more money. The terms included the firing of car company CEOs and boards, elimination of unprofitable brands and dealerships, and new production of low-mileage cars, including electric models, in American plants (recall that part of the problem at the time was that Detroit had gone all in on SUVs and light trucks that they couldn’t move because of high oil prices).
Rightwing free marketers, as well as some on the left, condemned the auto company bailouts. But the truth is they not only saved the industry but helped keep the country out of another Great Depression–and the U.S. Treasury ultimately recovered all but about $9 billion of the $80 billion it invested in the industry.
All of this history will be revisited as the debate over the government’s economic response to the coronavirus picks up—including the fact that Trump was for the auto industry bailout before he was against it. By choosing Warren as his VP, Biden can put himself in the center of that action and start pushing Trump around on the single biggest issue facing the nation.
Bankruptcy Bill
OBAMA-BIDEN AND THEIR
BANKSTERS:
And it all
got much, much worse after 2008, when the schemes collapsed and, as Lemann
points out, Barack Obama did not aggressively rein in Wall Street as Roosevelt
had done, instead restoring the status quo ante even when it meant ignoring a
staggering white-collar crime spree. RYAN COOPER
The Rise of Wall Street
Thievery
How
corporations and their apologists blew up the New Deal order and pillaged the
middle class.
America has long had a suspicious streak toward business, from
the Populists and trustbusters to Bernie Sanders and Elizabeth Warren. It’s a
tendency that has increased over the last few decades. In 1973, 36 percent of
respondents told Gallup they had only “some” confidence in big business, while
20 percent had “very little.” But in 2019, those numbers were 41 and 32
percent—near the highs registered during the financial crisis.
Clearly, something has
happened to make us sour on the American corporation. What was once a stable
source of long-term employment and at least a modicum of paternalistic benefits
has become an unstable, predatory engine of inequality. Exactly what went wrong
is well documented in Nicholas Lemann’s excellent new book, Transaction
Man. The title is a reference to The Organization Man, an
influential 1956 book on the corporate culture and management of that era.
Lemann, a New Yorker staff writer and Columbia journalism
professor (as well as a Washington Monthly contributing
editor), details the development of the “Organization” style through the career
of Adolf Berle, a member of Franklin D. Roosevelt’s brain trust. Berle argued
convincingly that despite most of the nation’s capital being represented by the
biggest 200 or so corporations, the ostensible owners of these firms—that is,
their shareholders—had little to no influence on their daily operations. Control
resided instead with corporate managers and executives.
Transaction Man: The Rise of the Deal and the
Decline of the American Dream
by Nicholas Lemann
Farrar, Straus and Giroux, 320 pp.
by Nicholas Lemann
Farrar, Straus and Giroux, 320 pp.
Berle was alarmed by the wealth of these
mega-corporations and the political power it generated, but also believed that
bigness was a necessary concomitant of economic progress. He thus argued that
corporations should be tamed, not broken up. The key was to harness the
corporate monstrosities, putting them to work on behalf of the citizenry.
Berle exerted major influence on the New Deal
political economy, but he did not get his way every time. He was a fervent
supporter of the National Industrial Recovery Act, an effort to directly
control corporate prices and production, which mostly flopped before it was
declared unconstitutional. Felix Frankfurter, an FDR adviser and a disciple of
the great anti-monopolist Louis Brandeis, used that opportunity to build
significant Brandeisian elements into New Deal structures. The New Deal social
contract thus ended up being a somewhat incoherent mash-up of Brandeis’s and
Berle’s ideas. On the one hand, antitrust did get a major focus; on the other,
corporations were expected to play a major role delivering basic public goods
like health insurance and pensions.
Lemann then turns to his major subject, the
rise and fall of the Transaction Man. The New Deal order inspired furious
resistance from the start. Conservative businessmen and ideologues argued for a
return to 1920s policies and provided major funding for a new ideological
project spearheaded by economists like Milton Friedman, who famously wrote an
article titled “The Social Responsibility of Business Is to Increase Its
Profits.” Lemann focuses on a lesser-known economist named Michael Jensen,
whose 1976 article “Theory of the Firm,” he writes, “prepared the ground for
blowing up that [New Deal] social order.”
Jensen and his colleagues embodied that
particular brand of jaw-droppingly stupid that only intelligent people can
achieve. Only a few decades removed from a crisis of unregulated capitalism
that had sparked the worst war in history and nearly destroyed the United
States, they argued that all the careful New Deal regulations that had
prevented financial crises for decades and underpinned the greatest economic
boom in U.S. history should be burned to the ground. They were outraged by the
lack of control shareholders had over the firms they supposedly owned, and
argued for greater market discipline to remove this “principal-agent
problem”—econ-speak for businesses spending too much on irrelevant luxuries
like worker pay and investment instead of dividends and share buybacks. When
that argument unleashed hell, they doubled down: “To Jensen the answer was
clear: make the market for corporate control even more active, powerful, and
all-encompassing,” Lemann writes.
The best part of the book is the connection
Lemann draws between Washington policymaking and the on-the-ground effects of
those decisions. There was much to criticize about the New Deal social
contract—especially its relative blindness to racism—but it underpinned a
functioning society that delivered a tolerable level of inequality and a decent
standard of living to a critical mass of citizens. Lemann tells this story
through the lens of a thriving close-knit neighborhood called Chicago Lawn.
Despite how much of its culture “was intensely provincial and based on
personal, family, and ethnic ties,” he writes, Chicago Lawn “worked because it
was connected to the big organizations that dominated American culture.” In
other words, it was a functioning democratic political economy.
Then came the 1980s. Lemann paints a visceral
picture of what it was like at street level as Wall Street buccaneers were
freed from the chains of regulation and proceeded to tear up the New Deal
social contract. Cities hemorrhaged population and tax revenue as their
factories were shipped overseas. Whole businesses were eviscerated or even
destroyed by huge debt loads from hostile takeovers. Jobs vanished by the
hundreds of thousands.
And it all got much, much worse after 2008,
when the schemes collapsed and, as Lemann points out, Barack Obama did not
aggressively rein in Wall Street as Roosevelt had done, instead restoring the
status quo ante even when it meant ignoring a staggering white-collar crime
spree. Neighborhoods drowned under waves of foreclosures and crime as far-off
financial derivatives imploded. Car dealerships that had sheltered under the
General Motors umbrella for decades were abruptly cut loose. Bewildered Chicago
Lawn residents desperately mobilized to defend themselves, but with little
success. “What they were struggling against was a set of conditions that had
been made by faraway government officials—not one that had sprung up
naturally,” Lemann writes.
Toward the end of the book, however, Lemann starts to run out of
steam. He investigates a possible rising “Network Man” in the form of top
Silicon Valley executives, who have largely maintained control over their
companies instead of serving as a sort of esophagus for disgorging their
companies’ bank accounts into the Wall Street maw. But they turn out to be, at
bottom, the same combination of blinkered and predatory as the Transaction Men.
Google and Facebook, for instance, have grown over the last few years by
devouring virtually the entire online ad market, strangling the journalism
industry as a result. And they directly employ far too few people to serve as
the kind of broad social anchor that the car industry once did.
In his final chapter, Lemann argues for a
return to “pluralism,” a “messy, contentious system that can’t be subordinated
to one conception of the common good. It refuses to designate good guys and bad
guys. It distributes, rather than concentrates, economic and political power.”
This is a peculiar conclusion for someone who
has just finished Lemann’s book, which is full to bursting with profoundly bad
people—men and women who knowingly harmed their fellow citizens by the millions
for their own private profit. In his day, Roosevelt was not shy about
lambasting rich people who “had begun to consider the government of the United
States as a mere appendage to their own affairs,” as he put it in a 1936 speech
in which he also declared, “We know now that government by organized money is
just as dangerous as government by organized mob.”
If concentrated economic power is a bad thing,
then the corporate form is simply a poor basis for a truly strong and equal
society. Placing it as one of the social foundation stones makes its workers
dependent on the unreliable goodwill and business acumen of management on the one
hand and the broader marketplace on the other. All it takes is a few ruthless
Transaction Men to undermine the entire corporate social model by outcompeting
the more generous businesses. And even at the high tide of the New Deal, far
too many people were left out, especially African Americans.
Lemann writes that in the 1940s the United
States “chose not to become a full-dress welfare state on the European model.”
But there is actually great variation among the European welfare states. States
like Germany and Switzerland went much farther on the corporatist road than the
U.S. ever did, but they do considerably worse on metrics like inequality,
poverty, and political polarization than the Nordic social democracies, the
real welfare kings.
Conversely, for how threadbare it is, the U.S.
welfare state still delivers a great deal of vital income to the American
people. The analyst Matt Bruenig recently calculated that American welfare
eliminates two-thirds of the “poverty gap,” which is how far families are below
the poverty line before government transfers are factored in. (This happens
mainly through Social Security.) Imagine how much worse this country would be
without those programs! And though it proved rather easy for Wall Street
pirates to torch the New Deal corporatist social model without many people
noticing, attempts to cut welfare are typically very obvious, and hence
unpopular.
Still, Lemann’s book is more than worth the
price of admission for the perceptive history and excellent writing. It’s a splendid
and beautifully written illustration of the tremendous importance public policy
has for the daily lives of ordinary people.
Ryan Cooper is a national correspondent at the
Week. His work has appeared in the Washington Post, the New Republic, and the
Nation. He was an editor at the Washington Monthly from 2012 to 2014.
Biden Rewrites History
of Supporting 2005
BANKSTERS'
Bankruptcy Bill
|
Posted:
Mar 15, 2020 10:10 PM
Source:
AP Photo/Evan Vucci
Former
Vice President Joe Biden was caught in a massive lie on the debate stage Sunday
night, by his last-standing opponent, Sen. Bernie Sanders (D-VT). Biden claimed
that he had no hand in the 2005 bankruptcy bill, when called out by Sen.
Sanders:
“This
is a little bit about leadership as well. Joe talked about bankruptcy, Joe, you
helped write that bankruptcy bill,” Sen. Sanders said.
Although
Biden denies support of the bill, the evidence does not support his claim.
Passed in 2005 by a bipartisan majority, the Bankruptcy Abuse Prevention And
Consumer Protection Act (BAPCPA) altered the US Bankruptcy code, and made it
more difficult to file for bankruptcy. The BAPCPA increased the threshold for
bankruptcy in hopes of cutting fraud and abuse. The bill receives criticism
from the far-left, including Sens. Sanders and Warren, who both claim that
BAPCPA puts credit companies before consumers. Biden not only supported the
bill, but sponsored
it alongside GOP colleagues.
Did
Biden seriously just say he didn't help write the bankruptcy bill?
the
puzzling thing is that Biden is just pretending he wasn't a major champion of
the bankruptcy bill, whereas Sanders has at least acknowledged this dynamic on
gunshttps://twitter.com/davidaxelrod/status/1239354672122662912 …
Biden’s
denial of supporting BAPCPA is yet another example of the former Vice President
running away from his record, in order to appease progressive voters.
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