Monday, February 8, 2016

FDR Also Took Money From Wall St.

Hillary made a great point at last week's debate: if you think taking donations from Wall St makes you a fake progressive then nobody is left in the Democratic party who is s true progressive-even Paul Wellstone and Ted Kennedy.

Indeed, it turns out that even the pure as a driven snow Bernie Sanders has gone to fundraisers and done paid speeches.

He also has done some paid speeches himself. Yet the fact that HRC has taken money form speeches is some sort of litmus test.

And when he says he doesn't have a super PAC, this is not quite true.

He also frankly admitted at the debate that it's not possible to live on public financing in this day and age.

I agree that it's not possible. But this doesn't really jibe with the pure line he takes on money in politics.

Some of the Bernie Bros have claimed that Bernie will be another FDR. This is untrue. FDR would certainly not be a Bernie Bro, he was first and foremost a Democrat and would have wanted what's best for the party.

But here's what else is interesting about FDR: he took money from banks. Yet he still did deep and lasting financial reform including Bernie's favorite policy, Glass Steagall:

What do Hillary Clinton, Barack Obama, Franklin Roosevelt, Teddy Roosevelt and Woodrow Wilson all have in common? They all accepted campaign contributions from Wall Street tycoons.

And, for those on that list who have already been president, all successfully imposed regulations on corporations anyway."

Wilson and FDR are the two biggest progressive Presidents in our history.

“There is a reason why these people are putting huge amounts of money into our political system,” said Sen. Bernie Sanders during last week’s Democratic debate. True enough. But the reasons why Democrats take it, and what that money buys, is a more complicated matter."

"The modern Democratic Party, while never the party of Big Business, has long been financed by a combination of large and small donors. In 1912, Woodrow Wilson’s presidential campaign made a concerted push for small donors, attracting an impressive 90,000 contributors. But more than two-thirds of the money raised came from a handful of millionaires including Wall Streeters Henry Morgenthau, Jacob Schiff, and Bernard Baruch."

So why would Wall Street millionaires put money into progressive candidates? Many of them were also progressives. The Democratic party has been pluralist. That means that Wall St is a constituency and gets a seat at the table alongside labor unions and other interest groups.

"Approximately 25 percent of FDR’s donations in 1932 came from Wall Street. For the progressive Republican Teddy Roosevelt, the extent of his reliance on Wall Street was kept secret during his successful 1904 campaign. It was only fully revealed in the midst of his 1912 third-party challenge with this scathing headline:“Wall Street Favored Roosevelt, Admits Monster 1904 Slush Fund.” J.P. Morgan himself ponied up $150,000. The Standard Oil monopoly gave $100,000 while the question of whether Roosevelt would bust them up was up in the air."

"Why did these supposedly liberal champions take all this corporate money? Well, there is the little matter of winning. In the 2012 campaign, the first of the Citizens United era, Mitt Romney and his allied super PACs spent just over $1 billion trying to win the White House. How did Obama survive? By spending the same amount, making sure his message could not be drowned out. And as good as Obama’s small-donor base was, it couldn’t produce $1 billion by itself."

But is it a deal with the devil? What do these corporate donors ultimately get?

"Sometimes nothing. Standard Oil, for example, still got busted up by Teddy Roosevelt. “We bought the son of a bitch, but he wouldn’t stay bought,” groused top donor and steel magnate Henry Frick.

"More often, as Obama plainly said to anybody paying attention in his famous 2008 “Yes We Can” speech, “they get a seat at the table, they don't get to buy every chair.”

As you can see, President Obama too is a pluralist.

"Democrats can’t solely cater to corporate interests; then their small donors would take a hike. But neither can Democrats dismiss their pleas and risk all of Corporate America unifying behind the Republicans. In the end, the interests of Democratic big donors and small donors have to be reconciled through compromises."

"Obviously, there is constant tension inside this arranged marriage. But one cannot argue that it can’t produce meaningful legislation. Wilson and FDR ended a string of bank panics through the creation and expansion of the Federal Reserve, each president compromising by giving banking interests a role. Wilson advanced the antitrust cause with the Federal Trade Commission, though he had to initially limit its powers by subjecting its decisions to a judicial review. FDR conceded to Wall Street demands and created a Securities and Exchange Commission with latitude for regulators instead of rigid rules."

"Similarly, Obama’s Dodd-Frank Wall Street reform delegates to regulators the tools to prevent massive bank failures, instead of writing into the law specific limits on bank size. And while Bill and Hillary Clinton lost their bitter battle with the health insurance and drug lobbies, Obama passed Obamacare by working with them, shelving antagonistic proposals pushed by the left like a “public health insurance option.”

"Democratic voters can look at the past history two ways. Those who are satisfied with the types of reforms that have been produced would conclude the pursuit of corporate campaign cash is a manageable political reality – you need the money to win and compromises are inevitable. But if you see the above as proof that the system is woefully constrained by corporate influence, then it is cause to pursue a path of party donor purification."

"Many on the left today want the end of direct banker influence on the Fed, stricter laws to prevent corporate “capture” of regulatory agencies and the replacement of private health insurance with a single government insurer. You can’t win those objectives under the current model. If you believe those objectives are critical, embracing Sanders’ anti-super PAC fundraising strategy is sensible."

"But Sanders overstates the case when he says we have “a corrupt campaign finance system undermining American democracy, where billionaires, Wall Street, corporate America can contribute unlimited sums of money into super PACs and into candidates.” This presumes that what corporate America wants, corporate America always gets. Not so. There are too many donors with competing interests, not only between big and small, but between big and big."

Indeed, one of the big stories of the GOP donors in recent years, is they have not gotten what they've wanted from the party. For instance they actually wanted immigration reform but the base wouldn't allow it. They certainly never wanted debt ceiling chicken or the government shutdown.

"Sanders stops short of directly accusing Clinton of being corrupt herself. When she charges him with engaging in “artful smear” by insinuation, he pivots to criticizing the system as corrupting to all. Whatever you think he’s trying to convey, the fact is that the mere taking of a campaign donation -- which literally every politician does -- is not corrupting. Yes, the donors want something in return. But donations are not contracts, and there’s no guarantee of return on investment. (In fact, both Obama and FDR saw their Wall Street donations disappear in their re-election campaigns.)"

What's been interesting about Bernie is that he has raised a lot of money himself in his campaign though they are supposed to be mostly small donations. Interestingly, Michael Moore tweeted out his $2,700 check and says he would have paid more if this weren't the limit.

Which again suggests you have an issue with big donors to the extent that you don't like their recipient.

But in a general Bernie will need to raise a lot more than $75 million.

"Sanders’ furious fundraising pace may leave the impression that the political argument for Democrats to solicit corporate donations has been debunked. But so far he has raised $75 million. Estimates for what will be needed to be viable in the general election now range between $1.5 and $2.5 billion. Clinton’s insistence of maintaining her donor network is not evidence of corruption; it’s evidence of competition."

So the fact that he hasn't raised more is actually one more reason to be pessimistic on his general election chances.

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