Matt Stoller of New America, a think tank that’s dedicated to “renewing American politics, prosperity, and purpose in the Digital Age,” had an interesting piece in The Washington Post that adds to the notion that Democrats need to understand their role in the rise of Trump.
The Democratic Party is in dismal shape, with over 1,000 lost congressional, gubernatorial, and state legislature spots over the past eight years. The Republican Party is the dominant political force in the country. And as Democrats decided what they’re going to do—they need to understand that reclaiming lost ground in rural Middle America is key. That white working class voters matter. It will take time. And Stoller, whose area of study is the history of concentrated financial power and the Democratic Party, wrote that the Left has to understand their role in the chipping away of America’s middle class.
President Barack Obama did venture into rural America. He didn’t win these counties, but he won enough working class voters to prevent Romney from edging him out. Rural counties are now almost reliably Republican in national elections. Liberals see Obama as an economic savior who stopped a financial crisis, created scores of (crappy or part time) jobs, and did his best to fight for the little guy. That’s that the Left says. Stoller added that the evidence presents a different picture and one that offers a reason why Trump beat Hillary Clinton last November. For starters, Obama allowed the banks for foreclose on nearly 10 million homes, favored creditors over borrowers when both probably should have been shouldering the burden of the housing crisis together, and didn’t prosecute anyone who was involved in almost setting the world on fire. In short, Obama only accelerated the Left’s fall with the middle class:
First, he saved the financial system. A financial system in collapse has to allocate losses. In this case, big banks and homeowners both experienced losses, and it was up to the Obama administration to decide who should bear those burdens. Typically, such losses would be shared between debtors and creditors, through a deal like the Home Owners Loan Corporation in the 1930s or bankruptcy reform. But the Obama administration took a different approach. Rather than forcing some burden-sharing between banks and homeowners through bankruptcy reform or debt relief, Obama prioritized creditor rights, placing most of the burden on borrowers. This kept big banks functional and ensured that financiers would maintain their positions in the recovery. At a 2010 hearing, Damon Silvers, vice chairman of the independent Congressional Oversight Panel, which was created to monitor the bailouts, told Obama’s Treasury Department: “We can either have a rational resolution to the foreclosure crisis, or we can preserve the capital structure of the banks. We can’t do both.”
Second, Obama’s administration let big-bank executives off the hook for their roles in the crisis. Sen. Carl Levin (D-Mich.) referred criminal cases to the Justice Department and was ignored. Whistleblowers from the government and from large banks noted a lack of appetite among prosecutors. In 2012, then-Attorney General Eric Holder ordered prosecutors not to go after mega-bank HSBC for money laundering. Using prosecutorial discretion to not take bank executives to task, while legal, was neither moral nor politically wise; in a 2013 poll, more than half of Americans still said they wanted the bankers behind the crisis punished. But the Obama administration failed to act, and this pattern seems to be continuing. No one, for instance, from Wells Fargo has been indicted for mass fraud in opening fake accounts.
Third, Obama enabled and encouraged roughly 9 million foreclosures. This was Geithner’s explicit policy at Treasury. The Obama administration put together a foreclosure program that it marketed as a way to help homeowners, but when Elizabeth Warren, then chairman of the Congressional Oversight Panel, grilled Geithner on why the program wasn’t stopping foreclosures, he said that really wasn’t the point. The program, in his view, was working. “We estimate that they can handle 10 million foreclosures, over time,” Geithner said — referring to the banks. “This program will help foam the runway for them.” For Geithner, the most productive economic policy was to get banks back to business as usual.
Many Democrats think that Trump supporters voted against their own economic interests. But voters don’t want concentrated financial power that deigns to redistribute some cash, along with weak consumer protection laws. They want jobs. They want to be free to govern themselves. Trump is not exactly pitching self-government. But he is offering a wall of sorts to protect voters against neo-liberals who consolidate financial power, ship jobs abroad and replace paychecks with food stamps. Democrats should have something better to offer working people. If they did, they could have won in November. In the wreckage of this last administration, they didn’t.
Read Full Story At Townhall