Yesterday was a strange one on Capitol Hill. In a positive step for reformers, the House Administration Committee passed the Fair Elections Now Act, which gives candidates the incentive to seek small donations and helps break the corporate stranglehold on our democracy. Campaign-finance reformers are now urging Nancy Pelosi to schedule a vote in the House before the November election.
At the same time, the DISCLOSE Act—which, following the Supreme Court’s Citizens United decision, requires a wide array of political groups to list their donors and identify themselves in ads before the election—once again failed to clear an increasingly dysfunctional Senate. Fifty-nine senators voted for it, which in a normal democracy would assure passage, but in the Senate, where sixty votes are now necessary to pass anything, this counts as yet another defeat.
Meanwhile, the Senate Budget Committee voted 22–1 to confirm Jack Lew as President Obama’s replacement for Peter Orszag as head of the Office of Management and Budget. The lone dissenter was Vermont Senator Bernie Sanders, who expressed concern with Lew’s statement that deregulation in the nineties did not contribute to the financial crisis. Lew also received a $1 million bonus last year as an executive at Citigroup, which could provide even more bad optics for Obama’s financial team. “It is my strong belief that President Obama needs an OMB director who is willing to stand up to corporate America and the wealthy, say enough is enough, and fight for policies that protect the working class in this country,” Sanders said. “Unfortunately, I do not believe Mr. Lew is the right man at this time for this important job.” (In yet another sign of Senate dysfunction, Senator Mary Landrieu of Louisiana vowed to block Lew’s nomination until the Obama administration lifts its moratorium on deepwater oil drilling. She’s evidently already forgotten the massive BP spill in her home state.)
Speaking of standing up to corporate America and getting the short end of the stick, I recently had a book recommended to me called Confidence Game, by Bloomberg News reporter Christine Richard. It tells the story of hedge fund manager Bill Ackman, who for half a dozen years warned anyone who would listen that the $2.5 trillion bond insurance market was overly leveraged (a 40:1 ratio of debt to dollars at insurer MBIA) and bound to come crashing down, triple AAA ratings notwithstanding. Instead of heeding his advice, the Wall Street Journal attacked him while the SEC investigated him. The book reads like a surreal spy novel. To prevent a parade of future crises, we need to understand what went wrong in the first place—and figure out how to do something about it now.