This past weekend, the Democratic Leadership Council (DLC) convened a national conversation in New York City. Politicians of all stripes gathered to rub shoulders with lobbyists and corporate contributors in the smarmy swirl that characterizes DLC meetings. The DLC generally uses these occasions to suggest ways that Democrats can benefit by becoming more like Republicans. But on this occasion, members of the DLC should have considered following the example set by Fed Chair Alan Greenspan in his recent Senate testimony: admit up front that they’ve been wrong. For in the current situation, the DLC is simply out of step with the needs of the country and the opinion of a growing majority of Americans. Here are just a few of the issues the DLC gets wrong:
1. At a time when the public thinks big business has too much influence in Washington, the DLC’s mission is to increase the influence of business in the Democratic Party. Or as Simon Rosenberg, head of the DLC’s corporate-funded political action committee, the New Democrat Network, put it, “We’re trying to raise money to help them lessen their reliance on traditional interest groups in the Democratic Party.” But today, two-thirds of the public says big business already has too much influence in Washington. By 50 to 37 percent, Americans say Bush favors the interests of big corporations over ordinary working people. By 49 to 37 percent, they say Democrats favor ordinary working people. That advantage would disappear if the DLC has its way.
2. New Democrats joined with conservative Republicans in contributing to the current mess. DLC icon Senator Joe Lieberman and other New Dems joined with Gingrich and Republicans to pass securities “reform,” a centerpiece of Gingrich’s Contract With America, over President Clinton’s veto. The measure, which the DLC touts to this day, made it harder for shareholders to hold executives and accountants liable for misleading reports. Clinton is surely right to now point to this measure as contributing directly to the current scandals.
New Democrats in the House and Senate, led by the ethically challenged former New Dem co-chair Representative Jim Moran, worked with Republicans to frustrate Arthur Levitt, Clinton’s chair of the Securities and Exchange Commission, in Levitt’s attempt to ban auditors from doing consulting for the companies they audit. As Clinton notes, this led directly to the Enron scandals, in which auditors had every incentive to ignore shady off-the-books maneuvers.
And Lieberman, the DLC’s favored candidate for President, made the fight against honest accounting of executive stock options his personal mission. Honest accounting, urged by such “radicals” like Alan Greenspan and Warren Buffett, would have tempered the abuse of stock options; as things stood, executives had a multimillion-dollar incentive to cook the books in the short term so they could cash out. Lieberman continues to block efforts for this reform to this day, but now claims, in his best Claude Rains imitation, to be shocked that stock options have been abused, and haven’t been used to redistribute wealth, as he thought.
3. New Dems joined with Republicans in diluting efforts to clean up the current mess. New Dems in the House offered bipartisan support for the Republican accounting reform bill that was certified as harmless by the accountants’ lobby. Before the WorldCom revelations, when it looked like reform was going to be bottled up in the Senate, Lieberman and DLC head Al From launched a PR drive to warn Democrats against being antibusiness and doing too much.