Populist Warren could rewrite American politics

The word on Elizabeth Warren - the Democratic Massachusetts senator who fomented the opposition last week to a rollback of financial regulations in the bill funding the government - is that she's the left's answer to shut-'em-down Ted Cruz. In a recent Washington Post column, Dana Milbank concluded that Warren is more like former South Carolina senator Jim DeMint, the Republican ideologue who left his elective office to better lead the far right to glory.

These assessments miss one crucial difference between Warren and the right-wingers: She has crossover appeal. More importantly, so does Warrenism.

Cruz and DeMint can claim no allies within what remains of moderate Republican ranks. Warren's war on Wall Street, by contrast, has enlisted colleagues on the right flank of the Democratic Party.

Although 20 Democratic senators joined Warren last weekend in voting against the funding bill as a way to protest its allowing publicly insured banks to trade risky derivatives, five colleagues joined her in the more emphatic gesture of voting against the cloture motion that brought the bill to a vote. They were three staunch progressives - Ohio's Sherrod Brown, Minnesota's Al Franken and Vermont's Bernie Sanders (an independent) - and two senators generally considered among the party's more conservative lawmakers: West Virginia's Joe Manchin III and Missouri's Claire McCaskill.

By the metric of social issues, the "more conservative" label fits those two. Unlike his Democratic colleagues, Manchin voted Monday against confirming Vivek Murthy as surgeon general to register his displeasure with Murthy's advocacy of stricter gun control, a position that runs counter not just to Manchin's beliefs but also to those of his West Virginia constituents. But when it came to rescinding regulations on Wall Street, Manchin and McCaskill were among Warren's firmest allies.

At a time when Democrats are still dissecting the double disaster of last month's midterm elections - losing working-class whites to Republicans in record numbers, and failing to motivate sufficient numbers of young and minority voters, the party's base, to go to the polls - the Warren-Manchin concord suggests that there's a way to reassemble the elusive emerging Democratic majority. Manchin represents the state with one of the nation's highest share of working-class whites. Economic populism is alive and well in such states, as evidenced by the enthusiastic receptions that Warren received when she campaigned for Senate candidates in Southern states.

The breadth of support for the populist critique of the American economy is apparent in a range of surveys. In a Washington Post/ABC poll conducted just before the midterms, 71 percent of Americans said that our economic system generally favors the wealthy - a figure that included 59 percent of conservatives and 56 percent of Republicans. Andrew Levison's book "The White Working Class Today" includes an analysis of a 2011 poll by the Pew Research Center showing that 54 percent of working-class whites "strongly" believed that "corporations make too much profit," while just 28 percent believed that those profits were "fair and reasonable." By a margin of better than 2 to 1, those respondents also said that Wall Street hurts the economy more than it helps it.

At the request of some trade union officials, the Economic Policy Institute recently conducted an unpublished analysis of research on the past 100 years of income tax data compiled by University of California at Berkeley economics professor Emmanuel Saez. Looking at income growth (excluding government payments and benefits) from 1935 through 1980 - the years of the New Deal economy and high union membership - the institute found that the bottom 90 percent of households claimed 70 percent of the income growth. The 90th to 95th percentiles claimed 11 percent; the 95th to 99th, 12 percent; and the wealthiest 1 percent claimed 7 percent.

Looking at the United States we live in now, however - from 1997 through 2012 - the institute found that the 90th to 95th percentile claimed 9 percent of all income growth and that the 95th to 99th claimed 19 percent. The wealthiest 1 percent saw its share balloon to 72 percent. Do the addition, and you'll see that adds up to 100 percent. The bottom 90 percent of American households got none of the income growth of the past 15 years, as income from work declined and income from investment soared.

Harold Meyerson is editor-at-large of The American Prospect. He wrote this for the Washington Post.

"Person responsible is who signed the bill."

Bingo! It was Clintoon who signed the The Gramm-Leach-Bliley Act, November 11, 1999. The dominoes were set. However, I can't really say it was Phil Gramm alone who caused the collapse. It was a host of many players who worked to set up the dominoes. We can learn that it takes a clueless President to set that one domino to break the system. A President like Elizabeth Warren would be a catastrophe. She is hellbent on killing the Capitalist system. We need to keep her away from the levers of power in Washington DC. It is the responsible thing by using what history has taught us to make our choices. We can learn from history as this article from Fact Check points out:

Factcheck.org

"So who is to blame? There’s plenty of blame to go around, and it doesn’t fasten only on one party or even mainly on what Washington did or didn’t do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role." Here’s a partial list of those alleged to be at fault:

* The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.

* Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

* Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.

* Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

*The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

* Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

* Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

* Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.

* The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.

* An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

* Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult."

–by Joe Miller and Brooks Jackson

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