Unfair to Middling

It's unfair: there are idiots to the right and reformers to the left; what's a Wall Street Plutocrat to do? The Republican demagogues are eager to do the plutocrats' bidding, but the idiots they exploit are so viciously retrogressive and nihilistic that the Republican demagogues cannot win national elections. Come on, Carson and Trump, you have to be kidding! Ah, but hope springs eternal for the Wall Street Plutocrats. They still have the power of money. They can still create super-packs, and they can create think tanks to tell the bought politicians what to say. The progressives, like Bernie Sanders and Elizabeth Warren, may be pushing Democrats like Hillary Clinton to the left, but those progressives have not won yet! The Democrats that are sympathetic to the Wall Street plutocrats or who are financially dependent on those plutocrats offer a third way between the idiots and the progressives.

In other words, the plutocrats are trying to take advantage of a split they see in the Democratic Party. Of that split JIm Tankersley wrote in the Washington Post:

“... One side believes what's gone wrong for the middle class is that wealthy and powerful players have rewritten the tax code, trade deals, labor law and other policies in order to advantage themselves, at the expense of workers. Middle-class stagnation, in this view, is a choice that can be corrected by shifting power back to workers, at the bargaining table and elsewhere.

The other side, the Third Way side, believes [or wants us to believe] that the stagnation is a natural consequence of a globalizing economy, which has disproportionately benefited people with high skills and people who own stock, businesses and other forms of capital. That's the story Kodak is meant to represent. Its demise wasn't imposed by someone else's policy choice, it was a failure of the company to adapt. To boost the middle-class, by that logic, workers need to be given the means to adapt.”

Notice that in the preceding paragraph Mr. Tankersley referred to the non-progressive side as the “Third Way” side. This is because the Plutocrats have established a “ Wall Street-funded Democratic think tank called Third Way.” As Richard Eskow reports in commondreams.org:

“Third Way has released a lengthy report that argues an inequality-based, populist theme will doom Democrats. Its board member, former White House Chief of Staff (and JPMorgan Chase executive) Bill Daley, even insisted to HuffPo’s Stein that Sanders’ political positions are “a recipe for disaster.

The Third Way report is available online. It introduces a number of catchphrases, often paired in threes: the Hopscotch Workforce, the Nickel-and-Dimed Workforce, and the Asset-Starved Workforce; Stalling Schools, the College Well, and Adult Atrophy; the Upside-Down Economy, the Anywhere Economy, and the Malnourished Economy.

Sadly, most of the content amounts to Misleading Minutiae, Gimmicky Wordplay, and Downright Deception.”

As Mr. Tankersley so aptly wrote: “Third Way’s argument against inequality as a leading source of our current economic woes puts them directly at odds with leading economists, including Nobel Prize winner Joseph Stiglitz. “Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena,” Stiglitz wrote in 2013, “when they are in fact intertwined. Inequality stifles, restrains and holds back our growth.”

So now we come down to the Democratic Debate held last night and what we can learn from it (besides the fact that it was an incredibly stupid idea to schedule it at a time that put it up against college football, particularly Pac 12 football, particularly in the second largest television market in the nation where NFL stands for No Football Locally and fans really follow the college teams!).

What the Democratic debates have revealed so far is that even Hillary Clinton with her connection to Bill Clinton, Barack Obama, and Wall Street has embraced the Progressive explanation for what “has gone wrong for the middle class.” The one thing no one can accuse Hillary of being is stupid. She would not have moved to the left if she did not think a progressive agenda is a winner!

After the October 16 debate Paul Krugman Wrote” 

“Hillary Clinton and Bernie Sanders had an argument about financial regulation during Tuesday’s debate — but it wasn’t about whether to crack down on banks. Instead, it was about whose plan was tougher. The contrast with Republicans like Jeb Bush or Marco Rubio, who have pledged to reverse even the moderate financial reforms enacted in 2010, couldn’t be stronger.

“For what it’s worth, Mrs. Clinton had the better case. Mr. Sanders has been focused on restoring Glass-Steagall, the rule that separated deposit-taking banks from riskier wheeling and dealing. And repealing Glass-Steagall was indeed a mistake. But it’s not what caused the financial crisis, which arose instead from “shadow banks” like Lehman Brothers, which don’t take deposits but can nonetheless wreak havoc when they fail. Mrs. Clinton has laid out a plan to rein in shadow banks; so far, Mr. Sanders hasn’t.”

During the last debate Hillary pointed out what Paul Krugman wrote in this article. What Hillary did not mention was this important caveat from Robert Borosage in his July 17 article in Campaign For America's Future:

“... in what is becoming a signature of the Clinton campaign, the fundamental problem is addressed with underwhelming reforms. To abandon the culture of short-term speculation, Clinton does not call for a financial speculation tax that might slow computer-driven, nanosecond trading programs. She does not endorse taxing the income of investors at the same rate as the salaries of workers. She doesn’t mention breaking up too-big-to-fail financial institutions or reducing the bloated size of our financial community that helps drive risky financial transactions. She doesn’t penalize companies for excessive CEO compensation packages.”

I might add here that most economists, including Paul Krugman, say that repealing Glass Steagall was a mistake.* I favor restoring Glass Steagall, but I would not argue with Mr. Krugman about what else needs to be done. I cannot tell you whether Hillary Clinton will strengthen what Mr. Borosage called "underwhelming reforms," but her rhetoric is making Wall Street nervous.  The bottom line is that the incompetence of the Republican Party and the emergence of Roosevelt Democrats is dreadful news for the Wall Street Plutocrats who are afraid that their privileged position might actually become middling.

*There are also economists who disagree with Mr. Krugman about whether the repeal of Glass Steagall was a cause of the crash of 2008.  See Glass Steagall Matters!