Which group will win the Democratic Party’s future: the protectors of the corrupt financial industry or the fighters for the middle class and poor?
Just when you think the Democratic Party has its act together and there is clear sailing ahead, something always happens. The party is splintering into the Elizabeth Warren and Hillary Clinton factions. The underlying issue is as much about the future of the banking and financial services industries as it is about political ideology and policy in other areas.
“But make no mistake: the 2016 election could well be the place where this fight breaks into the open. Hillary Clinton, the clear favorite for the nomination, is far from a darling of liberals. And, while she is the favorite no matter who runs against her, it’s not hard to imagine someone like Howard Dean or Russ Feingold challenging Clinton from her ideological left. As we have written, Warren would have the strongest case to make as the liberal alternative to Clinton, but she seems uninterested in running.” (Writer’s Note: Or Vermont Senator Bernie Sanders)
The political advocacy organization, Third Way, threatens the perception of an united political front for the Republicans and Tea Partyists to use in the 2014 mid-term and 2016 presidential elections. The goals of the progressive/liberal economic populism movement of increased economic growth for the middle class and poor, wealth redistribution, and stronger banking and financial industry regulation are being threatened.
The article, “Economic Populism Is A Dead End For The Democrats”, was written by Jon Cowan and Jim Kessler. Cowan is Third Way’s is co-founder and president and Kessler is Senior Vice President for Policy and co-founder. Both have legislative experience and are well-connected in Washington DC politics. . Cowan served as Chief of Staff of the Department of Housing and Urban Development under Secretary, and now New York Governor, Andrew Cuomo (D-NY). Kessler worked on policy for New York Democratic Senator Charles Schumer.
Outraged by the connection of the federal government and the financial industry? Just wait, there’s more.
Who are the members of Third Way? There are some very prominent Democratic names as”co-chairs”: Congressman James Dingell and James Clyburn; Senators Clare McCaskill, Jeanne Shaheen, Mark Udall, Mark Pryor and Kay Hagan; and former Congressmen, Congresswomen and Cabinet members: Gabrielle Giffords, Jane Harmon, Ken Salazar and Blanche Lincoln. (Note: Senators Udall, Pryor and Hagan are facing tough re-election campaigns in 2014.)
But there is one name that sticks out, current Health and Human Services Secretary Kathleen Sebellius. What is the propriety and ethics of Sebelius allowing her name to be used by Third Way like this, when this organization could influence policies that come under HHS jurisdiction? But she’s just one of many involved in the federal government – financial industry revolving door.
Equally important, who are the banking and financial industry executives involved with Third Way?
David Heller – Mr. Heller lives in New York City and was formerly the Global Head of Equity Trading for Goldman Sachs.
David A. Coulter – Mr. Coulter serves as Managing Director and Senior Advisor at Warburg Pincus, focusing on the firm’s financial services practice.
Andrew Feldstein – Co-Founder and CEO of BlueMountain Capital Management, a leading alternative asset manager with $17 billion in assets under management and over 200 professionals worldwide. Prior to co-founding BlueMountain in 2003, Mr. Feldstein spent over a decade at JPMorgan where he was a Managing Director and served as Head of Structured Credit; Head of High Yield Sales, Trading and Research; and Head of Global Credit Portfolio.
Brian Frank – Brian served as Director of Harman International, Principal at W.R. Hambrecht + Co, and Analyst in the Merger & Acquisitions group at Lazard Freres.
Derek Kirkman – Mr. Kirkland is Managing Director and Co-Head of the Global Financial Institutions Group at Morgan Stanley’s Financial Institutions Group in Investment Banking.Mr. Kirkman was Managing Director at JPMorgan Chase, where he most recently served as Global Head of Fixed Income in the Proprietary Positioning Business.
Michael Novogratz – Mr. Novogratz spent 11 years at Goldman Sachs, where he became a Partner in 1998. Mr. Novogratz held the positions of President of Goldman Sachs Latin America, and the Head of Fixed Income, Currencies and Commodities Risk in Asia.
Barbara Manfrey Vogelstein – Ms. Vogelstein was a Partner of Warburg Pincus, one of the world’s largest private equity firms.
Then there are the Washington DC political establishment types:
Ronald A. Klain – In addition to his career in private law practice and business, Mr. Klain has extensive public service, most recently as a senior White House aide to President Barack Obama, and Chief of Staff to Vice President Joe Biden. Earlier, he served as Chief of Staff for Vice President Al Gore, Attorney General Janet Reno, the Senate Democratic Leadership Committee, and the Senate Judiciary Committee. Mr. Klain was also Associate Counsel to President Clinton for Judicial Selection, and a law clerk to Supreme Court Justice Byron White.
Thurgood Marshall, Jr. – Mr. Marshall is a partner at Bingham McCutchen LLP, and a Principal of Bingham Consulting Group. Mr. Marshall counsels and devises strategies for advancing clients’ interests before Congress. (Of course, he is also the son of the former Supreme Court Justice Thurgood Marshall)
Susan McCue – Ms. McCue served as the Chief of Staff for U.S. Senate Majority Leader Harry Reid (D-NV) from 1998–2006 where she built and managed his leadership, policy and political operations. In 2004, The Almanac of the Unelected said Ms. McCue “can be found at the center of nearly every major debate and agreement in the Senate.”
Andrew Parmentier –Mr. Parmentier served a brief tenure on Capitol Hill where he worked on financial services and capital markets issues for Majority Leader Richard Armey and House Banking Committee Chairman Jim Leach. Most recently, he was Group Head and Managing Director at FBR Capital Markets, where he founded and managed FBR’s Washington Policy Analysis team from 2000 until his December 2008 departure.
Ted Trimpa – Mr. Trimpa brings more than a decade of government relations and political consulting experience with a proven record of results. Trimpa is one of the country’s most sought-after advocates resulting from his deep understanding of the national and multi-state public policy, political and nonprofit landscape.
And one of the biggest DC financial political insiders of them all:
William M. Daley – William Daley served as President Obama’s Chief of Staff from January 2011 until January 2012. He was involved in all aspects and issues faced by the president and the administration, both domestic and foreign. Prior to his Chief of Staff role, he was Vice Chairman and Chairman of the Midwest for JPMorgan Chase, from 2004 until 2011. He became head of JPMorgan Chase’s Office of Corporate Responsibility in June 2007.
Notice any trends here?
This is how Third Way describes itself:
“Our senior team has decades of management, policy, political, communications and non-profit experience, including service as a federal agency Chief of Staff, presidential campaign communications director, Senate policy director, White House deputy and non-profit director, in addition to having founded three national advocacy groups.
Third Way is also led by a prominent private sector Board of Trustees, drawn from finance, industry, academia, the non-profit sector and government.”
Yes, Third Way, you sure do have a senior team of members who were deeply involved in causing the economic collapse, from which the United States and the rest of the world is slowly recovering.
And how are those banking and investment firms that were bailed out by the Federal Government doing now? Pretty well, it seems. However, they don’t seem to have learned their lesson – the big banks are still involved in risky trading activities, like derivatives, with depositors, investors and taxpayers’ money.
The reason for all the media attention to Third Way was the dispute it created with Massachusetts Senator Elizabeth Warren based upon an op-ed piece in the Wall Street Journal that Cowan and Kessler wrote:
“If you talk to leading progressives these days, you’ll be sure to hear this message: The Democratic Party should embrace the economic populism of New York Mayor-elect Bill de Blasio and Massachusetts Sen. Elizabeth Warren. Such economic populism, they argue, should be the guiding star for Democrats heading into 2016. Nothing would be more disastrous for Democrats. …
The political problems of liberal populism are bad enough. Worse are the actual policies proposed by left-wing populists. The movement relies on a potent “we can have it all” fantasy that goes something like this: If we force the wealthy to pay higher taxes (there are 300,000 tax filers who earn more than $1 million), close a few corporate tax loopholes, and break up some big banks then—presto!—we can pay for, and even expand, existing entitlements. Meanwhile, we can invest more deeply in K-12 education, infrastructure, health research, clean energy and more…. Social Security is exhibit A of this populist political and economic fantasy.”
The Fix in the Washington Post comments:
“From there, things got ugly. Lee Fang, writing in the Nation, examined Third Way’s ties to Peck Madigan, a Wall Street lobbying firm. Other liberal groups responded angrily to the column, denouncing Third Way as a front for the banking industry. Warren herself got involved on Wednesday, although she did not respond directly to Cowan and Kessler’s column. Instead, she sent a letter to chief executive officers at six major financial institutions, calling on them to disclose their companies’ spending on think tanks, although they are not legally required to do so.
“Shareholders have a right to know how corporate resources are spent, and, even more importantly, policymakers and the public should be aware of your contributions and evaluate the work of the think tanks accordingly,” the letter read.”
“The real goal of the Cowan/Kessler piece was to discourage Democrats from following Warren and Bill de Blasio, the new progressive mayor-elect of New York. Their op-ed was headlined “Economic Populism is a Dead End for Democrats,” and blamed Warren and de Blasio for encouraging a “left-wing…fantasy.” What the authors don’t seem to acknowledge is that both Warren and de Blasio won elections. They already have followers, and among the reasons for their victories is they’re willing to stand up for economic policies that don’t leave the average person in the dust.
That may not be to Cowan’s or Kessler’s taste, or to that of the current and former executives of Warburg Pincus, Goldman Sachs, and the other corporations and investment firms on Third Way’s board. But for all their chattering about Social Security’s insolvency, it’s their arguments that were bankrupt.”
When I read articles written by politicos, I ask two questions: Who is their target audience? What message are they attempting to send? In this case, it is obvious, Senator Warren is hitting a nerve with the fed-up American public. As a result, she is scaring the beejezus of the banks, financial industry and the politicos who serve/are in cahoots with them, such as Third Way.
Rest assured, the Third Way is not representing the interests of the common man.
Remember Senator Warren’s little dust ups with Treasury Secretary Geithner? Remember the new progressive economic movements’ leaders (Senators Warren, Sherrod Brown, Merkley, Sanders, eta al) and their criticism of the financial industry? Their battle with Goldman Sachs’ CEO and Chairman of the Board Lloyd Blankfein?
Warren and Geithner battle:
Senator Jeff Merkley and JP Morgan’s’ Jamie Dimon:
Even Senator Carl Levin got into the act- calling out Goldman Sachs’ financial “crap pools”:
You just know these financial industry politicos are just waiting to get back at the new economic populists, because Third Way’s money and privilege is at risk.
“One or two of these would be random noise. All of this, all at once? It’s a coordinated counterattack by Wall Street Democrats spooked by the party’s embrace of politicians like Elizabeth Warren, Sherrod Brown, Tammy Baldwin and Jeff Merkley. The future of the Democratic Party is a populist one, all that’s left is for time to whittle out the dead weight.
But this counterattack … it’s kinda pathetic. Warren will DOOM Democrats! Except that she is on the right side of American public opinion on issues of Wall Street dominance. That’s the whole definition of being “populist” after all. But Warren can only win in a place like Massachusetts! Only if you ignore what Sherrod Brown did in Ohio with virtually identical politics. Or the way Democrats like Jon Tester and Heidi Heitkamp won their solidly red states. Hint: they didn’t run Bob Kerrey’s playbook of campaigning on Social Security cuts and austerity”.
This political battle represents a real issue for the Democratic Party. President Barack Obama was elected with the campaign support of the banking and financial industry in 2008, but not in 2012, despite having big financial industry/politicos such as Timothy Geithner, Larry Summers and William Daley as part of his administration. Those three worked in the Clinton Administration. It would be no surprise if they resurface in the second Clinton Administration.
So the Oklahoma grandmother/Senior Senator of the Commonwealth of Massachusetts has the Third Way members’ panties in a bunch. If the Democrats maintain the majority in the Senate and regain the majority in the House, they ain’t seen nothing yet, like what happens when the modern version of The Glass-Stegall Act gets passed.
It is the same old issue that’s been fought since the 1940’s: Which is more important the people or big money? Whenever big money gets its way, everyone else suffers, including them. We are all still slowly recovering from the vast 5 years of economic damage that they caused.
There is the right, I mean, correct way, the wrong way, and now, the Third Way. I don’t care what the Third Way members state their positions on other issues, like immigration and climate change are. They are DINO’s – Democrats In Name Only. They are the wrong way. The correct way puts the economic interests of the people first – the Elizabeth Warren way.
UPDATE – 12/10/2013:
Rep. Allyson Schwartz (D-PA.), honorary co-chair of Third Way and gubenatorial candidate, is now a cosponsor of a bill to expand Social Security. That’s after Third Way president Jon Cowan, Jim Kessler, the group’s senior vice president for policy called the legislation “exhibit A of this populist political and economic fantasy.” The “fantasy” that is going to doom, DOOM, Democrats. Of course, Schwartz isn’t leaving Third Way. And she’s also coming pretty late to the “expand Social Security” party.
Also, the Volker Rule, which prevents banks from using the deposits of individuals to make speculative investments, such as derivatives, was approved by the five agencies that oversee the banking and financial industry.
This doesn’t go far enough in reigning in the big banks speculation activities, but it’s a start.
UPDATE – 12/12/2013:
Speaker John A. Boehner for the second day in a row used a news conference to air grievances against the conservative outside groups who have sought to strong-arm House Republicans into moving further to the right.
“Frankly, I think they are misleading their followers,” the Ohio Republican told reporters on Thursday morning. “I think they’re pushing our members in places where they don’t want to be, and frankly I just think they’ve lost all credibility.
“You know, they pushed us into this fight to defund Obamacare,” Boehner continued, in the lead-up to the government shutdown in October — which, Boehner added, “wasn’t the strategy I had in mind. The day before the government reopened, one of these groups stood up and said, ‘Well, we never really thought it would work.’
UPDATE – 10/6/2014:
On the front page of this morning’s Boston Globe “Third Way In Struggle For The Democratic Party’s Soul”
Third Way, backed by Wall Street titans, corporate money, and congressional allies, is publicly warning against divisive “soak-the-rich” politics voiced by populist Democrats. Its target: Elizabeth Warren, the Massachusetts senator whose rise to power two years ago helped galvanize Democratic grass roots against Wall Street and pushed the issue of income inequality to the forefront.
This is more than a grudge match. At stake for the Democratic Party is the support of middle-class, swing voters who decide elections.
Third Way ignited a clash in December when its leaders essentially declared war on Warren in a guest column in the editorial pages of The Wall Street Journal, warning Democrats not to follow Warren and New York Mayor Bill de Blasio “over the populist cliff.”
Many on the left were shocked, and angered. Warren’s allies saw Third Way as a proxy — being used by her enemies on Wall Street to scare off the rest of the party.
Copyright © December 2013, Michael A. Maynard, Stow, Massachusetts.
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