As is so often the case today, bad news is good news. Sen. Elizabeth Warren (D-MA) had a terrible loss when an important provision of the Dodd-Frank financial reform was weakened over her very vocal objections, slipped into the critical budget deal when no one was supposed to be looking. But if you read the press, it was good for her because it increased her stature at a time when calls for her to run for President are only getting louder.
There are now two prominent calls for her to run, one by MoveOn and another independent one pushed by a group of major Obama backers. A true hero usually heeds the third call. The way the press is writing her story, that’s about to come. What does it all mean?
Sen. Warren’s real strength isn’t her status as a Progressive icon, a modern day Henry Wallace in a world still waiting for FDR. That image is not only wrong, it’s propaganda that has been spewed for the purposes of a political machine that seeks to divide the nation into Democrat and Republican, blue and red, for its own purposes. Her message is beyond that.
That’s the real magic of Sen. Warren that, for all the great press, has been utterly missed.
The issue at hand this time is that “swaps”, or market traded insurance policies that pay off if triggered by another financial event, can now be held by banks that have an implicit backing by a federal bailout. The most common of these are Credit Default Swaps (CDSs), which were horribly abused by Lehman among other companies before the reform. They were kept away from public backing because they carry far too much risk that is hard to quantify.
Mr. President, Democrats don’t like Wall Street bailouts,Republicans don’t like Wall Street bailouts. The American people are disgusted by Wall Street bailouts. And yet here we are five years after Dodd-Frank with Congress on the verge of ramming through a provision that would do nothing for the middle class, do nothing for community banks, do nothing but raise the risk that taxpayers will have to bail out the biggest banks once again.
The language here is important. Sen. Warren has said that she was once a Republican because, “I thought that those were the people who best supported markets. I think that is not true anymore.” She has carefully staked out her party affiliation since becoming involved in politics, and it’s not necessarily as a Democrat. In her book A Fighting Chance she appeared to rule out a run for President, the ultimate insider, with this now famous passage:
Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders.
There’s only one reason to say this so prominently, and that’s to stake your claim to being an outsider. Sen. Warren has championed that role well, an a somewhat darkly pragmatic read shows that it actually positions her very well to run for President. The reason is simple – there are two political persuasions in the US today, and they are not Democrat and Republican. They are Establishment and Reform, Inside and Out.
As she noted herself, the position she is taking is at least as much at home in the Tea Party as it is among Progressives. Getting past the artificial divides that are reinforced in an unthinking media is obviously the hard part, but the Establishment is itself hopeless divided, operating as if it believes its own BS. The opening for Reform, the true outsider coming in, is natural if the people of this nation get past the artificial divide that has been thrust on them.
By enhancing her outsider credentials, Sen. Warren has made her position stronger. But her real goal, whether as President or as the key advocate for reform, has to be to unite the people beyond the nonsense that separates and marginalizes their true interests. We can’t yet call her big loss good news because there is no sign of unity developing.
But for all that, we do have Sen. Warren – standing firm and not letting what little reform we’ve actually had implemented go down without a fight. Whether or not this becomes the kind of movement that finally topples the Establishment and institutes reform remains to be seen.
Was it a good week for Sen. Warren? Let’s see if she has a good few months first. The best part is yet to come, no matter what.