Salon.com > Matt Stoller

A dream SEC chief

Thu, 06 Dec 2012 15:30:00 +0000

On Dec. 14, Mary Schapiro will step down from her role as the chairwoman of the Securities and Exchange Commission. Barack Obama will shortly appoint a new leader to take her place, a leader who has a big task in rebuilding the credibility of an agency tasked with protecting the capital markets from fraud and ensuring transparency in the markets. I've asked Neil Barofsky, whose name has been floated by Simon Johnson in the New York Times as a possible chairman for the agency, what he would do to reform the Securities and Exchange Commission.

The stakes are high. In the 1930s, the SEC cleaned up a stock market that had gone out of control, rigged by insiders and ultimately wrecking the economy. During this most recent financial crisis, the SEC operated as Barofsky put it, as a "backwater.” SEC Chairman Chris Cox was known as a passive regulator who did not understand the markets. Whistle-blower Harry Markopoulos later embarrassed the SEC by revealing he had tried to tell them about Bernie Madoff's $20 billion-plus fraud for eight years, to no avail. Obama appointee Mary Schapiro has done marginally better, but the SEC has still been battered in the courts and in Congress. And Schapiro recently lost a high-profile fight to regulate money market funds, which were a key part of the highly vulnerable shadow banking system.

Is Wal-Mart the enemy?

Thu, 29 Nov 2012 01:00:00 +0000

It's been a week since the Wal-Mart strike of Black Friday. Strike, perhaps, is a misnomer. No one tried to stop sales at any Wal-Mart stores. There were no picket lines to cross. And the essence of a strike, to withhold labor, did not happen. These were protests organized to generate headlines on the most important shopping day of the year. And they did generate headlines. If that's all they did, then Wal-Mart won. If they are the start of something, the beginning of an organizing "marathon,” they will be a turning point. It's impossible to know now. Because what Wal-Mart really fears, strikes to shut down their ability to generate massive profits, isn't what the organizers are seeking. Black Friday did not show a real fight. It was like shadow boxing, or a test to gauge the strengths and weaknesses between workers and Wal-Mart.

I spent some time at one of these megastores last week, and what I really noticed were the kids. The best way to understand Christmas in modern America is to watch how children react to the intense marketing directed their way. Kids are the purest representation of our values, because they haven't yet learned to disguise their desires and feelings. They don't yet know they are being marketed to, they want what they want, and they are going to bug their parents to get it. In fact, piggybacking on innocence is a standard tactic in children's marketing, known as accentuating "the nag factor." But they also want to be adults, to help, to be taken seriously.

Obama’s second term: Can liberals trust the president?

Sat, 10 Nov 2012 14:00:00 +0000

Every election is historic because history keeps moving no matter what we do. What truly defines an election as important is not the vote totals but the fight over the narrative that comes immediately after the outcome. These narratives are essentially stories told by various representatives of interest groups on television and in newspapers to justify their preferred policies.

Here's what we do know: Obama won a very close election with lower voter turnout than 2008 and a much more slender margin of victory. Democrats kept the Senate with a slightly more liberal caucus, and Republicans kept the House. Those are the facts.

There are two narratives being told about what happened: One, Obama won this with a savvy, data-driven reelection campaign and a bare-bones, if effective, first term of policymaking; two, this election represents the rise of a left-wing, black, brown and young America, an America opposed to rampant inequality and racism.

These two narratives have important differences. The first implies a continuation of the centrist policies and rising inequality of Obama's first term. The second implies a sharp left turn on policymaking.

Why is the left defending Obama?

Sat, 03 Nov 2012 14:00:00 +0000

The 2012 election is next Tuesday. We face a choice between Barack Obama, a candidate whose Presidency we can examine and evaluate, and Mitt Romney, who is a dangerous cipher. My argument - made last week in "Progressive Case Against Obama", is that progressives should evaluate these risks honestly, with a clear-headed analysis of Obama's track record.This piece sparked a massive debate that has had both Obama loyalists and Republicans resort to outlandish name-calling, evidently as a result of their unwillingness or inability to address the issues raised. .

How Elizabeth Warren saved taxpayers $1 billion

Tue, 30 Oct 2012 16:15:00 +0000

While Mitt Romney and Barack Obama battle nationally for the right to occupy the White House for the next four years, perhaps the second most contentious significant race in the entire country is occurring in Massachusetts. That is where the Democratic Party's candidate for Senate, self-described advocate for the middle class Elizabeth Warren, faces off against Republican Scott Brown. Polls show the race is close, and the bitterness of the rhetoric matches the polling.

One of Scott Brown's most consistent arguments is that Elizabeth Warren represents Obama's liberal "tax and spend" policies leading to big government. But a new paper by Stanford political scientist Lucas Puente published in PS. Political Science and Politics shows that Elizabeth Warren's work on the Congressional Oversight Panel was highly advantageous to the taxpayer, saving over a billion dollars money by taking a skeptical approach towards the Treasury Department's bailout plans.

The issue has to do with an obscure part of the Troubled Asset Relief Program, or TARP, known as warrants. This was a piece of the bailout that was designed to allow the government to profit from its investment in banks.

The progressive case against Obama

Sat, 27 Oct 2012 12:00:00 +0000

A few days ago, I participated in a debate with the legendary antiwar dissident Daniel Ellsberg on Huffington Post live on the merits of the Obama administration, and what progressives should do on Election Day. Ellsberg had written a blog post arguing that, though Obama deserves tremendous criticism, voters in swing states ought to vote for him, lest they operate as dupes for a far more malevolent Republican Party. This attitude is relatively pervasive among Democrats, and it deserves a genuine response. As the election is fast approaching, this piece is an attempt at laying out the progressive case for why one should not vote for Barack Obama for reelection, even if you are in a swing state.

Trans-Pacific Partnership: The biggest trade deal you’ve never heard of

Tue, 23 Oct 2012 16:13:00 +0000

If you listened to the debate last night between Barack Obama and Mitt Romney on foreign policy, you would have heard a great deal on Israel, Iran and Libya, and a bit on China. The two rivals even touched on education policy, military spending and tax cuts for the wealthy. What you would not have heard was any mention of what could potentially be the most significant foreign and domestic policy initiative of the Obama administration: the Trans-Pacific Partnership. This agreement is a core part of the "Asia pivot" that has occupied the activities of think tanks and policymakers in Washington but remained hidden by the tinsel and confetti of the election. But more than any other policy, the trends the TPP represents could restructure American foreign relations, and potentially the economy itself.

Why isn't trade a part of the election? After all, in 1992, Ross Perot made the last successful third-party run for the presidency, mostly on the strength of his anti-NAFTA rhetoric. Today, however, on the core question of these trade agreements, the parties basically agree. President Barack Obama has pledged to double U.S. exports as a core policy goal, and the Democratic platform lists the TPP as a "historic high-standard agreement" that will help accomplish this. The GOP platform pledges that "a Republican President will complete negotiations for a Trans-Pacific Partnership to open rapidly developing Asian markets to U.S. products." Both party leaders argue that exports are one key to creating high-quality American jobs.

Clinton’s no liberal hero

Fri, 14 Sep 2012 19:57:00 +0000

Today, former President Bill Clinton sits smack-dab in the center of the presidential race. He not only gave the most significant and widely praised speech at the Democratic Convention, he is practically the face of the Obama campaign. In one campaign ad, Bill Clinton speaks to the camera, blasting away at Republican tax cuts for the wealthy and Wall Street deregulation. Paul Krugman excitedly proclaims Clinton as the "explainer-in-chief," and Ryan Lizza penned a long and often cited piece in the New Yorker about how Barack Obama managed to turn a tense relationship into a productive one.

Bill Clinton is a popular, beloved figure, one of the most respected in America. It's not a mystery why -- the economy did well in the late 1990s, floating on a dot-com bubble and low oil prices. But his presence, in light of the financial crisis and the repudiation of the Clinton legacy in the 2008 primary, is an incredibly odd turn of events, and neither elite journalists nor the party establishment wants to convey why.

What are we cheering for?

Thu, 06 Sep 2012 16:47:00 +0000

In 2008, the Democratic National Platform Committee spoke to the anger, pride and righteousness of civil liberties-loving Democrats. The platform proudly said that "we will ensure that law-abiding Americans of any origin, including Arab-Americans and Muslim-Americans, do not become the scapegoats of national security fears." In 2012, the Democratic National Convention dropped a Muslim prayer service from its online calendar after receiving criticism from conservative groups, and the FBI sent agents to question the Charlotte Muslim community about its event. Naturally, this year, the Democratic National Platform Committee doesn't mention Muslims or Arabs.

Meanwhile, writer JA Meyerson, attending the convention, overheard New York delegates derisively talking about Occupy Wall Street's fixation on drones and presumed whistle-blower Bradley Manning's torture and imprisonment. This type of talk, according to one delegate, was really alienating Democrats from Occupy Wall Street, who presumably should have been functioning as a support arm to the Democratic Party.

U.S. housing policy: “Absolutely insane”

Fri, 03 Aug 2012 16:20:00 +0000

If you were to read the headlines on the ongoing foreclosure crisis, you'd get very confused. Are "Foreclosure Filings Increasing in 60% of Large U.S. Cities," as Bloomberg reports? Are "Foreclosure Machines Still Running on 'Low,'" as the Wall Street Journal says? Or are we in the midst of a "Foreclosure Surge," as CBS News would have us believe? The answer, unfortunately, is that we don't really know.

Six years after the foreclosure crisis began in earnest, as former Congressional Oversight Panel vice chair and current AFL-CIO general counsel Damon Silvers put it, "it's impossible to get reliable, comprehensive information on foreclosures." The government is still not effectively measuring the single biggest weight on the American economy, the foreclosure epidemic that has claimed millions of homes.

The big banks win again

Fri, 10 Feb 2012 15:00:00 +0000

On Thursday, a group of well-connected and powerful men announced that the federal government and state attorneys general had agreed to a multibillion-dollar settlement of claims relating to falsified foreclosure documents. The image of former corporate lawyer-turned-Attorney General Eric Holder and Iowa official Tom Miller complimenting each other on their courage and bravery was a stark reminder of how little power foreclosure victims have in Washington. The terms of the settlement were still secret, but we saw hints of what is to come: The website set up to inform the public noted that homeowners may not know for up to three years whether they are eligible for help.

Rather than settling anything, this agreement is simply a continuation of the policy framework of both the Bush and the Obama administrations. So what, exactly, is that framework? It is, as Damon Silvers of the Congressional Oversight Panel, which monitored the bailouts, once put it, to preserve the capital structures of the largest banks. "We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks," said Silvers in October, 2010. "We can’t do both." Writing down debt that cannot be paid back -- the approach Franklin Roosevelt took -- is off the table, as it would jeopardize the equity keeping those banks afloat.