Think it Through

One year from now, we have the chance to tell all those corporate lobbyists that the days of them setting the agenda in Washington are over. I have done more to take on lobbyists than any other candidate in this race – and I’ve won. I don’t take a dime of their money, and when I am President, they won’t find a job in my White House. – Obama, Spartanburg, SC, November 3, 2007

Be careful what you wish for, you just may get it. Barack Obama won the Democratic nomination by separating himself from the rest of the Democratic candidates, especially Hillary Clinton, with a message promising to bring change to Washington. He used many rhetorical devices to get this point across, but his riff about lobbyists won him the most enthusiastic applause at every event I watched on C-Span.

We can be a party that says there’s no problem with taking money from Washington lobbyists – from oil lobbyists and drug lobbyists and insurance lobbyists. We can pretend that they represent real Americans and look the other way when they use their money and influence to stop us from reforming health care or investing in renewable energy for yet another four years.

Or this time, we can recognize that you can’t be the champion of working Americans if you’re funded by the lobbyists who drown out their voices. We can do what we’ve done in this campaign, and say that we won’t take a dime of their money. We can do what I did in Illinois, and in Washington, and bring both parties together to rein in their power so we can take our government back. It’s our choice.” Obama, Evansville, Indiana, April 22, 2008

Our own polling and focus groups for clients across the country in 2007 and 2008 told me that he had hit a nerve in the electorate. The word “lobbyists” had become more than a description of a particular profession, but a metaphor for something larger. It symbolized what was wrong with our government, our economic institutions, and our mass media in the nation’s capital. It was a metaphor for a presidency that was not listening to people, government agencies that did not perform, a Congress that represented banks and credit card companies and other powerful interests rather than the needs of average Americans, and a news media that willingly went along with the large deceits while focusing instead on who is up and who is down politically.

The public has it just about right, and Obama correctly exposed the nexus of money/lobbyists/government policy as a source of what is wrong with Washington.

As President he has instituted policies to break up that nexus. He already has instituted a ban against lobbyists going to the White House to plead their cases. He has also signed an executive order forbidding any person who leaves his administration from lobbying the government for the duration of his administrations.  These actions are good, and they are unprecedented.

But Obama’s virtually total ban on hiring lobbyists for his administration goes too far. The irony is that while this rule is intended to change Washington it will actually prevent him from effectively bringing about the changes he seeks in Washington. Specifically, the hiring ban on lobbyists misses the mark in two ways:

• First, it places all lobbyists in the same corral. The policy treats someone who lobbied for more federal help for poor children or for the Voting Rights Act the same as someone who lobbied for deregulating derivatives. One can be a professional lobbyist without opposing the kind of change Obama wants to bring to Washington; some lobbyists are fighting to upend the status quo. Disqualifying all people who have lobbied the government on any issue means that many of the professionals in Washington who are committed to the President’s agenda for change AND who know the most about foreign policy, finance, civil rights, health care, the environment, and about how to get legislation through the Congress are locked out of helping him succeed.

• Second, you do not have to be a lobbyist to be an agent of the status quo in Washington. The ban on hiring lobbyists leaves the executive branch door wide open to those who have not been registered lobbyists but who have made policy, or written think tank reports to Congress, or worked at universities or investment banks that represent the opposite direction from where President Obama wants to take the country. Think Larry Summers.

Obama should shed the no-lobbyist rule. He should embrace the pros who believe in what he is trying to do. He can use their talents, and still win the change he wants on his own terms.

Birch Bayh and LBJ

Senator Evan Bayh of Indiana is reacting surprised by the response he got when he announced the formation of a group of 15 Democratic Senators he called the Practical Coalition last week.

After his announcement, many liberal commentators and writers criticized Bayh’s group as too conservative. At the time, I asked a simple question in this space: Why? Why did the Senate need a practical coalition? Is the Senate in danger of becoming extremely liberal? What exactly about the President’s policies are impractical? Other than obstructing the President’s agenda and giving credence to Republican objections to the President’s plans for economic recovery, what exactly is their agenda?

In trying to answer these questions this week in the Washington Post, Bayh confirmed their validity. He says in the Post, “As moderate leaders it is not our intention to water down the President’s agenda. We intend to strengthen and sustain it.” Then later in the piece he provides an example:

We plan to be a positive force in our caucus, exemplified by the constructive role a number of us played in making reasonable adjustments to garner the GOP votes needed to pass the president’s economic recovery package.

What can you call this other than an effort to water down the recovery package?  The practical thing to have done on the recovery package was to follow what their constituents wanted them to do – support the President’s package, without Republican demands to shortchange money to states and use it for tax cuts.

Bayh’s own example demonstrates that the Practical Coalition believes its mission is to make overtures to Republicans to change the President’s policies.

The Democrats have a strong majority in the Senate, and the President has the confidence of the public. Making overtures to the party of “no” when the public wants a “yes” to this President’s program is anything but “constructive.” If Bayh wants to be helpful, he should pressure majority leader Harry Reid to stop making 60 vote agreements with Republican leaders. There is no need for these agreements. Democrats should allow the Republicans to filibuster whatever they want. Let them hold up the senate to stop the President’s economic recovery plan. Then we will see if the public truly wants it stopped, changed, or passed quickly as the President has asked. Dare the Republicans to do that once or twice and the need for seeking 60 votes will disappear.

Bayh, Senators Tom Carper of Delaware and Blanche Lincoln of Arkansas, and other members of the Practical Coalition talk is as if they alone speak for moderate voters. Someone needs to remind them that Barack Obama won a majority of moderates and suburbanites because they want him to fix the big problems that face our nation. This President does not need senators to tell him how to bridge to moderates.

When you consider all the effort Senator Bayh is putting into making sure Republican views are inserted into policy, you can only say with astonishment: What a difference a generation makes. The last Bayh to sit in the Senate was not a man whose life was evaluated by how many programs he could water down or how many big ideas he could trim into half measures.

Birch Bayh, Senator Bayh’s father, was the author of many big ideas during his time in the Senate, from 1963 to 1981. A liberal Democrat in a conservative state, he suffered no identity problems. He was not a small thinker or doer. He believed in equal rights for women, so he authored a constitutional amendment – the ERA, Equal Rights Amendment – that would have etched this pledge in our most important civic document. The states never ratified it but the efforts around trying to make it law drew women and women’s advocates together in ways that continue to this day. He did not “win” ultimately, but he brought about lasting change. This could not have come about if early on in the process he had decided to lower his sights because some people objected to his idea. One cannot help but think the younger Bayh would have settled for a “sense of the senate resolution on women’s rights,” and called it a victory. Practical, huh?

Birch Bayh also authored Title IX of the Higher Education Act, which for the first time required public colleges to provide the same funding for programs for women as men; and he authored the Constitutional Amendment to lower the voting age to 18. He remained throughout his career an unapologetic friend of organized labor.

I wonder what Birch Bayh thinks of the Practical Coalition?

Message to Evan Bayh — call home.

When the U.S. Government sent Eugene V. Debs to prison in 1918 for distributing antiwar pamphlets in violation of the Espionage and Sedition Act of 1917, the industrial barons breathed a sigh of relief. In the first two decades of the 20th century, big business detested Debs, the five-time Presidential candidate of the Socialist Party, champion of workers’ rights, and general trouble-maker for industry. He was sentenced to a ten-year prison term, but President Harding let him out in 1920. His arrest was clearly political.

Today, sitting in an Arizona jail cell is a man who during the 80’s and 90’s was detested by the new industrial barons of the 21st century – the CEOs of high tech corporations and financial security firms and giant accounting and insurance companies, especially the ones accused of securities fraud. They hated and feared his resourcefulness, his tenacity, and his gift for seeing through the veneer of false quarterly statements. As a lawyer, he was not intimidated by their power, and he amassed a personal fortune by winning settlements against large corporations engaged in securities fraud.

During the Clinton Administration, he warned Congress and the President of a rising tide of financial fraud and pleaded with Congress not to shut the court house doors to average investors, not to loosen regulations on derivatives and other shaky instruments, and not to reduce the funds for the Security and Exchange Commission. Republicans and some high level Democrats with ties to the financial industry, like Senators Chris Dodd and Harry Reid, and then Congressman Charles Schumer, ignored and even ridiculed his admonishments.

The louder he spoke, and the more lawsuits he filed against companies, the more enemies he made in high places. He had a target on his back, drawn by the business elite, who were pressuring the government to investigate their tormentor. Shortly after George Bush became President, word leaked out that the federal government was indeed pursuing a case against him.

Six years later, in the fall of 2007, the United States government charged San Diego lawyer Bill Lerach and other members of his firm with deceiving the courts about whether they paid people to be their plaintiffs. Lerach pled guilty.

Lerach was wrong to break the rules on paying plaintiffs and even more wrong not to admit it right away. Lerach was a victim of his enormous ego and an insatiable appetite for all that life can offer. He was not going to let something he perceived as trivial, such as the prohibition on paying plaintiffs, limit his ability to make money or cause mayhem in corporate boardrooms. He felt he could not wait for plaintiffs to come to him. When he saw fraud, he wanted to file a case.

From 1991 to 1997, I conducted opinion research, helped prepare Congressional testimony and handled some public relations for the National Association of Securities Lawyers, which included Lerach. I worked directly with him a number of times, and each time I came away impressed by his brain and his ability to focus but worried about his total lack of self-doubt and his constant hunger for more, more , more, of whatever interested him at the time. It is not hard to believe he would have gone too far.

I believe it is important, however, to separate the person from the product of his labors. While Lerach’s motives may have been monetary, his impact was immensely salutary for society. You cannot say that about the people who wanted him to go away.

In an era of government deregulation and non-enforcement, he became practically the only entity that made swindlers think twice. The records show he won over $10 billion in claims for millions of investors who believed they were defrauded by financial swindlers. In nearly every case, the fraud defendants insisted on sealing the records, closed to public scrutiny. Then they would stand on the courthouse steps and intone how they have paid ransom money to Bill Lerach in a frivolous lawsuit, just to make the suit go away. The way it works when you are at the top is: hide the facts, pay huge settlements, which corporate insurance covers, and then denounce the suits as meritless.

Lerach was a leading watchdog in hundreds of cases, helping to uncover the Savings & Loan scandals of the ’80s, as well as the Enron and Worldcom debacles. Corporate wrong-doers everywhere celebrated when he was convicted in February 2008 and sentenced to two years in prison.

There is no excuse for Lerach breaking the law. But we should also recognize that the laws, the regulations, the court procedures, even the press coverage are all stacked in favor of the powerful. Every day Lerach was on the prowl evened the odds a little bit for the rest of us.

I realize Lerach is no martyr, like Eugene v. Debs. He is an aggressive lawyer who sought fortune and fame. You will not see his name on Amnesty International’s list of political prisoners. But when you consider the wide discretion prosecutors have in terms of whom to spend their resources investigating, you might conclude that Lerach’s imprisonment is a political act by our government.

President Obama could make a political statement of his own if he pardoned Lerach. It would send Wall Street a message louder than the day’s opening bell – the junk yard dog may soon be back at the gate, so watch your step.

This week Senator Evan Bayh of Indiana announced he had organized 15 Democratic senators to form the “Practical Coalition” to work for more “moderate” policies.

My question is: Why?

• Have we seen the Senate pass wildly liberal legislation lately?

• Are the Democrats fighting to redefine themselves, at a time when the public has embraced the new Democratic President and the party controls both houses of Congress?

• Is it a political message training camp for centrists like Bayh and Mark Warner of Virginia to learn how to run for President while keeping their audiences awake?

• Is this just a tool for Bayh to run for majority leader after 2010?

• Does Bayh think he needs to do this to win reelection in Indiana?

What is it?

When Bayh says we need more practical policies it can only mean he wants more conservative, anti-government, and pro-business policies. This prompts the question: has Bayh been in Tahiti for the last five months?

We have a Democratic president and strongly positioned Democratic House and Senate because Americans want honest and responsible government that will take action for them against forces that are too large for individuals to tackle on their own. This means protect them from the abuses of big business, and provide programs that work. They are fed up with bail outs and bonuses. They are not against the government spending money on our schools and energy resources and transportation that will create jobs.

President Obama’s victory created a new constituency consisting of the traditional Democratic liberal base, as well as a majority of moderates, suburbanites, and people earning over $200,000 a year. This new coalition was not drawn to Obama because he promised to be more pro-business, or more moderate in tackling the big problems that confront our country, but rather because he offered the promise to hold government and business accountable and to enact big changes like health care reform.

The Practical Coalition reminds me of the Democratic Leadership Council, a tool of Democratic governors and members of Congress who were searching for a new profile for the Democratic party in the 1980’s when Ronald Reagan was president. Democrats like Bill Clinton, Bruce Babbitt, Al Gore, and Dick Gephart started the DLC because they felt the party needed to redefine itself away from what they perceived was its liberal cast. Reagan had won over working class Democrats who were fed up with Jimmy Carter’s double digit inflation and unemployment. Anyone who disagreed with Reagan was dubbed a tax-and-spend Democrat. So the DLC set out to define the party as one that would not tax as much and not spend as much.

The DLC adopted much of Reagan’s rhetoric about responsibility and smaller government, and started a think tank that cranked out half-baked ideas echoing the party they were supposed to oppose. The ideas were usually conservative and nearly always pro-business. I remember reading one DLC treatise on why Democrats should oppose raising the minimum wage because it would hurt the economy. A more famous DLC initiative was welfare reform, the idea of taking away health, nutrition, and child care benefits from mothers with dependent children who were trying to work. When it passed in Congress, President Clinton predicted it would decrease the welfare rolls. He was right, it did knock many single moms off public assistance. It also helped to increase the poverty rolls for families and single moms with kids. (for families, poverty rates rose from 9.3% of families in 1999 to 9.8% in 2007, and for single mom families, it rose from 27.8% to 28.3%).

It remains to be seen what bright ideas the Practical Coalition will put forth. Is their reason for being to reduce federal help to state governments during the recession? Is it to go slow on health care reform so we don’t upset the insurance companies?

These are not the priorities of the broad coalition of voters that that elected Obama President to solve our nation’s problems and bring about big change.

Message to Bayh and company – the DLC is history. If you truly want to be practical and move the country forward, disband and support the president.

Every now and then, something happens that reminds us what suckers the news media can be. The most recent example is earmarks. The news media generally lionize the politicians who rail against earmarks, the term used to describe how Senators and members of the House of Representatives win government funds for pet projects in their states without going through the normal legislative process.

Senator John McCain, coming off a recent 16-month run as a maverick committed to comforting the comfortable, has decided to return to his previous vocation of protecting the country from government waste and abuse.

He casts the earmarks as one of the largest threats to our democracy, just behind Al Qaida and tax hikes. He examined a spending bill being considered by the Senate last week and began ridiculing short-hand descriptions of earmarks that were added to the bill as examples of horrific waste. New York Times columnist Maureen Dowd, usually a more skeptical analyst, bought the McCain line that earmarks are ruining the country. She wrote an admiring piece quoting McCain and listing the offensive earmarks:

• 2.1 million dollars for the Center for Grape Genetics in New York.
• 1.7 million dollars for a honey bee factory in Weslaco, Texas.
• 819,000 dollars for catfish genetics research in Alabama.
• 200,000 for a tattoo removal violence outreach program to help gang members shed visible signs of their past.

All of these sound to me like programs that will pay dividends well beyond the initial investment: creating a more robust wine industry in New York or catfish industry in Alabama, or saving the threatened honey bee population, or maybe saving one teenager from being pulled back into gang association and gang violence. I can think of many worse ways to spend government money. By McCain’s own numbers, the Senate earmarks amount to less than 2% of the funds in the overall spending bill ($7 billion dollars in an overall $400 billion spending bill).

Other earmarks, pointed out in David Herszenhorn’s story in the New York Times last week, sound more like tofu than pork, because they will sustain their communities for a long time: $278 million for the Second Avenue subway in New York City, $210 million for plans to connect the Long Island Rail Road to Grand Central terminal in Manhattan, and $92 million for a light rail line in Phoenix.

The sanctimonious thundering against these projects is aimed at the taxophobic Americans who live in fear that the government may actually spend some money to help improve somebody’s living condition. Dowd quotes Senator McCain saying these earmarks “jeopardize our future.”

Wrong. These earmarks are a speck in the overall government policy. Their result is overall positive, but they are less than two percent of what we should be worrying about.

What jeopardizes our future is when Senators like McCain oppose health care reform that the country desperately needs, or support huge tax cuts for wealthy people who do not need them, or support spending hundreds of billions of dollars – a far cry from $7 billion on earmarks – to wage war against a country that is of no threat to us.

The firestorm over earmarks is a way to distract the press and the public from what really threatens our well being. Somebody should tell McCain and others to stop whining over saving the honeybees and address the larger issues that will truly determine our future.