Melissa Bean, (IL-08), bluest of Illinois’ blue dog Democrats, recently served as the temporary chair of the House Financial Services Committee which was hearing testimony about the need to reform the country’s casino-like financial system. During her brief time in the power seat, what was her major action? How about, shutting down the only advocate for progressive change!
Okay, that’s not too surprising for Bean, but what is depressing is that she seems to be taking her cues from one of the most liberal and powerful Democrats in Congress.
Harper’s Magazine writer, Ken Silverstein, observes that since the financial crisis of 2008, "Everyone rational knows that there is an enormous need to seriously reform the market for financial derivatives"(1). He’s referring to the infamous ‘credit default swaps,’ which Warren Buffet famously tagged as, "instruments of financial mass destruction". They helped bring on our current financial crisis, and they still pose a serious threat to the nation’s financial stability.
So when the Congressional committee charged with overseeing the nation’s financial markets announced hearings aimed at crafting the needed reforms, you could almost hear the nation sighing a collective, "Finally, the good guys are taking charge". Or so we thought.
Then we learned that the committee’s chair, the liberal Barney Frank (D-MA), had invited a panel of eight guests who were distinguished by their uniformly pro-industry positions(2). They were a collection from the same gang that got us into this financial mess.
Fortunately, one reform minded group, Americans for Financial Reform, questioned that stellar line-up as being a tad slanted toward the very corporations and organizations that benefit from unregulated derivatives markets.
Then we learned that the committee’s chair, liberal Democrat, Barney Frank, had invited a panel of eight guests who were distinguished by their uniformly pro-industry positions(2 ).
They included representatives from Cargill (Financial and Risk Management), Morgan Stanley (on behalf of the Securities Industry and Financial Markets Association), Managed Funds Association (which, through one of its lobbyists, has delivered significant "bundled" donations to Frank), Christopher Ferreri of the Wholesale Markets Brokers Association, Prudential Financial, Chatham Financial and the U. S. Securities and Exchange Commission, Division of Risk, Strategy, and Financial Innovation (also known as Wall Street’s farm team)(2). In other words a crew from the same gang that got us into this financial mess.
Not to worry. To demonstrate the absolute integrity and fairness of America’s legislative process, our nation’s ruling party, (the Democrats) allowed one non-industry connected reform advocate to testify. He was Robert Johnson of the Roosevelt Institute and a former economist with the Senate Banking and Budget Committee (3). While well qualified, Johnson was definitely outnumbered.
The treatment dished out to Mr. Johnson at the hearing, according to the Harper's account, was absolutely despicable, and the main disher was our local Illinois hero, Melissa Bean.
Johnson, who came last, offered the only serious critical viewpoint, saying that the American public had been "quite demoralized by...the bailouts that we experienced last fall." After listening to a few minutes of his testimony, Congresswoman Melissa Bean—an industry-funded committee member who chaired the hearing because Frank was absent—had heard enough. "I’m just going to ask you to wrap up because we’re running out of time," she told Johnson.
Johnson gamely continued. "When I hear the testimony today that are largely financial institutions and end users, I believe that I represent a third group that comes to the table, which is the taxpayers, the working people of the United States," he said.
"I do need a final comment," interrupted Bean(4).
According to Bean, Mr. Johnson’s desire to present views more typical of the American people was simply out of order. And I can see her point. By what right do the taxpayers and working people of the United States question the words and actions of those high and mighty financial executives or the members of the House Finance Services Committee? Those executives paid good money for the Committee’s attention and votes and by God they got both.
And just to make sure Johnson’s subversive testimony didn’t see the light of day, his was the only testimony not posted at the Committee’s website, where testimony from the other 8 witnesses can be found. Why? The Committee floated several BS reasons which I repeat for your amusement, a)it hadn’t been received, b) it had to be submitted as a PDF, c)the committee was having IT problems, and finally, d)the committee’s general counsel would not allow posting of the testimony because Johnson had not submitted it during the hearing—which was impossible because he was invited only at the last moment(1). We’re so lucky the Republicans aren’t in power, or are they?
None of this about Bean will surprise folks who follow her neo-liberal antics. Ryan Grim of Huffington Post reported (10/19/09) that Bean and a fellow Democrat and Committee member, Walt Minnick (D-ID)offered an amendment that would have scrapped the proposed Consumer Financial Protection Agency and forbid states from enforcing stricter financial regulations than the federal governments, respectively. Fortunately, some principled Democrats including Illinois’ Attorney General Lisa Madigan opposed the destructive amendment. It was defeated, at least for the time being.
Why is this happening? Why are the Democrats--charged with reforming a corrupt system--not even pretending to listen to the Democratic base? The answer can be found in the latest data on political donations. It seems that the FIRE PAC (Finance, Insurance and Real Estate Political Action Committee) paid members of the House Financial Services Committee $634,535 in 2009.
Not surprising, Melissa Bean received the lion’s share of the money. Of the FIRE-PAC’s donations to Committee members in 2009, Bean received $269,800 almost 43% of the total distributed (6). People in her district should be so proud, their representative is number one! In something.
The truly sad thing about the Bean story is that this 'corporate puppet' looks to be right at home in the Democratic Party. The Party leaders seemed pleased with her and why not? Is she really much different from many other Democratic Party Leaders?
When in 2006 the Democrats took control of the Congress, the ‘liberal’ Mr. Frank ascended to a seat of real power in this country. As chairman of the House Financial Services Committee, Frank steers a group that oversees the nation’s entire financial services complex, including the securities, insurance, banking, and housing industries. And he’s on the left! Right?
Then when Barack Obama ascended into the White House, it appeared that progressive brilliance existed at both ends of Pennsylvania Avenue. No wonder that many of us (me too) thought, we’re certainly going to see some progressive shit happen now! Frank would write substantive, progressive legislation and Obama would sign it into law.
But I've had to re-learn some basic lessons. In our system, power comes not from pretty campaign speeches, or labels, but money. And Frank receives ample sums from the FIRE PAC. In the 2007-2008 campaign cycle, FIRE PAC industry and individual donations gave roughly one million of the $2.2 million in campaign dollars that Frank received. So far in the 2009-2010 cycle, of the $1.25 million raised by Frank, FIRE related donations account for nearly $400,000(7). That kind of money insures that incumbents remain in office. Most of the other Financial Services Committee Democrats also receive serious amounts from FIRE PAC.
So it’s no wonder that Frank’s Committee invited only FIRE honchos and lackeys to the ‘reform’ hearings. To paraphrase Chicago’s first Mayor Daley, "If a man can’t help a generous friend, who should he help?" Why complicate things by inviting outsiders and nay sayers? They can be so negative. And that kind of negativity can douse the hope factor.
Not surprising either is that the ‘reform’ legislation coming out of Frank’s Committee looks to be perp-friendly. Or as Rob Johnson described it, "Very industry influenced. We had a crisis and they [the Committee] are pandering to the perpetrators(8)."
This script is becoming all too familiar. The people complain bitterly about one of the many dysfunctional governmental systems in the US today. Then some Democrat, who rules an important committee, responds with righteous sounding statements lamenting how the dysfunctional/corrupt system is causing pain to the American people, and that something needs to be done. Soon a hearing is scheduled allegedly to get to the bottom of the problem and fashion appropriate solutions that will return justice to the land and hope to the people. But funny thing, getting to the bottom means talking only to people at the top.
Which brings to mind Senator Max Baucus (D-Montana). He attacked the job of writing health care reform legislation by inviting only insurance health industry dons and asking them how his committee should reform their criminal practices. Baucus refused to invite even one person from outside the industry’s influence. And when a few Single-Payer spokespeople did show up at his hearing to exercise their democratic prerogatives to speak truth to power, the kindly Senator had them arrested.
Lesson learned: While Melissa Bean is definitely an obstruction to the progressive movement today(9), perhaps a more insidious foe lurks in the form of those ‘liberal’ Democrats who continually polish their liberal/progressive credential in public, while betraying the people in the privacy of their committee rooms. Yes, Bean works overtime to block progressive initiatives, but clearly she gets help and encouragement from some senior liberals within the Democratic Party.
Lesson to be learned: How can the Democratic Party be rescued from its neo-liberal leaders?
- Silverstein, Ken, An Object Lesson in Governmental Failure: Derivatives reform, Harper’s Magazine, Oct. 2009 at: http://harpers.org/...
- Oct. 7, 2009: House Committee Hearing / Submitted Testimony, Federal Reserve, http://www.stlouisfed.org/...
The House Committee on Financial Services holds a hearing titled "Reform of the Over-the-Counter Derivative Market: Limiting Risk and Ensuring Fairness."
Testimony from Gary Gensler, chairman, Commodity Futures Trading Commission•
Testimony from Henry Hu, director, Division of Risk, Strategy, and• Financial Innovation, U.S. Securities and Exchange Commission
Testimony from Jon Hixson, director, Federal Government Relations, Cargill Inc.•
Testimony from René Stulz, Everett D. Reese Chair of Banking and• Monetary Economics, Fisher College of Business, The Ohio State University
Testimony from Scott Sleyster, CFA, chief investment officer, Domestic, Prudential Financial•
Testimony from David Hall, chief operating officer, Chatham Financial Corp.•
Testimony from James Hill, managing director, Morgan Stanley on behalf of SIFMA•
Testimony from Stuart Kaswell, executive vice president• & managing director, general counsel, Managed Funds Association
Testimony from Steven Holmes, director of treasury operations, Treasury Department, Deere• & Company World Headquarters
Testimony from Christopher Ferreri, managing director, ICAP on behalf of the Wholesale Markets Brokers Association•
Testimony from Rob Johnson, director of economic policy for the• Roosevelt Institute in New York on behalf of Americans for Financial Reform
- Rebel Capitalist Democrats Censor Reform Advocate Economic Populist website on Fri, 10/30/2009 - 06:37, at: http://www.economicpopulist.org/...
- Stet: Rebel Capitalist
- Stet: Rebel Capitalist
- PAC donations flow to financial reform opponents, U. S. PIRG, Oct. 12, 2009. At: http://static.uspirg.org/...
- Open Secrets.org. Congressman Barney Frank. At: http://www.opensecrets.org/...
- Stet: Silverstein
- Melissa Bean, one of 6 Democrats to vote against Bill taxing AIG bonuses. In a vote to levy a 90 percent tax on the outrageous bonuses promised to executives of the insolvent American International Group, [Melissa] Bean was the only congressperson from Illinois -- and one of only six Democrats nationwide -- to vote against the measure.