I want to draw everyone's attention to this one specific part that relates to the anger from the Left about the lack of criminal prosecutions against banks. You know, the "why won't he perpwalk the bastards in handcuffs" question. It turns out that we at the TPV had gotten it right all along. The reason you haven't seen a flood of criminal prosecutions on Wall Street is because what the banks did to cause a financial upheaval in this country was enabled and made legal - mostly by Republicans, but also by Democrats with financial deregulation. Here's the president:
THE PRESIDENT: Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn't necessarily illegal, it was just immoral or inappropriate or reckless. That's exactly why we needed to pass Dodd-Frank, to prohibit some of these practices.Why so much of the so-called Left doesn't get this simple point is beyond me. These people are supposedly intelligent, no? Criminal activity is not what you look at and say "OMG this is criminal!" It's what the law defines as criminal, and what the law defines as necessary criteria to prove a criminal case. Don't tell me this stuff is new to you. In this country, we have legalized bribery (uhh, Citizens United and unlimited corporate campaign cash, anyone?). We have legalized intimidation enforced by states (see "waiting periods" for women seeking abortions).
... I think part of people's frustrations, part of my frustration, was a lot of practices that should not have been allowed weren't necessarily against the law, but they had a huge destructive impact. And that's why it was important for us to put in place financial rules that protect the American people from reckless decision-making and irresponsible behavior.
And so we have - or at least had - prior to the Dodd-Frank Act - legalized gambling, bribery and dark-alley trading. This is what was accomplished by 8 years of Reagan, 12 years of the Bushes, and I'm sorry to say, the Clinton years. President Clinton did a lot of good things for our country and for that he is to be commended, but by signing the repeal of Glass-Steagall into law, dismantling the last of the protections that the American people had built themselves in the aftermath of the Great Depression. This repeal let banks essentially do whatever they wanted and make up any financial ... umm... "product" that they wanted. Bill Clinton was not the only Democratic accomplice in that horrendous surrender to the banking industry. Here is the Congressional final vote on the repeal:
That's right. 75% of House Democrats and 84% of Democratic Senators voted for this disaster. They voted to let the banks off the hook from any accountability or common sense rules of the road. They voted to legalize reverse bank robbery, not President Obama. These Democrats included luminaries and progressive 'heros' such as Sherrod Brown, Jerry Nadler, and even Ted Kennedy (House vote, Senate vote). I am not trying to blame the Democratic party for this - this deregulation has been the long standing project of the Republican party. Can these Democrats be forgiven for a bad vote? Yes. Especially when they also voted for Dodd Frank to re-regulate Wall Street.
But that's not the point. The point is that the mess was created for Barack Obama - he was not part of it. And those who are now shamelessly peddling lies about the president's stand on financial accountability have supported the same policymakers who opened the legal door for the worst financial calamity since the Great Depression. The reason Barack Obama can't perpwalk a bunch of banking executives is because Congress made what they did legal. And you cannot prosecute someone for doing something legal, even if it's real bad. And before someone goes and shoots off their mouth about fraud again, please look up the federal statutes on what fraud is and what it takes to prove fraud in a criminal case. And speaking of fraud, the Obama Administration is now suing a dozen banks for billions over misrepresentated mortgages.
So what the president focused on is not dead end criminal prosecutions but on actually strengthening the laws so that this doesn't happen again. The President signed into the first-of-its kind Credit Card Holders' Bill of Rights. He worked tirelessly to enact financial regulatory reform over the withering attacks of the financial powers and the Republicans in Congress. He signed legislation to help community banks and hold big banks accountable.
You might wish that a bunch of bank CEO's were rotting in jail. I certainly do. But we cannot wish laws into existence, nor can we travel back in time and undo the legal damage previous Congresses and presidents did by the power of sheer will. What is fair and what is legal are different questions. But if we are talking about a question of fairness, isn't some fairness due to President Obama, who seems to be about the only person who was not involved in causing the disaster but is now charged with fixing everything in the face of an unprecedentedly broken legislative process? Why is it fair for people claiming the Left corner of American politics to be dumping on the president because previous Congresses and presidents tied his hands by law? Why is it fair for chest-thumping poutragists to call the president a corporatist when he is about the only person that is trying to bring some fairness and rules of the road back to our system? Why is it fair to both rail against deregulation and yet pretend that deregulation had no legal impact when it comes to how or whether bank executives can be prosecuted for outrageous (but mostly legal) financial practices?
It's not fair. And that is a question Democrats and liberals need to ask ourselves. Many Republican candidates want to run on the theme of being a "consistent conservative." If there has been one consistent progressive - or even a consistent adult - in Washington DC over the past two and a half years, it is President Obama. Liberals must ask ourselves whether we are well served by professional hacks who make their living the same way conservative professional hacks: by ginning up outrage, pissing you off, and railing against adulthood in government, or particularly, against President Obama. I don't think we are well served by an environment that values conflict over facts, and petulance over progress.
I take no particular pleasure in saying that the president is the only adult. I adore Barack Obama, but it is a sad statement on the affairs of American politics that between a wholesale surrender of America to the multinationals and the ultra rich stands just one man. One brilliant man, but one man nonetheless. Let's give him some help - both on the American Jobs Act and on the 2012 elections, shall we?