Brad Miller Redux-- Here's What Happened

Over the weekend Blue America endorsed Brad Miller (D-NC), the first incumbent House member we've recommended for reelection in this cycle. Miller, who was in Raleigh for an OccupyRaleigh planning session, spent close to two hours blogging with us at Crooks and Liars. I think it's worth reiterating some of the points he made during the session, for those who couldn't attend.

Brad was been in Congress since 2002, representing a state where Democrats are, as often as not, nearly as reactionary as Republicans. Heath Shuler, Mike McIntyre, Larry Kissell, for example, vote with the Republicans on key issues as a matter of course. Even David Price, considered more a moderate than a reactionary, voted with the Republicans against ordinary working families on the bankruptcy bill. Miller, on the other hand, isn't just a dependable vote for working families against predatory banksters, he's been a leader and an innovator. The bill he introduced in the House last week, the Freedom and Mobility in Banking Act, is a good example-- and the first question tackled Saturday at C&L.

I’d been working on that bill for well more than a year with consumer groups, so it wasn’t just a response to Bank of America’s announcement that they would begin charging their customers $60 a year for using their debit card.

In working on consumer financial protection issues, I’ve been struck by what the big banks have been able to get away with and not lose their customers. Other businesses have to worry that if they don’t provide their customers the service the customers want, or charge too much, their customers will take their business down the street. It’s called “competition,” and it’s kind of a big idea in economic theory. But competition appears not to be working in consumer banking.

There are really two reasons for that. One is that it’s just about impossible to tell what services banks are really offering and what the price really is. Banks explain their fees in dense, indecipherable legalese written by their lawyers. The second is that it’s a nuisance to change banks. So a lot of consumers will put up with a lot from their bank because it’s just too much trouble to change, especially when it’s hard to know if a new bank will be any better.

The first problem should be the work of the new Consumer Financial Protection Bureau. The CFPB needs to require standardized, clear disclosures of bank fees so consumers can easily compare banks and credit unions and pick the one best for them.

My bill gets at the second problem, the difficulty in moving accounts. The banks have consultants who advise them on how to make banking “sticky” so their customers won’t leave them, so the difficulty in moving accounts is intentional and unnecessary.

The bill requires banks to close an account promptly without charge whether the consumer asks in person, by telephone or online. The old bank needs to transfer remaining funds to a new bank electronically, and smooth the transition by forwarding to the new bank any automatic deposits and let the customer know of any automatic deductions. You shouldn’t have to worry about missing a mortgage payment if you change banks, or that your employer might deposit your pay in your old bank.

The worst abuses are of economically struggling bank customers, however. They are most likely to get hit with overdraft fees and the like and have negative balances. The bill requires banks to close accounts on a customer’s request even if the account has a negative balance. The customer isn’t off the hook for what he or she owes the bank, but the bank can’t hold the account open and keep popping the customer for fees. The bank has to turn the meter off.

Banks blacklist customers with negative balances. If a bank reports to ChexSystems that a customer “abused” their checking account by not paying a negative balance, few banks will open an account for that customer and most will close the customer’s account. That makes it effectively impossible for a customer to contest any fees the bank has charged. The bill forbids banks from reporting to ChexSystems that a customer has a negative balance if fees are the only reason the customer’s balance is negative.

If we can make it possible for customers to compare bank services and fees and easily move from one bank to another, competition between banks will do more to protect consumers than adopting a new regulation every time some bank comes up with a new fee.

BofA is hardly the only bank announcing new fees, but their new debit card fee really helped attract a lot of early attention to the bill. I gave several interviews about it, but probably the best because it was longer and conversational was this one on NPR’s “The Takeaway."

Follow-up questions on the economic disaster years and years of conservative policies and the Republican Party agenda have left us with elicited responses like these:

[T]he Obama Administration faced a choice between helping homeowners who could afford a mortgage on their home, but not the one they had, and helping the biggest banks pretend to be solvent until they could earn their way back in the game. The two were incompatible: an effective response to the foreclosure crisis would require the banks to recognize losses on their mortgage assets, especially second liens at the biggest banks.

I think we took the wrong road, and that has made all the difference.

And when asked about Obama's strange statement last week that there were no laws broken and no crimes committed by the banksters, Brad didn't hesitate to politely disagree with the President:

The allegations in civil lawsuits by private mortgage investors and insurance companies, if true, appears pretty clearly to be of criminal conduct. I've struggled with the issue of politics and criminal prosecutions. I think calls for "perp walks" can sound like an appeal to mob rule, but not prosecuting powerful people in the face of clear evidence of criminal conduct is a real problem for democracy. I think some may have discouraged prosecutions because they feared for our fragile banking system, but I fear for our fragile democracy if people believe that the powerful are immune. I think the lack of criminal prosecutions or even aggressive civil lawsuits has offended the sense of justice of many Americans, including me. [emphasis is from DWT]

Needless to say, Congressman Miller may get frustrated with the Democratic Party Establishment from time to time and with wankers among his colleagues who sell out to lobbyists and Big Business, but he's far from ready to give up on the party. In fact someone asked him about that, and his response is worth repeating.

I'm reading Arthur Schlesinger's book The Crisis of the Old Order, which is really about the twenties and the Great Depression. There were plenty of progressives that despaired then, and saw no difference between the two parties. Paul Douglas, who was then an economist at the University of Chicago and later a revered progressive Democratic United States Senator, gave up on the Democratic Party and called it a "lifeboat" for business interests in case they needed to abandon the Republican Party from time to time. And there were those who urged even in 1932 that the Democratic Party needed to compete with Republicans for corporate support, rather than take on corporate interests on behalf of working Americans.

The Democratic Party remains the best vehicle for change, but we always have to struggle to make it so.

This week former Clinton Labor Secretary-- and liberal lion-- Robert Reich seemed less sanguine about the ability of the Democratic Party to embrace the message of the movement. "Will the Wall Street Occupiers morph into a movement that has as much impact on the Democratic Party as the Tea Party has had on the GOP? Maybe," he opined. "But there are reasons for doubting it."

So far the Wall Street Occupiers have helped the Democratic Party. Their inchoate demand that the rich pay their fair share is tailor-made for the Democrats’ new plan for a 5.6 percent tax on millionaires, as well as the President’s push to end the Bush tax cut for people with incomes over $250,000 and to limit deductions at the top.

And the Occupiers give the President a potential campaign theme. “These days, a lot of folks who are doing the right thing aren’t rewarded and a lot of folks who aren’t doing the right thing are rewarded,” he said at his news conference this week, predicting that the frustration fueling the Occupiers will “express itself politically in 2012 and beyond until people feel like once again we’re getting back to some old-fashioned American values.”

But if Occupy Wall Street coalesces into something like a real movement, the Democratic Party may have more difficulty digesting it than the GOP has had with the Tea Party.

After all, a big share of both parties’ campaign funds comes from the Street and corporate board rooms. The Street and corporate America also have hordes of public-relations flacks and armies of lobbyists to do their bidding-- not to mention the unfathomably deep pockets of the Koch Brothers and Dick Armey’s and Karl Rove’s SuperPACs. Even if the Occupiers have access to some union money, it’s hardly a match.

...Barack Obama is many things but he is as far from left-wing populism as any Democratic president in modern history. True, he once had the temerity to berate “fat cats” on Wall Street, but that remark was the exception-- and subsequently caused him endless problems on the Street.

To the contrary, Obama has been extraordinarily solicitous of Wall Street and big business-- making Timothy Geithner Treasury Secretary and de facto ambassador from the Street; seeing to it that Bush’s Fed appointee, Ben Bernanke, got another term; and appointing GE Chair Jeffrey Immelt to head his jobs council.

Most tellingly, it was President Obama’s unwillingness to place conditions on the bailout of Wall Street – not demanding, for example, that the banks reorganize the mortgages of distressed homeowners, and that they accept the resurrection of the Glass-Steagall Act, as conditions for getting hundreds of billions of taxpayer dollars-- that contributed to the new populist insurrection.

The Wall Street bailout fueled the Tea Party (at the Utah Republican convention that ousted incumbent Republican Senator Robert Bennett in 2010, the mob repeatedly shouted “TARP! TARP! TARP!”), and it surely fuels some of the current fulminations of Occupy Wall Street.

This is not to say that the Occupiers can have no impact on the Democrats. Nothing good happens in Washington – regardless of how good our president or representatives may be-- unless good people join together outside Washington to make it happen. Pressure from the left is critically important.

Since then-- much to the chagrin of Peter King and other GOP reactionaries-- the NY Times has endorsed the OccupyWallStreet movement... finally bringing the drum circle into the mainstream.

As the Occupy Wall Street protests spread from Lower Manhattan to Washington and other cities, the chattering classes keep complaining that the marchers lack a clear message and specific policy prescriptions. The message-- and the solutions-- should be obvious to anyone who has been paying attention since the economy went into a recession that continues to sock the middle class while the rich have recovered and prospered. The problem is that no one in Washington has been listening.

At this point, protest is the message: income inequality is grinding down that middle class, increasing the ranks of the poor, and threatening to create a permanent underclass of able, willing but jobless people. On one level, the protesters, most of them young, are giving voice to a generation of lost opportunity.

The jobless rate for college graduates under age 25 has averaged 9.6 percent over the past year; for young high school graduates, the average is 21.6 percent. Those figures do not reflect graduates who are working but in low-paying jobs that do not even require diplomas. Such poor prospects in the early years of a career portend a lifetime of diminished prospects and lower earnings-- the very definition of downward mobility.

The protests, though, are more than a youth uprising. The protesters’ own problems are only one illustration of the ways in which the economy is not working for most Americans. They are exactly right when they say that the financial sector, with regulators and elected officials in collusion, inflated and profited from a credit bubble that burst, costing millions of Americans their jobs, incomes, savings and home equity. As the bad times have endured, Americans have also lost their belief in redress and recovery.

The initial outrage has been compounded by bailouts and by elected officials’ hunger for campaign cash from Wall Street, a toxic combination that has reaffirmed the economic and political power of banks and bankers, while ordinary Americans suffer.

Extreme inequality is the hallmark of a dysfunctional economy, dominated by a financial sector that is driven as much by speculation, gouging and government backing as by productive investment.

When the protesters say they represent 99 percent of Americans, they are referring to the concentration of income in today’s deeply unequal society. Before the recession, the share of income held by those in the top 1 percent of households was 23.5 percent, the highest since 1928 and more than double the 10 percent level of the late 1970s.

...No wonder then that Occupy Wall Street has become a magnet for discontent. There are plenty of policy goals to address the grievances of the protesters — including lasting foreclosure relief, a financial transactions tax, greater legal protection for workers’ rights, and more progressive taxation. The country needs a shift in the emphasis of public policy from protecting the banks to fostering full employment, including public spending for job creation and development of a strong, long-term strategy to increase domestic manufacturing.

It is not the job of the protesters to draft legislation. That’s the job of the nation’s leaders, and if they had been doing it all along there might not be a need for these marches and rallies. Because they have not, the public airing of grievances is a legitimate and important end in itself. It is also the first line of defense against a return to the Wall Street ways that plunged the nation into an economic crisis from which it has yet to emerge.

Again... the inside/outside strategy we've been talking about. Which, of course, is why it's so crucial to have dependable allies like Brad Miller on the inside. If you'd like to help guarantee that, you can contribute to Brad's campaign here.