A Look Back-- The Fight Over The Bankruptcy Bill

Friday, in a little-noticed post about Donna Edwards being named to head the DCCC's Red-to-Blue program, we glanced at the success Wall Street had in burdening American families with an unfair and grotesque new bankruptcy law. Needless to say, every single Republican voted for this monstrous concoction of the predatory banking lobbyists. Most of the Blue Dogs and conservative Democratic fellow travelers who betrayed the Democratic base-- like the slimy character (now a K Street lobbyist) Edwards replaced, Al Wynn-- were subsequently defeated. Two glaring exception-- both now high up in Democratic House leadership are two extraordinarily corrupt conservatives masquerading as Democrats, DCCC Chairman Steve Israel and his wretched boss, Steny Hoyer.

I'm about a third of the way through Elizabeth Warren's magnificent new book, A Fighting Chance and most of it has dealt with this epic battle. She was one of the leaders of the multi-year fight against that particular Wall Street assault against American working families. Her unique perspective fills in a lot of the blanks that went on behind the scenes in an effort that involves Ted Kennedy, Paul Wellstone and Hillary Clinton as heroes ultimately thwarted by the worst elements of American plutocracy.

Elizabeth Warren understands Wall Street-- and is one of the few Members of Congress willing to stand up to them. You talk about Hope and Change? Obama wrecked that phrase. Elizabeth Warren could revitalize it. During one of the academic studies she began in the late 1990s, she found that the astronomically growing number of families in financial collapse had several "unexpected" characteristics:

• More children would live thrpugh their parents' bankruptcy than their parents' divorce.
• More women would file for bankruptcy than would graduate from college.
• More people would file for bankruptcy than would be diagnosed with cancer.

Warren, a Harvard professor at the time, never stopped fighting, but neither did the banksters. Their financial self-interest wasn't dependent on fleeting partisan coalitions, elections, not even on deaths. They never give up, just like the GOP never gives up trying to destroy Social Security, Medicare, public education, the right for working people to organize and bargain collectively, the environment, and, ultimately, democracy itself-- all on behalf of the self-entitled multimillionaires and billionaires who claim their wealth gives them the right to run the country, in a kind of symbiotic partnership with the corrupt politicians they buy (on both sides of the aisle).

The banking industry bought everything; they even bought their own facts. The industry commissioned three different studies, each of which was touted as "independent." Each explained the urgent need to change the law-- exactly the way the banking industry wanted it changed. One particularly damaging result of these bogus studies was a claim that bankruptcy cost every hardworking, bill-paying American family a $550 "hidden tax." The number was entirely made up, fabricated out of thin air, but the press reported it as "fact" for years.

This one hit me hard. I'd spent nearly twenty years sweating over every detail in a string of serious academic studies, agonizing over sample sizes and statistical significance to make certain that whatever I reported was exactly right. Now the banks just wrote a check, commissioned a friendly study, and purchased their own facts. They had their own press people distribute the facts and lobbyists hand the facts to congressional staffers. From the halls of Congress to the front pages of newspapers all over the country, these new "facts" became reality.

This strategy-- and the cynicism behind it-- made me furious. It also scared me. If the facts about bankruptcy could be purchased, then who knew what they could claim next?

...[T]he president was under enormous pressure from the banks to sign the bill, but in the last days of his presidency, urged on by his wife, President Clinton stood strong with struggling families. WIth no public fanfare, he vetoed the industry's bill.

...The banks lost in 2000, but they didn't quit-- they just spent more money on lobbying and campaign contributions. Soon the banking industry was outspending everybody else-- tobacco, pharmaceuticals, even Big Oil. Credit card companies lined up to boost George W. Bush's presidential campaign.

In 2001, the bill looked sure to pass Congress again, and now George W. Bush was in the White House, promising to sign it into law. The recent election kept the House in Republican control, and every single Republican was ready to support the bill. The Senate was evenly split between the two parties, but one of the bill's lead sponsors was Democratic powerhouse Joe Biden, and right behind him were plenty of Democrats offering to help... The baking industry had lost for a second time, but it came back once again, bringing even more money and more lobbyists. It was like fighting some kind of mythical creature-- cut off one head and two grow back.

Two of the Democratic politicians who benefitted most from the influx of torrents of Dark bank and lobbyist money were Steve Israel and Steny Hoyer, two of the Democrats who worked undermining the official Democratic position and who helped the Republicans pass the bill that Bush ultimately signed. The legalistic bribes the two of them took from Wall Street bought them the fealty of weak Democratic hacks in Congress who helped he two of them rise in the power structure so they could do Wall Street's bidding within the Democratic caucus. It's why, for example, this blog sometimes seems obsessed with Steve Israel and why we write about him more than any other blog or news source anywhere in the country.

Why Settle?