Clintonism: Re-Defining Progressivism, Populism And The Democratic Party-- And Not In A Good Way

Congressman Wright Patman (D-TX), chairman of the House Banking Committee, 1963-74, led the fight in Congress to stop the manipulators of the Federal Reserve System from 1937 to his death in 1976

It flipped me out earlier in the cycle when Obama sent out numerous communications-- including radio ads-- to Democratic base voters in Florida, particularly African-Americans, that reactionary New Dem Patrick Murphy is a progressive. The only relationship that Patrick Murphy has with progressives is that he opposes their agenda and that he was running against one, Alan Grayson. But, then again, maybe it's just about how you define "progressive." After all, Murphy doesn't mind if women get abortions or gays want to get married or even if lots of undocumented immigrants come over the border. If that's how you define progressive... ok, Murphy's a progressive. A look at his voting record, on the other hand, paints a picture of Wall Street's most devoted Democratic puppet in Congress, something borne out by Wall Street campaign contributions this cycle. Murphy has gotten more loot ($2,013,462) from the Finance Sector than any other non-incumbent running for the Senate-- more than any Republican and more than many incumbents. The banksters have given more to Murphy than to embattled allies like Ron Johnson (R-WI), John McCain (R-AZ), Mark Kirk (R-IL), Richard Burr (R-NC), Joe Heck (R-NV), Roy Blunt (R-MO), men who have served them faithfully for years or even decades and are now facing defeat. But getting Murphy into the Senate is a Wall Street priority, even if they love Marco Rubio and were a significant part of his aborted presidential campaign.

In fact, more than any other Democrat running for the Senate, Murphy is seen as the not-Elizabeth Warren candidate. He's the one who has worked in the House Financial Services Committee to help the Republicans with their efforts to undo all the consumer protections Warren was able to incorporate into Dodd-Frank. But if decades old battles for gay rights and women's equality is the ultimate definition of "progressive," maybe Obama wasn't as much of a liar as he sounded and maybe I was too hasty to point out that Murphy's parents' and Saudi allies' promises to help fund his presidential library-- surely a progressive place in the making, no?-- weren't really the motivation for the lie.

Notorious bankster errand boys Chuck Schumer and Patrick Murphy

Anyway, yesterday Matt Stoller, a Bernie Sanders Senate staffer, published the article of the day, How Democrats Killed Their Populist Soul and the period he wrote about, the mid to late 1970s-- was actually just before Patrick Murphy was born. The liberal reformers who came in on the coattails of Americans' disgust with Nixonian sleaze, didn't understand that banksterism was the enemy either. And they screwed things up in a way to make it possible for Wall Street toadies like Patrick Murphy, Ann Kirkpatrick (D-AZ) and Evan Bayh (D-IN) to thrive within the Democratic Party today.

It's entirely consistent with Stoller's nature to launch right into a defense of an old racist, pro-war congressman who few people outside of obsessed political junkies have ever heard of. "One of their first targets," he wrote, "was an old man from Texarkana: a former cotton tenant farmer named Wright Patman who had served in Congress since 1929. He was also the chairman of the U.S. House Committee on Banking and Currency and had been for more than a decade. Antiwar liberal reformers realized that the key to power in Congress was through the committee system; being the chairman of a powerful committee meant having control over the flow of legislation. The problem was: Chairmen were selected based on their length of service. So liberal reformers already in office, buttressed by the Watergate Babies’ votes, demanded that the committee chairmen be picked by a full Democratic-caucus vote instead. Ironically, as chairman of the Banking Committee, Patman had been the first Democrat to investigate the Watergate scandal. But he was vulnerable to the new crowd he had helped usher in. He was old; they were young. He had supported segregation and the war in Vietnam; they were vehemently against both. Patman had never gone to college and had been a crusading economic populist during the Great Depression; the Watergate Babies were weaned on campus politics, television, and affluence."

In reality, while the Watergate Babies provided the numbers needed to eject him, it was actually Patman’s Banking Committee colleagues who orchestrated his ouster. For more than a decade, Patman had represented a Democratic political tradition stretching back to Thomas Jefferson, an alliance of the agrarian South and the West against Northeastern capital. For decades, Patman had sought to hold financial power in check, investigating corporate monopolies, high interest rates, the Federal Reserve, and big banks. And the banking allies on the committee had had enough of Patman’s hostility to Wall Street.

Over the years, Patman had upset these members by blocking bank mergers and going after financial power. As famed muckraking columnist Drew Pearson put it: Patman “committed one cardinal sin as chairman. ... He wants to investigate the big bankers.” And so, it was the older bank allies who truly ensured that Patman would go down. In 1975, these bank-friendly Democrats spread the rumor that Patman was an autocratic chairman biased against junior congressmen. To new members eager to participate in policymaking, this was a searing indictment.

...Not all on the left were swayed. Barbara Jordan, the renowned representative from Texas, spoke eloquently in Patman’s defense. Ralph Nader raged at the betrayal of a warrior against corporate power. And California’s Henry Waxman, one of the few populist Watergate Babies, broke with his class, puzzled by all the liberals who opposed Patman’s chairmanship. Still, Patman was crushed. Of the three chairmen who fell, Patman lost by the biggest margin. A week later, the bank-friendly members of the committee completed their takeover. Leonor Sullivan-- a Missouri populist, the only woman on the Banking Committee, and the author of the Fair Credit Reporting Act-- was removed from her position as the subcommittee chair in revenge for her support of Patman. “A revolution has occurred,” noted the Washington Post.

Indeed, a revolution had occurred. But the contours of that revolution would not be clear for decades. In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government-- through Vietnam, Nixon, and executive power-- that organized the political spectrum. By 1975, liberalism meant, as [Michigan's Bob] Carr put it, “where you were on issues like civil rights and the war in Vietnam.” With the exception of a few new members, like [George] Miller and Waxman, suspicion of finance as a part of liberalism had vanished.

Over the next 40 years, this Democratic generation fundamentally altered American politics. They restructured “campaign finance, party nominations, government transparency, and congressional organization.” They took on domestic violence, homophobia, discrimination against the disabled, and sexual harassment. They jettisoned many racially and culturally authoritarian traditions. They produced Bill Clinton’s presidency directly, and in many ways, they shaped President Barack Obama’s.

The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. This is not what the Watergate Babies intended when they dethroned Patman as chairman of the Banking Committee. But it helped lead them down that path. The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump.

In March, we spent some time talking about Thomas Frank's new book, Listen Liberal-- Or What Ever Happened To The Party Of The People. Stoller's analysis is very much in synch with the one offered by Frank, namely that the Democratic Party no longer prioritizes the interests of working families but instead super-serves the interests of the top 10%, a professional class for whom Wall Street is not as mortal an enemy as has proven itself to be to the working class.

Stoller lionizes the contributions of Supreme Court Justice Louis Brandeis who, he wrote, essentially formaled "the populist social sentiment of the late 19th century into a rigorous set of legally actionable ideas. This philosophy then guided the 20th-century Democratic Party."

Brandeis’s basic contention, built up over a lifetime of lawyering from the Gilded Age onward, was that big business and democracy were rivals. “We may have democracy, or we may have wealth concentrated in the hands of a few,” he said, “but we can’t have both.” Economics, identity, and politics could not be divorced, because financial power-- bankers and monopolists-- threatened local communities and self-government.

This use of legal tools to constrain big business and protect democracy is known as anti-monopoly or pro-competition policy. This tension stretched back to colonial times and the nation’s founding. The British East India Company was a chartered corporation organized to monopolize the tea business for its corporate owners and the Crown-- which spurred the Boston Tea Party. Alexander Hamilton’s financial architecture concentrated power and wealth-- which prompted the founding of the Democratic Party along more Jeffersonian lines, promoting private small-land ownership. J.P. Morgan’s and John D. Rockefeller’s encroaching industrial monopolies were part of the Gilded Age elite that extorted farmers with sky-high interest rates, crushed workers seeking decent working conditions and good pay, and threatened small-business independence-- which sparked a populist uprising of farmers, and, in parallel, sparked protest from miners and workers confronting newfound industrial behemoths.

In the 20th century, Woodrow Wilson authored the Federal Trade Commission Act, the Federal Reserve Act, and the anti-merger Clayton Act, and, just before World War I intervened, he put Brandeis on the Supreme Court. Franklin Delano Roosevelt completed what Wilson could not, restructuring the banking system and launching antitrust investigations into “housing, construction, tire, newsprint, steel, potash, sulphur, retail, fertilizer, tobacco, shoe, and various agricultural industries.” Modern liberals tend to confuse a broad social-welfare state and redistribution of resources in the form of tax-and-spend policies with the New Deal. In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy. The New Deal divided power, pitting faction against other faction, a classic Jefferson-Madison approach to controlling power (think Federalist Paper No. 10). Competition policy meant preserving democracy within the commercial sphere, by keeping markets open. Again, for New Deal populists like Brandeis and Patman, it was democracy or concentrated wealth-- but not both.

...Underpinning the political transformation of the New Deal was an intellectual revolution, a new understanding of property rights. In a 1932 campaign speech known as the Commonwealth Club Address, FDR defined private property as the savings of a family, a Jeffersonian yeoman-farmer notion updated for the 20th century. By contrast, the corporation was not property. Concentrated private economic power was “a public trust,” with public obligations, and the continued “enjoyment of that power by any individual or group must depend upon the fulfillment of that trust.” The titans of the day were not businessmen but “princes of property,” and they had to accept responsibility for their power or be restrained by democratic forces. The corporation had to be fit into the constitutional order.

Remember, it was the great bankers and managers of the “money trusts,” such as J.P. Morgan, who sat astride wide swaths of corporate America through their investment and lending power, membership on boards of directors, and influence over industrial titans. Among other things, they maintained a sufficient concentration of power to keep prices up, workers disorganized, and politics firmly within their grasp.

New Deal fears of bigness and private concentrations of power were given further ideological ammunition later in the 1930s by fascists abroad. As Roosevelt put it to Congress when announcing a far-reaching assault on monopolies in 1938: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.” In 1947, Patman even commissioned experts to publish a book titled Fascism in Action, noting that fascism as a political system was the combination of extreme nationalism and monopoly power, a “dictatorship of big business.”

This basic understanding of property formed the industrial structure of mid-20th-century America and then, through its trading arrangements, much of the rest of the world. Using this framework, the Democrats broke the power of bankers over America’s great industrial commons. To constrain big business and protect democracy, Democrats used a raft of anti-monopoly, or pro-competition, policy to great effect, leading to vast changes: The Securities and Exchange Commission was created, the stock exchanges were regulated, the big banks were broken up, the giant utility holding companies were broken up, farmers gained government support for stable agricultural prices free from speculation, and the chain stores were restrained by laws that blocked them from using predatory pricing to undermine local competition (including, for instance, competition from a local camera store in San Francisco run by a shopkeeper named Harvey Milk).

Competition policy was also a powerful political strategy. Democrats lost the U.S. House of Representatives just twice between 1930 and 1994. To get a sense of how rural Democrats used to relate to voters, one need only pick up an old flyer from the Patman archives in Texas: “Here Is What Our Democratic Party Has Given Us” was the title. There were no fancy slogans or focus-grouped logos. Each item listed is a solid thing that was relevant to the lives of conservative white Southern voters in rural Texas: Electricity. Telephone. Roads. Social Security. Soil conservation. Price supports. Foreclosure prevention.

Foreclosures protected homes against bankers. Farm-to-market roads allowed communities to organize around markets. Social Security protected one’s livelihood in the form of unemployment insurance and old-age benefits. Price supports for family farms protected them from speculators. And rural electrification and telephones shielded communities from the predations of monopolistic utilities. Packaged together, these measures epitomized the idea that citizens must be able to govern themselves through their own community structures, or as Walt Whitman put it: “train communities through all their grades, beginning with individuals and ending there again, to rule themselves.” Patman’s ideals represented a deep understanding that sovereign citizens governing sovereign communities were the only protection against demagoguery.

The essence of populist politics is that political and economic freedom are deeply intertwined-- that real democracy requires not just an opportunity to vote but an opportunity to compete in an open marketplace. This was the kind of politics that the Watergate Babies accidentally overthrew.

The story of why the Watergate Babies spurned populism is its own intellectual journey. It started with a generation of politicians who cut their teeth on college-campus politics. In their youth, they saw, up close, not the perils of robber barons, but the failure of the New Deal state, most profoundly through the war in Vietnam. “We were the ’60s generation that didn’t drop out,” Bob Edgar, a U.S. representative from the class of 1975, told me. The war in Vietnam shaped their generation in two profound ways. First, it disillusioned them toward the New Deal. It was, after all, many New Dealers, including union insiders, who nominated Hubert Humphrey in 1968 and who supported a war that killed millions, including 50,000 Americans their age. And second, higher education-- the province of the affluent-- exempted one from military service, which was an explicit distinction among classes.

...For younger Democrats, the key vector for these ideas was an economist named Lester Thurow, who organized the ideas of Galbraith, Stigler, Friedman, Bork, and Jensen into one progressive-sounding package. In an influential book, The Zero-Sum Society, Thurow proposed that all government and business activities were simply zero-sum contests over resources and incomes, ignoring the arguments of New Dealers that concentration was a political problem and led to tyranny. In his analysis, anti-monopoly policy, especially in the face of corporate problems was anachronistic and harmful. Thurow essentially reframed Bork’s ideas for a Democratic audience.

With key intellectuals in the Democratic Party increasingly agreeing with Republican thought leaders on the virtues of corporate concentration, the political economic debate changed drastically. Henceforth, the economic leadership of the two parties would increasingly argue not over whether concentrations of wealth were threats to democracy or to the economy, but over whether concentrations of wealth would be centrally directed through the public sector or managed through the private sector—a big-government redistributionist party versus a small-government libertarian party. Democrats and Republicans disagreed on the purpose of concentrated power, but everyone agreed on its inevitability. By the late 1970s, the populist Brandeisian anti-monopoly tradition-- protecting communities by breaking up concentrations of power-- had been air-brushed out of the debate. And in doing so, America’s fundamental political vision transformed: from protecting citizen sovereignty to maximizing consumer welfare.

The Watergate Babies began to coalesce around their own sense of this new intellectual economic philosophy to deal with the stagnating economy around them. In an early sign of where it would lead, President Jimmy Carter deregulated the trucking, banking, and airline industries, with help from economist Alfred Kahn, Senator Edward Kennedy, and Kennedy’s young aide, future Supreme Court Justice Stephen Breyer. Democrats then popularized supply-side economics in a Thurow-influenced and Democrat-authored 1980 Joint Economic Committee report, “Plugging in the Supply Side.”

In 1982, journalist Randall Rothenberg noted the emergence of this new statist viewpoint of economic power within the Democratic Party with an Esquire cover story, “The Neoliberal Club.” In that article, which later became a book, Rothenberg profiled up-and-coming Thurow disciples like Gary Hart, Bill Bradley, Bill Clinton, Bruce Babbitt, Richard Gephardt, Michael Dukakis, Al Gore, Paul Tsongas, and Tim Wirth, as well as thinkers like Robert Reich and writers like Michael Kinsley. These were all essentially representatives of the Watergate Baby generation. It was a prescient article: Most Democratic presidential candidates for the next 25 years came from this pool of leaders. Not all Watergate Babies became neoliberals, of course. There were populists of the generation, like Waxman and Miller, but they operated in an intellectual environment where the libertarian and statist thinkers who rejected Brandeis shaped the political economy.

Democrats and Republicans still fought. Neoliberals, while agreeing with Reagan Republicans on a basic view that the structure of corporate America should be as depoliticized and as shielded from voters as possible, still vehemently opposed Ronald Reagan on environmental policy, foreign policy, and taxes. But the very idea of competition policy, of inserting democracy into the economy, made no sense to them. Previously, voters had expected politicians to do something about everything from the price of milk to mortgage rates. Now, neoliberals expressed public power through financial markets. As libertarian and future Fed Chairman Alan Greenspan had written a decade before, “The ultimate regulator of competition in a free economy is the capital market.”

...When Bill Clinton took office as the 42nd president, the Watergate Babies would finally have their chance to govern... Clinton Democrats eventually came to reflect Dutton’s political formulation, more diverse and less reliant on the white working class. His administration looked like America-- with women, African Americans, Latinos, and gays and lesbians represented-- and most were educated at top universities. Thurow’s influence was also notable. Clinton stripped antitrust out of the Democratic platform; it was the first time a reference to monopoly power was not in the platform since 1880. Globalization, deregulation, and balanced budgets would animate Clinton’s political economy, with high-tech and finance leading the way.

And it seemed to work. From 1993 to 2001, GDP growth averaged 4 percent, up from 2.8 percent from 1981 to 1993. The median family income increased by $6,000, with the lowest inflation rate since the 1960s. Plus, 22 million jobs were created, 7 million people came out of poverty, America saw the highest homeownership rate ever, the national debt nearly disappeared, and interest rates came down. African Americans experienced pay increases for the first time since the 1960s. Goldman Sachs called it the “best economy ever,” and BusinessWeek lauded a “New Age economy of technological innovation and rising productivity.” The administration put this additional fat of the land toward third-world debt relief, student aid, empowerment zones, and community block grants. (When George W. Bush came into office after Clinton, The Onion’s headline read, “Bush: ‘Our Long National Nightmare of Peace and Prosperity is Over.’”)

At the end of his presidency, Clinton explained his success. He praised Greenspan’s stewardship of the Federal Reserve. He said that the key to noninflationary growth was ensuring that workers did not demand raises beyond the rate of productivity, while unleashing businesses to pursue the most profitable lines of investment through deregulation and globalization. He implicitly touted the theory of capital shortage: Inflation resulted from overregulation and deficits, which took money out of the hands of businesses. Putting money and power back into the hands of businesses with deregulation and a balanced budget led to low interest rates, massive corporate profits, productivity growth, and broad prosperity. Bork and Thurow, in other words, were right.

Clinton’s policy framework diverged with that of his Republican predecessors in many ways, not just on social policy but also on raising marginal tax rates on the wealthy. In terms of concentrations of power in the private sector, however, it was more a completion of what Reagan did than a repudiation of it.

From telecommunications to media to oil to banking to trade, Clinton administration officials-- believing that technology and market forces alone would disrupt monopolies-- ended up massively concentrating power in the corporate sector. They did this through active policy, repealing Glass-Steagall, expanding trade through NAFTA, and welcoming China’s entrance into the global-trading order via the World Trade Organization. But corporate concentration also occurred in less-examined ways, like through the Supreme Court and defense procurement. Clinton Library papers, for example, reveal that the lone Senate objection to the Supreme Court nominations of both Stephen Breyer and Ruth Bader Ginsburg was from a lurking populist Ohio Democrat, Howard Metzenbaum, who opposed the future justices’ general agreement with Bork on competition policy. And in response to the end of the Cold War, the administration restructured the defense industry, shrinking the number of prime defense contractors from 107 to five. The new defense-industrial base, now concentrated in the hands of a few executives, stopped subsidizing key industries. The electronics industry was soon offshored.

But who could argue? The concentration of media and telecommunications companies happened concurrent with an investment boom into the newest beacon of progress: the internet. The futurism, the political coalition of the multiethnic cosmopolitans, the social justice of the private centrally planned corporation-- it worked. Clinton’s “Third Way” went global, as political leaders abroad copied the Clinton model of success. A West Wing generation learned only Watergate Baby politics, never realizing an earlier progressive economic tradition had even existed.

Despite this prosperity, in 2000, the American people didn’t reward the Democrats with majorities in Congress or an Oval Office victory. In particular, the rural parts of the country in the South, which had been a traditional area of Democratic strength up until the 1970s, were strongly opposed to this new Democratic Party. And white working-class people, whom Dutton had dismissed, did not perceive the benefits of the “greatest economy ever.” They also began to die. Starting in 1998 and continuing to this day, the mortality rate among white Americans, specifically those without a high school-degree, has been on the rise-- leaving them scared and alienated.

...By 2008, the ideas that took hold in the 1970s had been Democratic orthodoxy for two generations. “Left-wing” meant opposing war, supporting social tolerance, advocating environmentalism, and accepting corporatism and big finance while also seeking redistribution via taxes. The Obama administration has been ideologically consistent with the Watergate Babies’ rejection of populism. Modern liberal political culture epitomizes Dutton’s ideas. And its accomplishments are impressive. As late as 1995, a majority of Americans did not approve of interracial marriage. Today, gay marriage is the law of the land, and intermarriage rates are high and growing. Culturally, the United States is a far more tolerant and open society.

Dealing with a financial collapse in the early years of his administration, Obama’s political-economic framework supported concentrated yet regulated financial power. From 2009 to 2010, the administration prioritized the stability of a concentrated financial system over risking an attempt to end the foreclosure wave threatening the American housing market. In the last seven years, another massive merger boom has occurred, with concentrations accruing in the hospital, airline, telecommunications, and technology industries. Progressive corporations like Google are key pillars of a cosmopolitan liberal culture. This is the world of the Watergate Babies and the libertarian and statist thinkers who shaped their intellectual understanding of it.

But what intellectuals like Thurow, Galbraith, Greenspan, Bork, and so forth didn’t foresee was political disillusionment on a vast scale. In 2014, for example, voting rates in some states dropped to levels unseen since the 1820s (when property-franchise laws were in force). Meanwhile, American soldiers once again find themselves in a quagmire; this time, in the Middle East. Despite their best efforts, U.S. institutions seem as out-of-control and ungovernable as they did when the 1975 class came into office.

For most Americans, the institutions that touch their lives are unreachable. Americans get broadband through Comcast, their internet through Google, their seeds and chemicals through Monsanto. They sell their grain through Cargill and buy everything from books to lawnmowers through Amazon. Open markets are gone, replaced by a handful of corporate giants. Political groups associated with Koch Industries have a larger budget than either political party, and there is no faith in what was once the most democratically responsive part of government: Congress. Steeped in centralized power and mistrust, Americans must now confront Donald Trump, the loudest and most grotesque symbol of authoritarianism in politics today.

“This,” wrote Robert Kagan in the Washington Post, “is how fascism comes to America.” The nation is awash in commentary and fear over the current cultural moment. “America is a breeding ground for tyranny,” wrote Andrew Sullivan in New York magazine. Yet, Trump’s emergence would not be a surprise to someone like Patman, or to most New Dealers. They would note that the real-estate mogul’s authoritarianism is not new in American culture; it is ubiquitous. It is consistent with how the commercial sphere has developed since the 1970s. Americans feel a lack of control: They are at the mercy of distant forces, their livelihoods dependent on the arbitrary whims of power. Patman once attacked chain stores as un-American, saying, “We, the American people, want no part of monopolistic dictatorship in … American business.” Having yielded to monopolies in business, the nation must now face the un-American threat to democracy Patman warned they would sow.

Americans have forgotten about the centuries-old anti-monopoly tradition that was designed to promote self-governing communities and political independence. The Watergate Babies got rid of Patman’s populism for a lot of reasons. But there was wisdom there. In the 1930s, Patman said that restricting chain stores would prevent “Hitler’s methods of government and business in Europe” from coming to the United States. For decades after World War II, preventing economic concentration was understood as a bulwark against tyranny. But since the 1970s, this rhetoric has seemed ridiculous. Now, the destabilization of political institutions suggests that it may not have been. Financial crises are a regular feature of the U.S. banking system, and prices for essential goods and services reflect monopoly power rather than free citizens buying and selling to each other. Americans, sullen and unmoored from community structures, are turning to rage, apathy, protest, and tribalism, like white supremacy.

Ending the threat of authoritarianism is not a left-wing or right-wing problem, and the solution does not reside in building a bigger or a smaller government. Restoring political stability means structuring society’s public and corporate institutions so they can be governed by human beings and communities. It means protecting the property rights of citizens and not confusing property with arbitrary tollbooths erected by tech billionaires. And it means understanding that protecting competitive markets and preventing concentrations of power are essential components of democracy.

Fortunately, Americans are beginning to remember what was once lost. Senator Elizabeth Warren often sounds like she’s channeling Wright Patman. Senator Bernie Sanders stirred enormous enthusiasm in a younger generation more in touch with their populist souls. Republicans even debated putting antitrust back in their party platform. President Obama has begun talking about the problem of monopolies. Renata Hesse, the head of the government’s antitrust division, recently gave a blistering speech repudiating Bork’s corporatist ideas. And none other than Hillary Clinton, in an October 3, 2016, speech on renewing antitrust vigor, noted that Trump, while a unique figure, also represents the “broader trends” of big business picking on the little guy.

Restoring America’s anti-monopoly traditions does not mean rejecting what the Watergate Babies accomplished. It means merging their understanding of a multicultural democratic society with Brandeis’s vision of an “industrial democracy.” The United States must place democracy at the heart of its commercial sphere once again. That means competition policy, in force, all the time, at every level. The prevailing culture must be re-geared, so that the republic may be born anew.

Note:

When he was still Chairman of the House Banking Committee, Patman once famously asked the Chairman of the Federal Reserve, Arthur Burns, testifying in front of his committee, "Can you give me any reason why you should not be in the penitentiary?" A year after being deposed in a 152-117 caucus vote in 1975, Patman died of pneumonia and was replaced by an ultra-conservative Democrat, Sam Hall, who was later nominated for a judgeship by Reagan, making way for the district to turn red. It is now one of the most Republican districts in the country, Obama getting only 25% of the vote there in 2012; 24% of the population is black or Latino. When people talk about Hillary gaining on Trump in Texas, this isn't the part of Texas they're talking about. They're talking about well-off suburbs around San Antonio, Austin, Houston, Dallas and Forth Worth, traditionally Republican areas, not traditionally Democratic areas that have been left behind and have slipped into the Republican orbit. 

Mary Hoeft is the progressive Democrat running for the northwestern/central Wisconsin congressional seat (WI-07), currently held by Trumpist and former reality TV character Sean Duffy, who currently earns his campaign funds as chairman of a House Financial Services Sub-committee on Investigations and Oversight by pointedly not providing any oversight or doing any investigations of crooked (albeit generous-- at least to Rep. Duffy) banksters. Last night, after reading Stoller's article, Mary drew a sharp contrast between herself and crooked members of Congress from both parties who put Wall Street's interests above the interests of their own constituents.

I refuse to balance Patrick Murphy's advocacy on behalf of Wall Street with his advocacy on behalf of reproductive rights, gays, and undocumented workers. To do so would be naïve. Pope Francis spoke out against the naivete of those who believe good will come as droplets of water trickle down from the pool of riches our wealthiest bathe in. Americans are drowning in those droplets. My opponent Sean Duffy is an easier enemy to see coming. He advocates against reproductive rights, gays, and undocumented workers. But Murphy is equally responsible for the chasm that now divides our wealthiest from the rest of America.

Needless to say, Hoeft is one of the progressives who won her primary, only to be promptly ignored by the very conservative and very Wall Street-friendly DCCC. They're not helping her, even though her district is very swingy and was only recently held by a Democrat, Dave Obey (who is campaigning for her), and was won by Obama against McCain, 53-45%. Please consider contributing to her grassroots campaign by tapping the thermometer below:

And An Update For Capitol Hill:

Today one of the congressmembers who helped write Dodd-Frank sent me a note:

Dear Howie:

Even when we were writing the Dodd-Frank Act, in the wake of the financial meltdown, there was only mild attention to what might be done to prevent another meltdown, rather than any focus on the distribution of wealth and financial power. That latter subject is essentially verboten; instead, we scold the GOP about bathroom laws and personal indiscretions. On the contrary, Democratic candidates ritually and habitually deny any motivation to “penalize success,” especially when talking to wealthy donors.

Can Democrats Take Back The Sunbelt-- Starting In Texas?

A few days ago we looked at why South Carolina Congressman Mark Sanford has the political leeway to publicly denigrate Trump. For one thing, his coastal district is npt Trump territory. Rubio beat Trump in the primary there and Hillary won the largest county in the district (Charleston). Yesterday a poll of South Carolina voters showed that Trump's unpopularity nationally in mirrored in South Carolina. "Despite winning South Carolina by a double-digit margin in November's election, President Donald Trump is receiving the same lukewarm approval marks in the Palmetto State as the remainder of the country... A new Winthrop University poll released Thursday found that South Carolinians give Trump a 44 percent approval rating, nearly identical to his latest average of national polls compiled by Real Clear Politics.

One of the most widely discussed thought pieces in political circles this week has been Andrew Cockburn's controversial piece in Harper's, Texas Is The Future-- Can Democrats Reconquer The Lone Star State?. Remember, statewide the Texas Democratic Party has been all but moribund for decades. The last Democratic governor was elected in 1990. And Lloyd Bentsen, he last Democratic senator, was first elected in 1970 (and reelected in through the 80's).

Yesterday a higher up at the DCCC asked me if I thought a Democrat could win Ted Poe's seat (TX-02) in 2018. It's a very white, very gerrymandered suburban district north of Houston, although it includes Rice University and Montrose, the center of Houston's LGBT community. Overall, though, the district is probably the reddest part of Harris County. Harris County went narrowly for Obama in 2012, but TX-02 was landslide territory for Romney. He took the district 62.9% to 35.6%. In November, Hillary's margin over Trump countywide was not narrow. She wiped him out in Texas' biggest county-- 707,914 to 545,955. TX-02, though, isn't quite there yet. True, Trump's number's cratered in comparison to Romney's (Romney's 62.9% turned into a 52.4% win for Trump), but he still beat Hillary in the district by nearly 9 points. So, 2018 is unlikely to be the end of Poe. What I suggested is a clear 2-cycle strategy to build a candidate this cycle and take out Poe in 2020. That kind of thinking has been anathema to the DCCC since Rahm was chairman. I doubt if Ben Ray Lujan has the vision to see it through.

Meanwhile, though, there were 3 Republican-held congressional districts where Hillary did win in November-- TX-07 (John Culberson's Harry County seat), TX-23 (Will Hurd's heavily Hispanic south Texas district where the DCCC blew an easy win by nominating a wretched corrupt conservative), TX-32 (Pete Sessions' uber-gerrymandered district from Highland Park and University Park in north Dallas, up through Richardson and Garland. And there are 5 other districts trending towards the Democrats: TX-24 (Kenny Marchant's in the suburbs north of Dallas/Ft. Worth), TX-22 (Pete Olson's Sugar Land and Pearland district south of Houston), TX-21 (Lamar Smith's Austin/San Antonio corridor district), TX-10 (Mike McCaul's Austin/Houston corridor district) and TX-03 (Sam Johnson's district in the suburbs north of Dallas up through Plano and McKinney). Trump won Texas. A new poll out this week, shows him struggling with voters statewide:

Cockburn kicked off his article on election night in the Heights neighborhood of Houston. "Unlike the rest of the country," he wrote, "Houston Democrats had a full-scale Republican rout to celebrate. The party had swept the polls in Harris County, the vast region encompassing Houston, arguably the nation’s most diverse city (as locals never tire of repeating). With 4.5 million inhabitants, the county is more populous than half the states in America. Now Harris voters had elected a Democratic district attorney-- a very powerful post in Texas law enforcement-- for the first time in thirty-six years. The Democrats had also captured almost every other slot on the ballot, including the tax assessor’s office, which oversees voter registration: a crucial win in an age of Republican voter suppression... Clinton trounced Donald Trump by more than 160,000 votes in a county that Barack Obama had carried by fewer than a thousand in 2012. While others in the defeated party were subsiding into melancholy, hand-wringing, and consolatory tales of Russian hackers, the county’s newly elected sheriff, former Houston police sergeant Ed Gonzalez, was assuring supporters that he would defy any orders to round up undocumented immigrants. Across the street, the new D.A., Kim Ogg, promised her exuberant audience a progressive agenda: 'We’re going to have a system that doesn’t oppress the poor.' Voter endorsement of such progressive positions, well to the left of anything Clinton promoted during her message-lite campaign, was all the more dramatic in this reddest of red states."

Once upon a time, of course, Texas was a one-party Democratic state. It produced and consistently reelected such political giants as Lyndon Johnson and Sam Rayburn, not to mention Wright Patman, the twenty-four-term populist congressman who once enquired of Federal Reserve chairman Arthur Burns at a hearing: “Can you give me any reason why you should not be in the penitentiary?” But those days are long gone, along with the rural and working-class white Democrats who could be relied on to pull the lever for the ruling party. The last governor the Democrats managed to elect, in 1990, was Ann Richards, given to such feisty pronouncements as her reference to the elder George Bush being born “with a silver foot in his mouth.” Richards eked out a slim victory among a coalition that included white suburban voters-- but lost her reelection bid to the younger George Bush in 1994, ushering in an age of darkness for Texas Democrats.

That pall has spread across the country at an accelerating rate, as more and more statehouses and governors’ mansions fall under Republican occupation. Yet Texas, after leading the country in a slide to the right, might now be showing us the way out.

Amid the happy lawyers, journalists, and other movers and shakers at the victory parties, one group of seventy-five men and women, who had arrived on a chartered bus, stood out. Most of them were Latinos, like Petra Vargas, a Mexican-born hotel worker who had spent the day walking her fellow immigrants to the polls. Others were African Americans, such as Rosie McCutcheon, who had campaigned relentlessly for the ticket while raising six grandchildren on a tiny income. All of them wore turquoise T-shirts bearing the logo top. Not only had they made a key contribution to the day’s results-- they represented a new and entirely promising way of doing politics in Texas.

The Texas Organizing Project was launched in 2009 by a small group of veteran community organizers. Michelle Tremillo, a fourth-generation Tejana (a Texan of Mexican descent), grew up in public housing in San Antonio, where her single mother worked as a janitor. Making it to Stanford on a scholarship, she was quickly drawn into politics, beginning with a student walkout in protest of Proposition 187, California’s infamous anti-immigrant ballot measure. By the time she graduated, the elite university had changed her view of the world. “I always knew I was poor growing up, and I even understood that I was poorer than some of my peers that I went to school with,” Tremillo told me. What she eventually came to understand was the sheer accumulation of wealth in America and its leveling effect on the rest of the population: “We were all poor.”

Both Tremillo and her TOP cofounder Ginny Goldman, a Long Island native, had worked for ACORN, the progressive national community organization that enjoyed considerable success-- registering, for example, half a million minority voters in 2008-- before becoming a target of calculated assaults by right-wing operatives. By 2009, the group was foundering, and it was dissolved a year later.

In response, the activists came up with TOP. Goldman, who was its first executive director, told me that TOP was designed to focus on specific Texan needs and realities and thereby avoid the “national cookie-cutter approach.” The organization would work on three levels: doorstep canvassing, intense research on policy and strategy, and mobilizing voter turnout among people customarily neglected by the powers that be.

Despite Houston’s international cachet as the headquarters of the global oil industry, the Johnson Space Center, the Texas Medical Center (which employs more people than the entire United States coal industry), Rice University, and other dynamic manifestations of power and prosperity, many of its neighborhoods are more evocative of the Third World than the moon landings. Open ditches, often choked with garbage, line the streets of poor districts such as the Third Ward, Acres Homes, and Sunnyside. Thanks to Houston’s zealous rejection of zoning in any shape or form, industrial sites, including the huge Valero refinery in the Manchester district and the abandoned CES Environmental Services plant in South Union, a cemetery of toxic chemicals, sit just across backyard fences. It was in these neighborhoods that TOP found its constituency, and its first campaign.

...The problem has been especially acute in Texas, which produced the lowest overall turnout of any state in the 2010 midterm elections. Three million registered African-American and Latino voters stayed home that year, not to mention the 2 million who were unregistered. The result was a state government subservient to the demands and prejudices of Republican primary voters, and unrepresentative of the majority in a state where almost one in four children lived in poverty, 60 percent of public-school students qualified for free or subsidized lunches, and the overall poverty rate was growing faster than the national average. Following the crushing Republican victory in 2010, TOP launched an ambitious project to discover, as Zermeno put it, “who was not voting, and why.”

Digging deep into voter files and other databases, Zermeno confirmed that Texas contained a “wealth of non-voting people of color.” Most of them were registered, but seldom (if ever) turned up at the polls. The problem, she noted, was especially acute with Latinos, only 15 percent of whom were regular voters. In her detailed report, she calculated precisely how many extra voters needed to turn out to elect someone who would represent the interests of all Texans: a minimum of 1.1 million. Fortuitously, these reluctant voters were concentrated in just nine big urban counties, led by Harris.

Ever since the era of Ann Richards, Democrats had been focusing their efforts (without success) on winning back white swing voters outside the big cities. But Zermeno realized that there was no reason “to beat our heads against the wall for that group of people anymore, not when we’ve got a million-voter gap and as many as four million non-voting people of color in the big cities, who are likely Democrats.” By relentlessly appealing to that shadow electorate, and gradually turning them into habitual voters, TOP could whittle down and eliminate the Republican advantage in elections for statewide offices such as governor and lieutenant governor, not to mention the state’s thirty-eight votes in the presidential Electoral College. In other words, since the existing Texas electorate was never going to generate a satisfactory result, TOP was going to have to grow a new one.

There was, however, still another question to answer. Why were those 4 million people declining to vote? TOP embarked on a series of intensive focus groups, which were largely financed by Amber and Steve Mostyn, a pair of progressive Houston claims attorneys... Year after year, the Mostyns had loyally stumped up hefty donations to middle-of-the-road Democrats who doggedly pursued existing voters while ignoring the multitude who sat out elections all or most of the time. When TOP asked these reluctant voters about their abstention, the answer was almost always the same: “When I have voted for Democrats in the past, nothing has changed, so it’s not worth my time.” There was one telling exception: in San Antonio, voters said that the only Texas Democrat they trusted was Julián Castro, who ran for mayor in 2009 on a platform of bringing universal pre-K to the city, and delivered on his promise when he won.

“There’s this misunderstanding that people don’t care, that people are apathetic,” Goldman told me. “It’s so not true. People are mad and they want to do something about it. People want fighters that will deliver real change for them. That’s why year-round community organizing is so critical. People see that you can deliver real impact, and that you need the right candidates in office to do it, and connect it back to the importance of voting. It’s the ongoing cycle. We see winning the election as only the first step toward the real win, which is changing the policies that are going to make people’s lives better.”

Beginning with the 2012 election, TOP canvassers-- volunteers and paid employees working their own neighborhoods-- were trained to open a doorstep interview not with statements about a candidate but with a question: “What issue do you care about?” The answer, whether it was the minimum wage or schools or potholes, shaped the conversation as the canvasser explained that TOP had endorsed a particular candidate (after an intensive screening) because of his or her position on those very issues. These were not hit-and-run encounters. Potential voters were talked to “pretty much nonstop for about eight to ten weeks leading to the election,” according to Goldman. “They got their doors knocked three to five times. They got called five to seven times. They signed a postcard saying, ‘I pledge to vote.’ They circled which day they were going to vote on a little calendar on the postcard, and we mailed those postcards back to them. We offered them free rides to the polls. We answered all of their questions, gave them all the information they needed, until they cast a ballot. And what we saw was that the Latino vote grew by five percentage points in Harris County in 2012.”

Two years later, Texas Democrats nominated Wendy Davis, a state senator, as their candidate for governor following her filibuster against further restrictions on abortion rights. Her stand brought her national attention, a flood of campaign money, and the arrival of out-of-state Obama operatives who vowed to boost minority registration. Yet she lost by 20 percent to Greg Abbott and scored comparatively poorly with Latinos. Meanwhile, in the same election cycle, TOP and its allies blocked a bid by business interests to privatize the public-school system in Dallas. A year later, the organization helped to elect Sylvester Turner, a black Democrat, as mayor of Houston.

...Harris County is by no means the only arena in which TOP and its allies scored convincingly in 2016. East Dallas County, a band of suburbs to the east and south of Dallas, comprises House District 107 in the state legislature. Despite a Latino and African-American majority, Republicans have been carrying the district for years, albeit with narrow margins. This time, however, thanks to an intense registration and organizing drive by TOP and other groups, including labor unions, Victoria Neave, the Democratic candidate, ousted her Republican opponent by 836 votes.

“The interesting thing about that race,” Amber Mostyn told me, “is that the Republicans spent around a million dollars. There was no more than three hundred and fifty thousand dollars spent on our side, and no television-- the Republicans probably spent half a million dollars on TV. Our campaign was focused on getting folks to turn out, and we knew that a lot of them don’t have time to watch a bunch of TV. They’re working two jobs, they’re not engaged in the political process anyway, so if they see a commercial, it means nothing to them. But Victoria Neave was out talking to people, TOP was out talking to people, labor was out talking to people-- it’s the one-on-one engagement that makes the difference.”

It seems fair to say that the strategy deployed in this race (and in others discussed in this article) is the precise opposite of that adopted by Hillary Clinton’s team in 2016. Rather than asking voters what they actually cared about, the Clinton campaign and its associated super PACs spent $1.2 billion, much of it on TV commercials, and relied on Ada, a computer program, for key decisions, while remaining ignorant of what was happening in the real world. For example, around ten days before the election, members of the service-employees’ union in Iowa, where Clinton was clearly a lost cause, set off in a convoy of buses to campaign in Michigan, where the Democratic candidate’s lead appeared to be ebbing. According to Politico, Clinton headquarters in Brooklyn ordered the Iowans to turn around and go home. Their model still showed Clinton winning Michigan by five points. They therefore insisted that the S.E.I.U. foot soldiers would be better employed in Iowa, where they might delude Donald Trump into thinking that he was in trouble and thus force him to divert resources from elsewhere. Yet Michigan was indeed slipping away, a fact that Clinton apparatchiks could easily have discovered had they taken the slightest interest in communicating with anyone who could tell them the truth.

In contrast, TOP devoted energy and resources to ensure immediate feedback from the streets. Senior campaign managers took time to accompany canvassers on their rounds, with the aim of hearing for themselves whether their tactics needed to be tweaked or replaced. Meanwhile, all canvassers carried iPods and instantly entered the data they gleaned from their doorstep interviews. “We’d look at the numbers every evening,” explained Zermeno, “to see if there were any trends. Then, in the morning, when the canvassers all came in, we’d ask the questions. Did we change the rap? Are you guys hearing something? Then we could tweak the message on the spot.”

“Demographics are not destiny,” Craig Varoga remarked to me at the end of a long conversation. “But demographics with hard work and smart decisions are destiny.”

In a post-election memo, Zermeno discussed the various victories and near-victories scored around the state. “In the deep red South,” she wrote, “this election demonstrated what we’ve believed about Texas for many years: Texas is the future. . .  Sí se puede.” Yes we can.

Yes, Texas and the Sunbelt are part of the future of the Democratic Party. But giving up on blue collar workers in the Midwest is something only people as stupid and desperate as Pelosi's DCCC would seriously consider. Not to take anything away from Cockburn's analysis, I believe the very first post-Trump local election was for a west Davenport, Iowa state House district. Hillary won that district 52-41%. Monica Kurth, the progressive Democratic candidate who won it a month ago took it in a landslide-- 72% to 27%, an early warning to Iowa-- and national-- Republicans that anger and revulsion towards Trump and his neo-fascist regime, towards enablers like Paul Ryan, Mitch McConnell and GOP-controlled legislatures, are going to spark electoral backlash that the Republicans are utterly unprepared for. I hope by next year the DCCC is. Meanwhile, Blue America has endorsed our first Texas congressional candidate for the 2018 cycle, Tom Wakely, who plans to complete what he started in 2016, replacing anti-science Trump surrogate Lamar Smith. Please consider giving him a hand by tapping on the thermometer on the right.

What Can We Expect From Tim Canova If He Beats Wasserman Schultz? Take The Issue Of Auditing The Fed

If someone asks what Debbie Wasserman Schultz is best known for, legislatively-- so not the political shenanigans that have brought her into such universal disrepute-- it would be hard to find a single issue she has worked on more assiduously-- and, alas, more successfully-- than protecting the monopolistic pricing structure of the sugar industry, largely run by her mega-financial supporters, the Fanjul brothers-- Florida Crystals Corp, Domino Sugar, C&H Sugar, American Sugar Refining, Redpath Sugar, etc. The Fanjuls' have financed the political rises of both Debbie Wasserman Schultz and Marco Rubio. It's not about ideology; it's about cash flow. Wassermann Schultz,more than anyone else in Congress, has been able to keep the price of sugar to consumers artificially high... and Fanjul money has bought her power and position inside the Democratic Party. Her right-wing GOP ally, Ileana Ros-Lehtinen, termed her "a tiger" for the way she was able to defeat powerful Democrats like Charlie Rangel trying to lower the cost to consumers.

If Tim Canova beats her in the Democratic primary in August, he will be the new congressmember from the 23rd district, which stretches from Miami Beach up through southern Broward County to Hollywood and Dania Beach and west to Davie and Weston. Democrats enjoy a 22-point registration advantage and Obama beat McCain 61-39% in 2008 and then beat Romney 62-38% in 2012. Canova's presence in Congress would likely be very different than Wasserman Schultz's. As Canova said yesterday, he has a very different set of priorities.

"Debbie Wasserman Schultz has received huge amounts of corporate money-- from Wall Street, private prisons, big alcohol. Her corporate influence shines through in the policies she supports in Congress, like privatizing prisons, opposing medical marijuana, and voting to prevent Elizabeth Warren’s Consumer Financial Protection Bureau from writing rules that would stop racial discrimination in car loans. Those are not the policy priorities of someone who is focused on helping working families-- those are the policy priorities of someone who is more interested in helping their wealthy donors make more money. We can do better than that. Together, we can advance a progressive vision of this country that gives everyone a fair shot at the American Dream."

Tim is a progressive Democrat; he will fight for core Democratic values and principles, from women's choice, racial and gender equality, organized labor, reducing income inequality, working for a clean and sustainable environment, keeping corporate power in check... but the work he has done before-- with Senators Paul Tsongas and Bernie Sanders point in the direction of an expertise in something which is more arcane and incomprehensible for most voters: Fed policy. David Dayen took a good look at that aspect of Tim's campaign in his New Republic piece this week.

The bipartisan effort to hold the Fed more accountable is an on-going effort. The oligarchy is determined to never allow an audit. And Wall Street has enough paid off shills in high places to make it next to impossible. Yesterday Wall Street's top Capitol Hill whore, Chuck Schumer (who has taken $23,538,638 in legalistic bribes from the Finance Sector), engineered the defeat of Ron Paul's S. 2232, a bill to require a full audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks by the Comptroller General. It only got 53 of the 60 votes required and the only Democrats who bucked Schumer and voted for the audit were Tammy Baldwin (D-WI) and Bernie Sanders (I-VT). We usually expect better from Elizabeth Warren, Sherrod Brown, and Jeff Merkley. And, oddly enough, before Schumer threatened everyone, some of the same senators were in the House in 2009 when Ron Paul and Alan Grayson did pass an Audit the Fed bill were co-sponsors of that bill. They voted against the exact same bill this week-- including Chris Murphy (D-CT) and Mazie Hirono (D-HI). And when the Audit the Fed bill passed in 2012 among those voting yes-- but who were apparently cowed by Schumer this week-- were Joe Donnelly (D-IN), Martin Heinrich (D-NM), and Chris Murphy (D-CT). I wonder what Schumer said to change their minds on something so fundamentally crucial.

Marketwatch reported that on the Senate floor Paul said the bill was designed to "pull back the curtain and uncover the cloak of secrecy” at the Fed. Wall Street wants that cloak of secrecy intact and Schumer delivered for them big time. I guess all that Wall Street worry about Sherrod Brown wasn't necessary after all.

Now let's circle back to what we can expect from Canova in Congress if he replaces Wasserman Schultz-- a proposition Florida observers are split on, idealists and activists sure it can be done, establisment types claiming it's impossible. Yesterday I got to ask Tim about the Fed, in the light of so many Democrats in the Senate voting against it despite having once supported it. "Regular independent audits of the Federal Reserve," he told me, "are a good idea. They would help Congress, the public, and the markets to better understand the conduct and course of monetary policy. Unfortunately, the Fed has always resisted more transparency." He continued:

In the early 1990s, the Fed bitterly fought releasing transcripts of its Federal Open Market Committee meetings. The Fed lost, and the sky did not fall. In 2009-2010, the Fed strongly opposed audits of its emergency lending authority facilities. Those emergency facilities were audited, and again, the sky did not fall. Instead, these audits helped us see how the Fed was using its facilities to prop up elite financial interests while ignoring the interests of Main Street.

There is nothing that justifies special treatment for the Fed and monetary policy versus other government agencies and their functions. The central bank should be accountable to Congress rather than Wall Street. As the Washington Post recently detailed, this is what Democrats used to believe for many years. An audit of the Federal Reserve and a more democratic and accountable central bank is a traditional Democratic policy agenda item, first proposed by a former sharecropper from Texas, Wright Patman. By contrast, an 'independent' Fed, unaccountable to Congress and the public, is a traditional posture of Wall Street. During the Great Depression, Roosevelt's Federal Reserve engaged in direct lending to spur recovery. That's the kind of Fed we need, as I noted in the American Prospect in 2010.

Today, even after seven years of economic recovery, depressionary conditions persist for millions of Americans in countless neighborhoods. The Fed should be doing more to promote economic recovery from those left behind. It is time for Democrats to return to the principles and policies of accountability and transparency in our financial markets and central bank. Auditing the Fed is a first step to better understand the nature and scope of existing Fed operations and where Fed policy should go from here.

With Grayson gone from the House-- hopefully battling with Wall Street (i.e., Schumer and McConnell) in the Senate starting in 2017-- House Democrats will need someone to work effectively across the aisle with the serious anti-Establishment Republicans like Justin Amash, Walter Jones and Thomas Massie who want to audit the Fed and hold the Wall Street titans accountable. That's not going to be Debbie Wasserman Schultz or any other Wall Street puppet inside the House Democratic caucus. Please consider contributing what you can spare to Tim Canova's campaign.

Imagine If Candidates Were Chosen By The Voters Because They Actually Know Something-- Meet Lillian Salerno (TX-32)

While more Republican incumbents assess their party's-- and their own-- electoral prospects next year and respond by announcing early retirements, a flood of qualified Democrats are rushing to announce their candidacies across the country. Mainstream conservatives Ileana Ros-Lehtinen (R-FL), Dave Reichert (R-WA) and Charlie Dent (R-PA) were joined yesterday by Michigan foreclosure king, Dave Trott and the rumors about Leonard Lance (R-NJ) have been like a buzzsaw today.

Meanwhile, Democrats are flocking to announce their candidacies-- and in districts that the DCCC has studiously ignored for years. Let's take TX-32 for an example, a carefully gerrymandered district in the northern Dallas metro designed specifically to exclude minority voters to keep crooked GOP hack Pete Sessions safe. Last year the district PVI was R+10. Despite the gerrymandering that removed minority heavy areas around Irving and Grand Prairie, the new PVI is R+5. McCain beat Obama 55-44% there and Romney did even better-- 57-42%. But TX-32 was not Trump country last year. Hillary didn't campaign there or run ads there but she beat Señor Trumpanzee 48.5% to 46.6%. The backward-looking and incredibly incompetent DCCC didn't bother even fielding a candidate and Sessions cruised to reelection against a couple of un-funded independents with 71.1%. He spent $2,559,457 and the independent who raised some money, Gary Stuard, spent $3,189. The DCCC hasn't paid any attention to Sessions and his district since he beat powerful Democratic incumbent Martin Frost there in 2004. This year, though, there are already nearly a dozen Democratic candidates who have declared, including former football star and Obama HUD official Colin Allred (no issues page on his website), Danielle Pellett (sounds liker a Berniecrat), Darrell Rodriguez (sounds like a Benriecrat), former Hillary Clinton campaign staffer Ed Meier, George Rodriguez, Ron Marshall, Chris Suprun (no issues on his website-- although a "coming soon" promise), Steve Love (website sounds like we're dealing with someone who isn't mentally competent), Todd Maternowski, Awbrey Tyler Hughlett (website indicates another possible crazy person) and today Lillian Salerno. How does anyone navigate a huge field like this?

Salerno looks interesting at first glance. Obama appointed her deputy undersecretary of rural development for the Department of Agriculture, where she served from 2012-2017 and then moved back to her native Dallas.

Back in April, Salerno wrote an OpEd for the Washington Post worth looking at in light of what she would bring Congress, Want to rescue rural America? Bust monopolies. "Since President Trump’s election," she wrote, "much has been made of his rural, heartland voters, and how politicians can better serve them, with most discussion centering on international trade and globalization. But there is another political and economic disaster crushing the heartland-- one politicians could solve now, if they chose to. For decades, rural America has been punished by bad policy that places too much power in the hands of distant financiers and middlemen through the formation of monopolies, which undermines small, local businesses and drains communities of resources. I know, because I started a company in rural Texas, and the challenges I faced illustrate the problem."

In 1994, at the height of the AIDS crisis, in which I lost several friends and a beloved employee to the disease, I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product-- a lifesaving product-- they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good.

The environment in rural Texas was perfect for our company. We had a talented workforce, the means to build and ship our products, and a community that supported our work. But because the hospital and medical device market was intensely concentrated, our company didn’t reach its full potential. Our business became mired in litigation rather than innovation. And the entire community of Little Elm suffered as a result.

Ours is a common story. For years, rural and small-town America have fought an uphill battle for economic survival. Many in the halls of power viewed the shuttered storefronts and desolate downtowns as the inevitable consequence of globalization and technology, about which little can (or even should) be done. But one major force behind the steep economic decline is something that, until very recently, has received virtually no attention: the unprecedented level of corporate monopoly power that has been concentrated throughout the American economy.

The consequences are wide-ranging and dramatic (one new research paper found that the increase in corporate consolidation effectively transfers $14,000 a year from workers’ wages to corporate profits). But nowhere are the effects more visible than in rural and small-town America. In these communities, corporations dominate local economies to such an extent that people are unable to start their own businesses or sell into markets. They are no longer free to take their labor elsewhere for better pay. Small town businesses and the communities they serve no longer have the power to shape their own economic destinies, which were once vigorously protected by federal antimonopoly laws.

Let’s look at just one indicator-- new business formation. From 2010 to 2014, 60 percent of counties nationwide saw more businesses close than open, compared with just 17 percent during the four years following the 1990s slowdown. During the 1990s recovery, smaller communities-- counties with less than half a million people-- generated 71 percent of all net new businesses, with counties under 100,000 people accounting for a full third. During the 2010 to 2014 recovery, however, the figure for counties with fewer than half a million people was 19 percent. For counties with less than 100,000 people, it was zero.

How did we get here? After the Great Depression, the government used antimonopoly laws to keep markets open and fair for smaller, independent businesses-- in other words, to keep mom-and-pop shops open and Main Street buzzing. These were businesses run by people who cared about and understood their communities, that kept wealth circulating locally, that created the vast majority of new jobs and that were often the source of game-changing innovation.

But in the 1980s, folks in power decided bigger was better, and conventional political wisdom followed suit. For the federal officials charged with protecting competition, that meant that cheap consumer prices trumped all other values, including the preservation of American jobs, open and competitive markets where innovation could flourish, and maintaining level playing fields for start-ups and small businesses. To this day, when government officials evaluate mergers, it’s considered a good thing when they result in job losses-- because that means, in the twisted reasoning we still use, gains in economic efficiency. The hard-working Americans turned out on the street corner to look for new jobs are the human sacrifices to the insatiable beast of corporate concentration.

This slow-rolling wave of corporate mergers has left almost all major markets-- airlines, telecommunications, health care, retail, milk, seeds for growing crops, hardware, even cowboy boots-- dominated by a cluster of mega-corporations, cloaked behind a plethora of brand names. These behemoths now hold unprecedented power over thousands of once-thriving community economies.

Corporate concentration has hit farmers, ranchers and agricultural workers especially hard. Many markets are entirely monopolized by a single company that dictates the terms of business to suppliers. Two decades ago, in the seed industry alone, 600 independent companies existed. Today there are six giants, several of which are pursuing high-profile mergers that will result in even more radical concentration. Similar levels of concentration exist for the beef, pork, chicken and dairy industries. The result is that the farmer’s share of each retail dollar of food has been collapsing, while consumers pay either the same or higher prices. Mega-corporations in the middle exploit their dominant market positions to reap all the profits.

It is a myth that the economic challenges that rural and small-town America face are caused by forces largely outside our control, like globalization or improvements in technology. We have the ability to help restore competition and economic vibrancy in rural America and beyond. The government has the authority to ensure markets are once again open and competitive so that communities have a chance to shape their own economic destinies. The question is whether we will recognize the error of our ways and put taking on monopolies high on the economic agenda-- for rural and small-town America, and for everyone who wants to ensure our country can once again be the land of opportunity.

The primary is six grueling months away-- March 6. This is absolutely an important and flippable district to watch, one a Democrat, as long as he or she has something to offer aside from party label, should be able to win either in 2018 or in 2020. I spoke with Lillian Salerno this afternoon and she came across as a populist very much in the tradition of people like Sam Rayburn, Ann Richards and Lloyd Bentsen. She even mentioned that great Texas legislator Wright Patman to be, not something you hear from many candidates these days. And she told me "We burden our students with more debt than they can pay. We deny our workers a livable wage and affordable healthcare while we send all the prosperity to Wall Street. I'm going to Washington to return the government to the people."

The Facebook Monster... What Do We Do About It?

Let's not wait for President Beto to get to the White House before taking action on Facebook

First a caveat: I don't really "get" Facebook and my page is pathetic and 95% of the time I just use it to promote my DWT posts. I kind of feel sorry for people who think Facebook posts are a reliable source of information about politics or, for that matter, for anything of substance. Last week, Politico published a feature by my old pal, Matt Stoller, who formerly worked for Alan Grayson and then Bernie Sanders and now works at the Open Markets Institute-- Democrats Need to Tame the Facebook Monster They Helped Create. "Breaking up the social networking behemoth is one option," he wrote. "But first, Democrats need to start pointing the finger at regulators who won’t admit there’s a problem." We'll go further, but first let me put something in the back of your mind about the money Facebook spreads around in Congress.

The top graphic-- lobbying isn't what I want to get into, aside from noting it. The bottom graphic is the one I want to draw more attention to. In the last cycle, Facebook spent over a million and a half dollars in bribes-- legalistic bribes disguised as campaign contributions, $308,600 to Republicans and $1,232,217 to Democrats. These were the dozen top recipients among House members and House candidates:

• Beto O'Rourke (New Dem-TX)- $75,005
• Jacky Rosen (New Dem-NV)- $29,387
• Kim Schrier (New Dem-WA)- $27,022
• Max Rose (Blue Dog-NY)- $24,385
• Josh Harder (New Dem-CA)- $21,883
• Josh Gottheimer (Blue Dog-NJ)- $18,000
• Steny Hoyer (New Dem Daddy-MD)- $16,400
• Lauren Baer (D-FL-- lost election)- $16,320
• Kirsten Sinema (Blue Dog-AZ)- $16,185)
• Zoe Lofgren (D-CA)- $15,400
• Nancy Pelosi (D-CA)- $15,400
• Kevin McCarthy (R-CA)- $15,000

One Republican: the House minority leader-- and an awful lot of Democrats with reputations for selling votes and influence. Also... no progressives; just arguable corruptible conservatives. So why was Facebook ready to spend so much money to buy friends in Congress? Stoller gets right to it: "If you are thinking about Facebook or questions of political economy, an important and telling hearing took place recently in the House Energy and Commerce Committee. Democratic leaders Frank Pallone and Jan Schakowsky did an oversight review of Facebook’s regulator, the Federal Trade Commission, with all five commissioners, including Chairman Joe Simons, advancing ideas on how to address privacy rules in America today. And yet, sitting in that room, you’d have no idea, except for a few people in the audience holding protest signs sharply dismissed by Schakowsky, that there is deep anger from all over the world toward Facebook. This includes calls from multiple former corporate insiders, such as co-founder Chris Hughes, to break up the company as a monopoly. FTC Chairman Joe Simons didn’t seem to notice. He offered a self-satisfied observation about his commission’s work, its 'vigorous and effective' programs, and its 'significant' impact to keep markets open and free. But it wasn’t just Simons who was out of touch. The Democrats offered little criticism of the commission, and actually called for the FTC to get more money and more authority. 'Too often,' Pallone lamented, 'the FTC can do little more than give a slap on the wrist to companies the first time they violate the law.' What Pallone ignored is that Facebook has broken the law, multiple times, and the FTC has authority to act. But the commission just won’t. Instead of acknowledging the unwillingness of regulators to do their jobs, Pallone is rewarding the agency for failure."

Pallone is a notorious crook, one of the most corrupt men creeping around Congress. He takes immense sums of money from the companies and industries his committee oversees, more, in some cases, than anyone else in the history of Congress. Pallone should be rotting in prison, not chairing hearings. He'd taken $12,000 from Facebook since 2012. Yet he didn't think it necessary to recuse himself from chairing the hearing.

Pallone and Schakowsky are sophisticated policymakers who understand there are serious problems with Facebook, yet even they cannot seem to recognize that the problem is the regulators in charge of the problem aren’t doing their job. How did we get to the point where people who could actually do something about this problem don’t seem to realize their own power to address the situation in the first place?

The rationale for Pallone to avoid FTC failures is clear. For one thing, Democrats want to pass a federal privacy bill which would place rules on companies that handle personal data. They need new authorities and a regulator to implement such a bill, and the regulator on hand is the FTC. So they can’t very well acknowledge that the regulator is an institutional catastrophe, and at the same time call for more of it. (It brings to mind the old joke, “this restaurant’s terrible, and the portions are so small.”) The second reason Democrats have a problem pointing the finger at the FTC is because the failures at the agency largely happened under the Obama administration.

And yet, recognizing that the privacy problem is really because of failures at the FTC is an essential first step to solving it. Facebook doesn’t encompass everything that’s wrong with our privacy regime, and clear rules around privacy wouldn’t address all of what people fear about Facebook. But generally speaking, Facebook and Google are the best examples of how business models based on pervasive surveillance structure our culture.

Facebook makes its money from behavioral targeted advertising. This means tailoring ads to each user based on what it knows about them, generating traffic through incendiary content so it can have a lot of ad slots, and then placing ads in the least expensive ad slot possible. This means the company has the incentive to collect as much personal information about each user as possible, and it has the incentive to prioritize poor quality content. Users and advertisers have nowhere else to go to an increasingly poor quality product, because Facebook has bought up its competition. Addressing a broken market structure like this one is the kind of problem the FTC was set up to address.

A a result, Facebook is now dominant in the social networking market. If you don’t like Facebook’s main product, which is an increasingly bad consumer experience, there is, as Senator Lindsey Graham made clear when questioning Mark Zuckerberg, no alternative not owned by Facebook.

The FTC is in charge of blocking anti-competitive mergers, and perhaps the most consequential failures had to do with the mergers that enabled Facebook to become a monopoly. It bought Instagram in 2011 and WhatsApp in 2014. It bought Onavo, a spyware tool that allowed the company to surveil its competitors, watch their traffic and copy their best features. The FTC blocked none of these. The Democrats had a monopoly friendly posture during the Obama-era Democrats; it was an open secret that Sheryl Sandberg was likely to be in Hillary Clinton’s Cabinet.

Facebook’s model is also the result of lax regulatory choices that also happened under previous administrations. Facebook users weren’t always so apathetic about privacy. In the mid-2000s, there were broad, vibrant debates on the site about privacy. As tech entrepreneur Dina Srinivasan reminds us, Facebook beat its competitor MySpace by portraying its site as a safe space for college students, in contrast to the anything goes mantra of the existing social networking systems of the time.

From 2007 onward, in both the Bush and Obama eras, Facebook abused the privacy of its users and did not disclose its terms and conditions. In response to a massive user group titled “Facebook Users Against the New Terms of Service,” the company banned the use of Facebook in the title of groups. Marc Rotenberg from the Electronic Privacy Information Center routinely issued complaints and sued the FTC to get the commission to enforce the law. Finally, in 2011, the FTC and Facebook signed a consent decree, settling charges that the company’s practices were “unfair and deceptive, and violated federal law.”

Joe Simons, when he was appointed to run the commission in May 2018 by President Donald Trump, pledged to look back at mergers, to see if the FTC’s merger policy made sense. So far, Simons hasn’t bothered to follow through on his promise, though the FTC does have economists who spend their time attacking critics who engage in merger retrospectives.

Democrats are right that the FTC does have regulatory gaps, like the ability to issue fines on the first offense. And courts are often hostile. But they are wrong to chalk up failures to resource and authority limits. Violations of consent decrees have teeth. As Commissioner Rohit Chopra has noted, the FTC has powerful tools to address repeat offenders, including fines of roughly $40,000 per violation. Given that privacy violations usually number in the millions, a repeat offender that has signed a consent decree with the FTC is basically at the mercy of the commission. But since 2011, the commission has done virtually no follow-up or enforcement on Facebook (or Google, which signed a decree in 2011, as well). There are other levers, such as research capacity, and so-called Section Five authority to bar unfair methods of competition, but it hasn’t used those either.

The reason the FTC has done little is not because it lacks authority, but because its officials simply do not believe there is a problem to be solved. As the New York Times reported last year, the official in charge of the Facebook investigation, James Kohm, sees Facebook as a legitimate business offering free services, and doesn’t believe the company has violated its promises to the commission. And far from holding him accountable, Chairman Simons gave Kohm a Presidential Rank award. The FTC might kick a scam artist once in awhile, but when it comes to big companies, FTC officials don’t want to use the authority they have. They see themselves not as cops but as deal-makers.

...Unless Democrats are willing to take on this rotten philosophy at the FTC, offering more authority and funding without changing the leadership of the agency will make the problem only worse, for two reasons. One, suggesting the problem is a lack of money and authority is a built-in excuse for inaction to use what authority the commission does have. And as I’ve shown, it has a lot. If it didn’t, Facebook wouldn’t be willing to pay a large fine just for public relations purposes. Two, if the FTC gets extra money and authority, it won’t do anything with it. It doesn‘t believe in standing up to powerful businesses, and that’s not going to change until Congress starts kicking it in the teeth.

Democrats have been here before. In the 1920s, the FTC spent its time organizing price-fixing cartels among big businesses, angering anti-monopolists. And yet Democrats wanted to extend regulatory authority over the stock market, with no institution that could handle the rule-making and administration, except for a degraded FTC.

They pursued a two-party strategy. They were critical and hostile. In 1933, populist Democratic Congressman Wright Patman organized enough members of Congress to cut $100,000 from the FTC’s proposed budget (a significant sum back then). But they extended, grudgingly, its authority. Congress tasked the FTC with regulating the stock market, but micromanaged the agency by giving the commission virtually no discretion over how to do it. The next year, Congress further humiliated the FTC, creating the Securities and Exchange Commission to take power from the commission.

By 1936, the strategy worked. The FTC had nearly doubled the percentage of its budget dedicated to anti-monopoly work, and it pursued price discrimination cases against the most powerful chain store in the economy at the time, A&P, all the way to the Supreme Court.

This assertive anti-sloth posture became a core part of the Democratic Party mantra. Before and during World War II, leaders like Senator Harry Truman used aggressive oversight to humiliate and undermine badly performing regulators and cheating business leaders. They encountered much of the same nonsense we hear today about the difficulty of acting, but they didn’t fall for it. As Clifford Durr, a key actor involved in building war plants capacity to defeat the Nazis put it, “Complexity was not nearly so great a problem as reluctance to do the obvious and simple things.”

We don’t have to go back 70 years to find good examples of institutional creativity. In the 1990s, it was state attorneys general in Iowa and Texas who brought the first case against Microsoft. The FTC had earlier deadlocked on whether to do anything about the company, and the DOJ had negotiated a useless settlement in 1994. In 1998, the Senate, in a hearing chaired by Orrin Hatch (and organized by Trump’s current antitrust chief), helped encourage the Department of Justice to join the states and bring the famous case that nearly split apart the company.

Today, there are officials acting to constrain Facebook, both abroad and in Washington. They just aren’t located at the Federal Trade Commission. Washington, D.C. Attorney General Karl Racine recently brought a consumer protection lawsuit against the social networking giant for its breaches of privacy. I was in the courtroom listening to some of the arguments last month, and I watched Facebook’s lawyer argue the prosecutor was out of step with the key regulator of privacy in America, the FTC. There are more state officials investigating, and you can be sure Facebook will continue to point to the FTC as its shield.

There’s a crisis right now, and Congress must step in.

On an institutional level, it can move money to Racine or other state attorneys general who have the willpower but not the resources. It can and should investigate the crisis of legitimacy at the commission, perhaps cutting the budget for travel so commissioners don’t jet off to Europe or Japan for fancy antitrust conferences, or increasing the budget for honoring Freedom of Information Act requests the commission ignores. To address the problem the FTC won’t, Congress should break up Facebook through statute, or be detailed and explicit about what to do to the social networking space rather than deferring to failed regulators. More broadly, it’s time to start imagining what a functional FTC, a functional government, and in turn, a manageable Facebook, might look like.