Monday, October 6, 2014

Big News! Elizabeth Warren and the Tea Party Agree

I used to drink the Kool-Aid.  I was in the banking industry for the early part of my career. I always thought that the restrictions that prevented investment banks and commercial banks from operating under the same roof were arcane and unnecessary.  With the benefit of hindsight, I can see that I was wrong about that. 

The Glass-Steagall Act was passed during the Great Depression (1933) with the intention of preventing government insured depository institutions (banks!) from taking too much risk at taxpayers’ expense.  The elimination of Glass-Steagall approved by a Republican Congress with enough Democrats to provide a veto proof majority and signed by President Clinton in 1999 was, in the minds of many, on the critical path to the financial crisis in 2007.

The champion of re-implementing those safeguards was Elizabeth Warren who, in 2010, was Sen. Harry Reid’s appointee to the Congressional Oversight Panel on TARP.  But, she was not alone.  Sen. John McCain (R-AZ) co-sponsored legislation to restore those regulations as did the bi-partisan duo of Sherrod Brown (D-OH) and David Vitter (R-LA) in the House.  In the end, we had to settle for the Volcker Rule that bans banks from using depositors’ funds for proprietary trading.

The Tea Party, a movement that has libertarianism roots, nevertheless agrees the restoration of the Glass-Steagall prohibitions would be productive.  The Tea Party Tribune recently featured a banner headline on the subject that reads “Bring Back Glass-Steagall” and mirrors Warren’s opposition to the Too Big To Fail (TBTF) banks.

Now a US Senator from Massachusetts, Warren has attracted attention from the liberal wing of the Democratic Party, those who think of President Obama as a centrist.

How was a former professor and government bureaucrat able to leverage her limited experience into a Senate seat on her first run at political office?

She did so by tapping into the anger that Americans feel across the political spectrum. 
Sen. Elizabeth Warren (D-MA)

There seems to be alignment between the origins of the support for both Sen. Warren (and what is now being called the “Warren Wing” of her party) and the Tea Party. They agree on who to be angry with – Wall St. and other corporate interests that have their way with our political system; and, politicians that seem to be in their thrall. 

There’s even some alignment between the philosophical underpinnings of their respective platforms.  Here’s a quiz for you.  What is the source of this philosophy?

“Government … has three basic functions:
1.  Provide for the national defense.
2.  Put rules in place… that are fair and transparent.
3.  Build the things together that none of us can build alone – roads, schools, power grids….”

Sounds simply and basic.  Must be a libertarian, right?

Well, no.  It’s from Sen. Warren’s blog. 

I was trying to tantalize you with my headline and chose an issue where the far left and far right are aligned to back it up.  But, it’s fair to say that when it comes to solutions, those two extremes are far apart.

Unlike the Tea Party, the Warren Wing of the Democratic Party, as it is now called, as well as Democrats more generally believe in government solutions.

I could go on about how and why I think their approach will lead to failure.  Perhaps, that would be the subject of another post (or three).  However, that’s not my focus here. 

The Tea Party wing of the Republican Party has become an obstacle to progress.  Lacking seniority in the House and seeking more clout, they prefer to stand on principle rather than seek compromise to find solutions to the major structural problems we now face – tax reform, unsustainable entitlement programs, an undereducated workforce and so on.

Will the Warren Wing act the same way?  Will the rise of a hard left to counterbalance the hard right be nothing more than political intransigence positioned as unwillingness to compromise on values?

The common origins of our anger and frustration with Washington represent an opportunity to find common ground – even as it requires us to compromise some of our principles -- to address the big issues of the day.

We were promised a “grand bargain”.  I’m still waiting.



  1. Chuck Rosselle
    Management, Consulting and Governmental Regulation in Energy and Technology

    You correctly identified that a common thread between orthodox Tea Party beliefs and left-leaning Progressivism is Libertarianism. In my view it's a mistake to immediately transition to the old Reagan line that government is the problem.

    In fact, significant change is necessary if we are to rediscover economic dynamism in this
    country. Government has a role as does the private sector; each side does things uniquely well when they are careful to stay within the bounds of their field of competence. Excessive regulation and inefficient bureaucracy is no worse than excessive greed and crony capitalism on the part of entrenched interest. If we cannot reduce the irrational demonization that seems to have infected both the far left and the far right, we will never get to a balanced set of governmental policies and realigned business priorities.

    In my view, Rand Paul is the only current politician I see trying to figure this out.

  2. Ralph Michalske, MBA
    Semiconductor Product Marketing Professional

    Hi John,

    I appreciate that you chose an eye catching title to your blog. It caught my eye. However, your real argument comes at the end of your blog where you say, "(Congress should) seek compromise to find solutions to the major structural problems we now face - tax reform, unsustainable entitlement programs, an undereducated workforce and so on". This is a brilliant idea.

    The far wings of the political spectrum don't really add anything to democracy or self governing, except a place to discuss and form new ideas. Yet today, the far wings have just enough power to stall centrist, highly compromised legislation. Often these extremists see their views as their principles for which there is no compromise. Such tenacious behavior doesn't work well in self-governing. In our Jeffersonian Democracy, we get gridlock. In the Middle East you get religious fanaticism which leads to perpetual war between religious sects. Even though these Middle East extremists are small in number, their war mongering tactics are gruesome enough to seize world attention. Despite the fact that their principles are defunct, they push on making life miserable for those within arms reach. They only captivate the hearts of a few, while alienating the rest of the population. I don't think we even have a name in English for this form of politics. I'm not sure we want one.

    Nevertheless, I'm with you. Americans need to compromise more. Self-governing has become challenging. For democracy to work where polar regions are abundant, there will need to be a good dose of compromise for us all.

  3. Lisa Wells
    Data Integrity and Risk Analyst

    Now if we can just get Governor Jindal of Louisiana to voice his solidarity with teacher's unions regarding similarly felt antipathy to Common Core.... it would be great! I love Glass-Steagall; 11 elegant pages.

  4. Alex Simonelis
    Faculty at Dawson College

    GS was excellent, and prevented the consumer banks from going to the casino with zillions of dollars of mortgage money, among other things.

    And Warren is excellent - educated, articulate, smart, experienced. If the Dems have any sense they will use her on the ticket somehow in 2016. She is way better and more attractive than Hillary.

  5. om Jeanette
    Everything, and Other Duties as Assigned

    The TEA Party agreeing with Elizabeth Warren on one issue (or even a few issues) doesn't merit the headline "Big News! Elizabeth Warren and the Tea Party Agree" any more than the NRA supporting rifle ownership by 18 year olds deserves the headline "Big News! NRA and Hitler Agree!" [Hitler lowered the age for rifles from 21 to 18].

  6. Ted Phelps
    PCG Consultants

    It's not so difficult to get agreement that there is a problem. It's the solutions that are telling. I'd be willing to bet that Sen. Warren's solution involves MORE government, while the Tea Party's solution will involve LESS government.

  7. Tom Jeanette
    Everything, and Other Duties as Assigned

    With Sen. Warren being held responsible for the solutions she proposes, I would trust her more than a faceless, inexperienced, bunch of Koch puppets that can't even organize themselves into a political party.

  8. Fred Bosick
    IT Professional

    I always thought that Occupy Wall Street and the Tea Party had much more in common than everyone expects.. Maybe that's why the coverage of the protests always had the "they're just bums" undertones in spite of the fact that most OWS protesters were degree'd people.

    The "bums" the media and Corporate America are actually worried about are the Tea Party rank and file who think they'll join the 1% if they just sit tight. If those people ever figured out that the game was fixed before they were even 5 years old, the corporate beholden politicians are *gone*.