Washington’s passage of financial regulation last week served as a perfect reminder of so much that is wrong with DC.

Despite moderate legislation (I would say “watered down”), financial regulation only passed along essentially party lines. With elections having become endless year-round campaigns, we are left with a process where all legislation is examined only for political gain/loss and not policy implications. All of us, democrats and republicans alike, lose as a result.

Here in the 2nd District we have a front row seat to this disappointment. When Wall Street needed help, Congresswoman Schmidt was there to vote in favor of their bailout. However when the time came to vote to pass some basic, common-sense measures to ensure that taxpayers were not once again holding the bag for Wall Street’s excessive risktaking, Congresswoman Schmidt voted no. She has chosen to side with the interests of Wall Street bankers over those of her constituents.

All of this goes back to a climate in Washington that values winning elections and the preservation of power above all else. Preying on this, special interest groups are all too eager to step into the void with large checks to help their handpicked candidates win elections. So it is no surprise that groups like Wall Street get to write their own legislation and get hundreds of billion dollars in help when they need it. They have purchased the best representatives that money can buy.

Back to the financial regulation legislation– I don’t believe the present version of the bills go far enough. Sen. Sherrod Brown has proposed an amendment, Brown-Kaufman, which would be an excellent step to cap the size and leverage of the biggest banks. If we wish to ensure we don’t have a repeat of 2008′s disastrous events we must make “too big to fail, too big to exist.” So far this amendment has faced massive opposition from the army of lobbyists in Washington and their allies in Congress.

This is a great article on what’s going on behind the scenes of financial regulation. Great read.

Evan Bayh, senator from Indiana, recently announced he would not seek reelection. Apparently this has freed him to now say what he thinks and potentially become an extraordinary senator in his remaining 11 months. I suspect if he continues to not demonize and instead speak out with common sense against the obstructionist and harmful policies that plague our government he will be celebrated.

This is a link to an editorial where Sen. Bayh talks about the corrosive impact of excessive partisanship and campaign finances along with obstructionist Senate traditions that have been abused. I highly recommend you give it a read.

Among the key points that I wholeheartedly agree:

- Congressman should make a far larger effort to spend time together instead of just demonizing each other. We should demand this from those asking for our votes as well.
- Inch towards comprehensive campaign finance reform (I’ve mentioned in the past)
- Modifying the filibuster to prevent it’s rampant abuse to obstruct the basics of government

The challenges we face today are great. However if those steering the ship are not even having civil, constructive discussions it is difficult to even begin the work needed to get our country back on track.

We, the people, are losing our democracy. I’ve covered the recent Citizens United campaign finance ruling previously here. I want to talk a little bit more about why this is so important and what we need to do going forward.

The most common question I hear is something close to “Why doesn’t government work?” This is a blanket question for a frustration with politicians, broken campaign promises, the economy, our debt levels, current wars, and probably a dozen other things. We see so many things wrong– things that could be done better or that just don’t make sense, and it’s not evident why we can’t fix them immediately.

I believe that a major reason we have ended up in such a troubling spot as a nation is because of our inability to confront our challenges head on, and have honest debates about them. There are wide swaths of topics that are considered the “third rail” of politics, meaning that to even broach them risks political suicide. Health care has long been one such topic and it is increasingly clear why.

Why are major topics and subjects off limits? I’ll cite three quick reasons:
1) Partisan politics. One side will demonize the other by exaggerating positions and making hard choices. (gasp!)
2) Money. Politicians are afraid to offend the very people they depend on to fund their campaigns.
3) Getting smeared. Politicians are afraid that the interest group with something to lose will wage a nasty PR battle that could end up hurting their career and even losing their seat.

#1 is pretty simple. Most big problems require some kind of sacrifice or hard tradeoff and the party taking initiative can be made demonized for even bringing up the subject. This is just playing politics.

#2 is widely understood. Most politicians depend on money from the very special interests they hold legislative power over to win re-election. It’s no shocker then that we’re in the current sorry state that we’re in. The recent Court ruling only widens the role and influence that money plays in elections.

#3 prevents major topics from ever coming up. They will use their full force of advertising, lobbying, and media connections to destroy anyone who dares to threaten their cash cows. As the years go by, there are more and more of these special interests who have a lot to lose with a change of the status quo and they are willing to fight to preserve it.

For now let’s focus on #2. There is a current bipartisan bill in Congress from Durbin, Specter, Larson, and Jones that would help this problem. It seeks to provide an alternative financing of congressional elections. It provides a new directions for candidates to go in (voluntary) that would allow them to raise small dollar donations (up to $100) that are matched 4:1 once a candidate proves his viability by clearing a certain level. This decreases the influence of special interests (PAC’s, etc) and allows candidates to spend more time with ordinary constituents. This is obviously not a magical pill that will solve all our problems, but it is a step in the right direction. We are still left to fight political cowardice and opportunism along with the problem of special interests who will seek to manipulate public opinion to their ends. But this would be a good start.

“There will be no change, until we change Congress.”

Lawrence Lessig who I’ve posted about previously, just released an amazing article about the ills of Washington. I agree with much, if not all of it. The very fundamentals of our democracy are in danger and as our problems mount and our inability to address them is as loud an indictment that exists. Why? Read on.

This is an absolute must read. It is long, but well worth it.

Here are some of the standout quotes:

“The source of America’s cynicism is not hard to find. Americans despise the inauthentic. Gregory House, of the eponymous TV medical drama, is a hero not because he is nice (he isn’t) but because he is true. Tiger Woods is a disappointment not because he is evil (he isn’t) but because he proved false. We may want peace and prosperity, but most would settle for simple integrity. Yet the single attribute least attributed to Congress, at least in the minds of the vast majority of Americans, is just that: integrity. And this is because most believe our Congress is a simple pretense. That rather than being, as our framers promised, an institution “dependent on the People,” the institution has developed a pathological dependence on campaign cash. The US Congress has become the Fundraising Congress. And it answers–as Republican and Democratic presidents alike have discovered–not to the People, and not even to the president, but increasingly to the relatively small mix of interests that fund the key races that determine which party will be in power.”
…
This corruption is not hidden. On the contrary, it is in plain sight, with its practices simply more and more brazen. Consider, for example, the story Robert Kaiser tells in his fantastic book So Damn Much Money, about Senator John Stennis, who served for forty-one years until his retirement in 1989. Stennis, no choirboy himself, was asked by a colleague to host a fundraiser for military contractors while he was chair of the Armed Services Committee. “Would that be proper?” Stennis asked. “I hold life and death over those companies. I don’t think it would be proper for me to take money from them.”
…
“Is such a norm even imaginable in DC today? Compare Stennis with Max Baucus, who has gladly opened his campaign chest to $3.3 million in contributions from the healthcare and insurance industries since 2005, a time when he has controlled healthcare in the Senate. Or Senators Lieberman, Bayh and Nelson, who took millions from insurance and healthcare interests and then opposed the (in their states) popular public option for healthcare. Or any number of Blue Dog Democrats in the House who did the same, including, most prominently, Alabama’s Mike Ross. Or Republican John Campbell, a California landlord who in 2008 received (as ethics reports indicate) between $600,000 and $6 million in rent from used car dealers, who successfully inserted an amendment into the Consumer Financial Protection Agency Act to exempt car dealers from financing rules to protect consumers. Or Democrats Melissa Bean and Walter Minnick, who took top-dollar contributions from the financial services sector and then opposed stronger oversight of financial regulations.

The list is endless; the practice open and notorious. Since the time of Rome, historians have taught that while corruption is a part of every society, the only truly dangerous corruption comes when the society has lost any sense of shame. Washington has lost its sense of shame.”
…
“…there’s all the difference in the world between a lawyer making an argument to a jury and a lawyer handing out $100 bills to the jurors. That line is lost on the profession today. The profession would earn enormous credibility if it worked to restore it.”
…
“Drug companies fund members, for example, to stop reforms that might actually test whether “me too” drugs are worth the money they cost. But the reforms get stopped by being framed as debates about “death panels” or “denying doctor choice” rather than the simple argument of cost-effectiveness that motivates the original reform. A very effective campaign succeeds in obscuring the source of conflict over major issues of reform with the pretense that it is ideology rather than campaign cash that divides us.”
…
“Imagine an alcoholic. He may be losing his family, his job and his liver. These are all serious problems. Indeed, they are among the worst problems anyone could face. But what we all understand about the dependency of alcoholism is that however awful these problems, the alcoholic cannot begin to solve them until he solves his first problem–alcoholism.

So too is it with our democracy. Whether on the left or the right, there is an endless list of critical problems that each side believes important. The Reagan right wants less government and a simpler tax system. The progressive left wants better healthcare and a stop to global warming. Each side views these issues as critical, either to the nation (the right) or to the globe (the left). But what both sides must come to see is that the reform of neither is possible until we solve our first problem first–the dependency of the Fundraising Congress.”
…

If not now, how much more will it take? When will we say enough is enough and demand representatives that answer to us and not special interests?

Follow-up to the post earlier in the week. Unfortunately, as many of you already read, it’s not good.

When I look around, across the country, and see millions who are really angry at Washington, it’s not hard to understand why. It’s because we feel Washington isn’t working for us. That’s because it’s often not. Special interests fund our politician’s elections and then they get the handouts, protection, and benefits from the government. The net of it is that they get quite the return on their investment, which is why they keep pouring money in each year. This ruling continues and, likely, makes this unfortunate trend even worse.

We need elections that are free of the corrosive impact of special-interest control. Read about a terrific proposal from Change Congress on a really simple way to move forward and get to work solving our biggest national challenges instead of working for the benefit of special interests as we’ve been doing.

Change Congress sent me a great reminder today that the Supreme Court is due to rule shortly on a very important campaign finance law. As things tend to go with the Supreme Court, the particulars of the case are no where near as interesting/troubling as the ramifications. Here are the important parts from CC:

Simply put, an unfavorable decision — which may come as soon as tomorrow — could overturn generations of election law, allowing corporations to spend unlimited sums of money supporting the candidates and causes that are best not for the American people but for their bottom lines.
…
It’s hard to believe that anyone could look at today’s political landscape and determine that corporations need more, not less, influence over Washington. But that’s exactly what the Court may do tomorrow…

This isn’t just a pivotal moment, but an opportune one as well. The decision will be covered on the front pages of every newspaper in the country — and millions of people will be wondering what they can do to bring sanity back into our political system.

We may not have another chance like this to rally people around the cause of changing our government — and we need to make sure we have the ability to organize and motivate them all at this moment of extraordinary passion.

The control of politics by moneyed special interests is not a shocker for most Americans. However, the brazenness at work here in pushing for more of the already staggering influence they currently have is shocking. Those defending this case as “corporate free speech” strike me as sharing with Wall Street bankers who claim they are doing “God’s work” a certain tone deafness.