Why We Love Elizabeth Warren

Elizabeth Warren Attacks Beltway Powerhouse Third Way as Fronting for Wall Street

Wow, the gloves are finally coming off. Elizabeth Warren has been making good use of her Senate bully pulpit in terms of keeping the excessive power of the big banks and the haplessness of regulators in the headlines. But as readers know, we’ve had our doubts as to how much in the way of tangible outcomes she could achieve from the Senate. For instance, she’s dutifully sent pointed follow up questions as part of Congressional hearings to various regulators. The replies have been at best evasive, in the faux polite form of bureaucratic obfuscation and misdirection to (from the Fed) borderline dismissive.

More important in her use of her Senate microphone is Warren’s ongoing campaign to move the Overton window to the left on basic economic issues for what remains of the US middle class. It’s vital to note that positions that are regularly depicted in the media as “liberal” or “progressive,” such as strengthening Social Security and Medicare (even if it means raising taxes) and cutting defense spending in fact poll with significant majorities, so they are in fact both popular and centrist for those outside the elites.

But because, as political scientist has documented, American politics are driven not by voters but by powerful monied interests. And perversely, those groups on the whole seem to believe that bleeding ordinary Americans dry is a winning strategy for them. Short term, of course, it sure looks that way, but we look to be at the end of an economic paradigm, so how long they can keep that sort of thing up remains to be seen.

Two operatives from the Washington think tank Third Way put Warren in their crosshairs for daring to suggest that Social Security be strengthened and the rich be taxed more in a Wall Street Journal op-ed on Monday.

It’s critical to understand that Third Way presents itself as “centrist” which is code for “oligarchy promoters pretending to be reasonable” and has consistently advocated gutting Social Security and Medicare. As Dave Dayen wrote in 2010:

I know the world-weary journalist pose is to huff that the catfood commission will go nowhere, that the recommendations released today are politically impossible, and that it’s not worth getting worked up about. Indeed, any proposal that both Grover Norquist and Paul Krugman can take time beating about the face and mouth doesn’t appear to have a constituency.

But there is a constituency for this, and it begins and ends with Third Way, who wastes no time in telling the world that they can only be real manly men if they support cutting Social Security and health care for the poor, the elderly and veterans….The only proposals that are “serious” in Washington, according to Jonathan Cowan of Third Way, are the ones that hurt people who have no voice in the political process. In the name of “sacrifice.”

Daily Beast had a gag-reflex-inducing piece of puffery on the Third Way in 2011, describing it as the “Democrat’s new power base” and describing its influence over White House thinking. For instance:

Another area where its influence has borne fruit is the White House’s relationship with the business community. Throughout 2010, Third Way counseled Dems that anti-business populism was bad for the economy and the middle class, and a political loser. Since the midterm elections, Obama has been making moves to thaw that relationship, including a speech to the Chamber of Commerce this week.

Now the interesting bit that all of this paean to putting a “pragmatic” face on making the Democratic party into a retread of the Republicans is that it flies in the face of demographic trends. Young voters poll left on economic issues and the role of the government. Hence Warren poses a particularly interesting threat, in that she embodies the sort of alliance between older voters and the young on issues like consumer debt, social safety nets, and economic justice that is particularly threatening to the top wealthy and their minions. Is it any wonder that divisive generational messaging has gotten louder in the last two months?

With this as background, the Wall Street Journal attack by the Third Way’s Jon Cowen and Jim Kessler on Warren was frontal:

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The article contained the usual canards about pending Social Security “insolvency” and played the predictable age cohort warfare card. In fact, merely raising the cap on payroll taxes would be a sufficient fix; Dean Baker points out that the cost of Social Security will increase from 5% of GDP to 6%, which if the US focused on job and wage growth, is entirely manageable. But more striking than its predictable cherrypicking of information was its histrionic tone: “disastrous” “fantasy” “even more reckless” “collision course”.

The funny bit is that the progress of budget talks flies in the face of these screechy claims about political and economic viability. In sharp contrast with the high drama failed budget talks of 2011 and earlier this year, the negotiators are focusing on the most narrow deal possible to avert either another shutdown or more severe sequester cuts kicking in. The Republicans are finally hoist on the spending cut petard. Enough of them are in districts with military bases where deeper cuts (which the next round of the sequester would impose) would be toxic politically. So they are willing to make concessions. And from what I am told, neither side is willing to table the politically contentious issue of Social Security cuts in the form of chained CPI.

Warren did not take this insult lying down. She issued a letter to Jamie Dimon, Lloyd Blankfein, John Stumpf, Brian Moynihan, Michael Corbat and James Gorman asking them to voluntarily disclose their contributions to think tanks. Her message was clear: this isn’t technically lobbying but we all know how this game is really played.

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This of course tees up an easy follow up: she can pursue the CEOs in future hearings if they don’t cooperate, and threaten legislation aimed at the banks. Given the banks’ welfare queen status, legislation aimed at them would get favorable media coverage and would also dent the perceived legitimacy of think tanks.

Politico credits Team Warren with having landed a blow:

A chorus of groups aligned with the liberal wing of the party – from the Progressive Change Campaign Committee to Howard Dean’s Democracy for America and Russ Feingold’s Progressives United – responded by attacking Third Way as a Wall Street-funded front group.

A liberal candidate running in a crowded Democratic primary, John Hanger, then joined these groups Wednesday morning in calling on Rep. Allyson Schwartz, the early Democratic frontrunner in the race to take on Pennsylvania Republican Gov. Tom Corbett next year, to resign as an honorary co-chair of Third Way.

A few hours later, Schwartz condemned the piece for the Journal but declined to end her affiliation with the group.

“She read the op-ed and thought it was outrageous and strongly disagreed, and she told Third Way that,” said spokesman Mark Bergman. “She has constantly fought to preserve and protect Medicare and Social Security.”

Schwartz’s outrage is awfully disingenuous, given Third Way’s longstanding agenda of cutting down Social Security and Medicare. But the fact that someone who has a prominent role with Third Way has criticized a prominent article and distanced herself from one of its core positions is a sign the tectonic plates in the Beltway are moving. Heretofore, it was not just safe to attack “entitlements,” it was orthodox. That finally appears to be changing, and not a moment too soon.

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