After The Shutdown, Wall Street's Still On Top Of The World

The shutdown is the story of the moment. It has the danger of hostage taking. It has bitter, testosterone-driven conflict. It has human interest because real people are indeed getting hurt, some of them badly like the kids thrown out of Head Start. It has suspense because no one knows how or when it will end. But there are also other real things going on in the real world that have huge consequences for, yes, real people - and the media shouldn’t ignore those other stories.

I don’t want to minimize the danger of the shutdown and the debt ceiling fights at all. The House Republicans really are crazy enough to blow up the economy. And Obama could, as Damon Silvers points out in his terrific piece in the AFL-CIO blog, could go along with the Wall Street bait and switch of a grand bargain that they designed to benefit them – the “grand bargain” that would cut the benefits of people who earned them through a lifetime of work and who, for the most part, very much need them.

But what makes me craziest about this entire shutdown-a-palooza BS is this: While DC policymakers and the media obsess about hostage-taking absurdities forced on us by a Republican House with no other agenda than to destroy, we are ignoring the biggest and most fundamental economic issues that will determine the future of our country. Sooner or later the Republicans will fold because they will simply have to, because as we learned in the Clinton White House in 1995, the party that hates government will be blamed for shutting it down- it doesn’t matter how many phony legislative gestures they make, the American people will see through it and place blame where blame belongs.

But even after they inflict all that pain on themselves and fold like a cheap suit, giving all kinds of political benefits to us Democrats in the process and making us all happy, we will still have the Wall Street bankers on top of the world, and low-wage working poor on the bottom.

The good news is that there are signs that both the Wall Street guys and the working poor might have their worlds changed just a bit. In both cases it is all about the political pressure the progressive movement is providing.

In case you missed it, JP Morgan Chase is in a tense round of negotiations with the DOJ over a rap sheet as long as your arm. Eric Holder was paid a special visitation by the grand CEO himself, Jamie Dimon, who offered to settle on the cheap (a mere $3 billion to settle crimes that cost the rest of us so much more than that) and with no admission of wrong-doing. Holder, miracle of miracles, turned him down cold. While we don’t yet know where the final negotiations will end up, Chase will almost certainly end up paying far more than that, and having to admit wrong-doing, opening them up to future lawsuits. And if this happens, other banks will be under to pressure to negotiate settlements for their crimes as well.

Meanwhile, the state of New York is suing Wells Fargo for not following the terms of the weak settlement they had agreed to on the robosigning cases. And the big banks in general are feeling more and more heat from a combination of the SEC, key judges, and prosecutors. We are still a thousand miles from where we should be on justice for the big banks whose fraud and wanton gambling stole the economic well-being of most of us, but the early shoots of a spring of Wall Street accountability do seem to popping up.

Why is all this happening right now after years of big bank-coddling? It’s the never-say-die political pressure of so many housing and fair banking activists from all over the country who have built a movement that is finally starting to deliver something, and it is the brilliant and relentless leadership of Elizabeth Warren and other great political leaders. All of this is making administration officials like Eric Holder, and the bankers themselves for that matter, keep looking over their shoulder and make concessions to that pressure.

And speaking of movements, let’s talk about the other end of the scale from the wealthiest bankers on Wall Street: the working poor. Poor because they get paid so damn little for grueling, thankless work that bankers would never allow even their least favorite children to do. Over the last several months, we have seen more and more organizing action by low wage workers, from Wal-Mart workers to fast food workers. Last week, low wage workers who work for federal contractors did an amazing rally at the gates of the White House demanding that President Obama sign a long overdue executive order that would raise their wages. Meanwhile, over 30 members of the House and Senate sent Obama a letter demanding the same thing. For a President who spends a ton of time talking about income inequality and getting wages to rise, it is astonishing and terribly disappointing to me that the President in 5 years has done nothing on this executive order - an executive order that he promised labor leaders he would sign way back in 2007 when he was first running for President. But with workers speaking up for themselves, and with members of Congress now backing them, the tide may be turning here as well.

The shutdown shenanigans by the crazy Republicans is the big story of the moment, which is understandable because the stakes are so high and the drama is so real. I hope and believe that Democrats will decisively win this showdown, just like we did in the ‘90s. But over the long run, the drama over what happens to the most powerful in society, who have been unaccountable for so long, and what happens- as Jesus would put it- to “the least of these” is the drama that will define our society for the rest of the 21st century.

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