Anger at Wall Street could force Republican retreat

Angry senators grilling Goldman Sachs executives on Capitol Hill fueled a firestorm that could break the GOP’s latest filibuster. That storm will arrive on Wall Street’s doorstep on Thursday, with thousands preparing to take their demand for financial reform into the lion’s den itself.

After Republicans and one Democrat blocked consideration of Wall Street reform last night, senior Democratic aides said that Senate Majority leader Harry Reid will continue holding one cloture vote after another to pressure the GOP into ending its filibuster of the bill making its way towards the president’s desk.

Even before Goldman Sachs CEO Lloyd Blankfein took the stand to testify in Washington today, the Senate Investigations Committee found that Goldman misled its clients and the nation. “Goldman Sachs reaped billions and billions of dollars in profits by secretly betting in 2006 and 2007 that the U.S. housing market would crash, a strategy that conflicted with the interests of its clients who were still buying the firm’s risky mortgage securities,” Senate investigators said last night.

As the investigators were releasing their findings union leaders and their allies repeated their calls for thousands to turn out for a march and rally in the heart of New York’s financial district April 29. “We are demanding an economy that works for all, not just a few on Wall Street,” the AFL-CIO said in a statement.

In Chicago, thousands will march tomorrow in that city’s financial district.

The latest polls show that more than two-thirds of the public supports curbing the power of the Wall Street banks and a 52-35 percent majority says President Obama can be trusted more than the Republicans to carry out financial reform.

The GOP obstructionism on financial reform differs in some respects from their stalling during the health care debate.

During that fight Republicans dragged out the negotiations to try to kill the bill. This time, because of the mass anger directed at Wall Street, killing the bill isn’t in the Republicans’ best political interests. So their aim now is to negotiate on behalf of Wall Street to weaken reform as much as they can.

The filibuster reflects both this approach and the continuing power of lobbyists over many in the Senate.

Sen. Bill Nelson of Nebraska, the one Democrat who joined the GOP filibuster, provided a dramatic example.

Observers say the removal from the bill of a provision that would have benefitted billionaire and Nebraska native Warren Buffet was behind Nelson’s flip. “He was on board until today and the only thing that changed was the removal of that provision, which would have exempted any existing derivatives contracts from being subjected to new capital requirements,” said one Democratic aide. “That provision had been pushed by Buffet’s Berkshire Hathaway Inc., which has $63 billion in existing derivatives contracts.”

The removal of the provision and the resultant strengthening of the bill actually points to one of the problems the filibuster is causing for the GOP and its backers. The longer they filibuster, the greater the chances that progressives have to make additional improvements in the bill.

“If the Democratic leadership becomes fed up with Republican stalling,” argued Baseline Scenario’s Simon Johnson, “they could actually strengthen the bill by including something like the Brown-Kaufman amendment.” That amendment would allow for immediate breaking up of the big banks.

Chances to improve the bill have been boosted by the refusal of Reid and Obama to give in to the lobbyists while they simultaneously try to broaden support for  reform.

Some say that by filibustering the Republicans have actually fallen into a planned trap. Reid has been defying Republicans to obstruct the bill and appears now to be exacting a political price from them for doing so.

The Huffington Post’s’ Chris Weigant noted: “Republicans, in this metaphorical card game, not only have a bad hand to play, but they were actually allowed to thumb through the deck and pick their own cards, and they still have no good cards to play.”

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John Wojcik
John Wojcik

John Wojcik is Editor-in-Chief of People's World. He joined the staff as Labor Editor in May 2007 after working as a union meat cutter in northern New Jersey. There, he served as a shop steward and a member of a UFCW contract negotiating committee. In the 1970s and '80s, he was a political action reporter for the Daily World, this newspaper's predecessor, and was active in electoral politics in Brooklyn, New York.