Editorial: Essential move for Dems: Block Bernanke

The (Madison, Wis.) Capital Times

The United States already has a party of Wall Street. It does not need two.

Yet President Obama has, with his absurd nominations and even more absurd policies, given every indication that he intends to position the Democratic Party closer to corporate interests than all but the most reprehensible Republicans.

Forget about Obama's passing populism. As a candidate and as a president, he has consistently chosen to side with multinational corporations rather than working Americans.

After he secured the 2008 Democratic presidential nomination, Obama told Fortune magazine that business executives did not need to worry about his talk of reforming U.S. free-trade policies; despite some nice rhetorical flourishes on the primary campaign trail in hard-hit industrial states, Obama said, he had no intention of embracing or implementing a fair-trade agenda.

Once he was elected, Obama selected as his chief of staff the Democratic Party's most ardent advocate for free trade and the broader corporate program, Rahm Emanuel. Then, the new president peopled his administration with Wall Street insiders like Treasury Secretary Tim Geithner and economic adviser Larry Summers.

When it came time to fund an automobile industry bailout, Obama implemented a plan that shifted tens of billions of dollars from the U.S. Treasury into the accounts of firms that then announced they would close more than two dozen U.S. auto plants and use the federal money to open factories in China and Mexico. At the same time, those companies forced thousands of auto dealerships to shut their doors and lay off more than 100,000 workers.

In the fight over financial services regulation, Obama and his aides have regularly rejected serious moves to hold banks and brokers accountable, creating a circumstance where Democrats in the House and Senate must battle not just Wall Street and the Republican Party but the White House if they hope to achieve meaningful reforms.

If John McCain had compiled Obama's record, he would be condemned by even the most moderate Democrats as a tool of the corporate elite.

Because Obama is a Democrat, many in his own party continue to cut him slack. In doing so, they are giving the party of Franklin Roosevelt and Harry Truman just enough rope to hang itself in 2010. Unless there is a radical shift in direction, Democrats will find themselves running in this fall's congressional and state elections as the party of an economic status quo that most Americans believe is corrupt in its character and damaging in its practices.

How can the Democrats save themselves? By saying "no" to Obama and to Wall Street.

The president has nominated Ben Bernanke for a second four-year term as Federal Reserve chairman. No move sums up the failure of Obama and his aides to break with the corporatist policies of the Bush administration more explicitly than the attempt to keep George Bush's Fed chairman on the job.

Because the secretive and manipulative Federal Reserve plays such a definitional role in setting and implementing economic policies, Obama's decision to retain those responsible for the current mess is wrongheaded economically and politically.

Smart Democrats are refusing to go along with the president's program. In announcing his decision to vote against Bernanke's confirmation, U.S. Sen. Russ Feingold, D-Wis., summed things up well:

"A chief responsibility of the chairman of the Federal Reserve is to ensure a sound financial system. Under the watch of Ben Bernanke, the Federal Reserve permitted grossly irresponsible financial activities that led to the worst financial crisis since the Great Depression. Under Chairman Bernanke's watch, predatory mortgage lending flourished, and ‘too big to fail' financial giants were permitted to engage in activities that put our nation's economy at risk. And as it responds to the crisis it helped to usher in, the Federal Reserve under Chairman Bernanke's leadership continues to resist appropriate efforts to review that response, how taxpayers' money was being used, and whether it acted appropriately."

Feingold joins a growing chorus of progressive opposition to the Fed chairman's confirmation, an opposition that has been led by Sen. Bernie Sanders. The Vermont independent argues that Bernanke has presided over a financial system that "has not been as unsafe, unsound and unstable since the Great Depression."

No one who is paying attention would debate that point. Unfortunately, Obama has not been paying attention - even with the recent wake-up call from Massachusetts voters, who filled the late Ted Kennedy's Senate seat with a Republican.

Senate Democrats have an opportunity to do more for Obama than the president is willing to do for himself.

"The defeat of Ben Bernanke would give President Obama a golden opportunity to nominate someone who will move the Fed in a new direction and put an end to the Fed's relationship with big banks and Wall Street," says Sanders.

That's the smart and necessary play. The Senate should block Bernanke as the first step in forcing Obama and his administration to recognize the reality that, according to recent polls, more than 60 percent of voters see: When it comes to economics, the United States is headed in the wrong direction.

Instead of steering toward Wall Street, Obama should be veering toward Main Street.

And if the president refuses to make the left turn that is needed, then Democratic senators should take the wheel and correct the country's course.