Former governor Martin O’Malley and former senator Jim Webb spoke at a firefighters’ union event earlier this month. Both are the subject of renewed press interest as they contemplate entering the presidential race. Sen. Bernie Sanders has been publicly weighing a run. Sen. Elizabeth Warren is being encouraged to enter the race.
All four have criticized Wall Street’s unethical practices and undue political influence. Leading contender Hillary Clinton, by contrast, has not.
Should that worry Democrats?
O’Malley Moves In
On a swing through Iowa last week, former Maryland governor and presumed presidential candidate Martin O’Malley said that “we must not allow another Wall Street meltdown to bring down hard-working families.” He once again called for reinstating Glass-Steagall, the bill that prevented big banks from investing (some would say gambling with) customers’ savings, adding “that too many Democrats have been complicit in the backslide toward less regulation.”
“Seven years after the Wall Street meltdown,” added O’Malley, “Americans are still experiencing the fallout.”
O’Malley has been circumspect about challenging Hillary Clinton, the presumptive frontrunner for the 2016 Democratic nomination. But the implications of his words weren’t lost on insiders. The bill, which effectively repealed Glass-Steagall, was signed into law by President Bill Clinton. Citigroup, the megabank whose formation was retrospectively legalized by that bill, was led by Clinton Treasury Secretary and longtime Clinton insider Robert Rubin in the run-up to the 2008 financial crisis.
O’Malley has made Wall Street regulation a campaign (or, rather, pre-campaign) theme. He told a Democratic gathering in February that Democrats “can’t let ourselves become the party of Dodd-Frank lite,” a reference to the 2010 financial reform bill that many observers believe should be strengthened.
Wall Streeters and their political allies have reacted heatedly and defensively to criticism. But O’Malley dismissed the idea of “trying to find ways to make sure that nobody’s feelings are hurt when we talk about reinvigorating and making more robust the regulation of Wall Street, so that rank speculation and gambling with other people’s money does not once again wreck our economy and our common good …”
“If a bank is too big to fail without harming the common good of our nation,” O’Malley told those Democratic Party insiders, “then it’s too big and we must break it up before it breaks us.”
In case anybody missed the point, O’Malley also told the assembled Democrats that “triangulation is not a strategy that will move America forward.”
“Triangulation” was the term for Bill Clinton’s 90s-era move to shift the party to a more corporate-friendly stance. In his most pointed remark, O’Malley added that “History celebrates profiles in courage, not profiles in convenience.” And earlier this month O’Malley told voters in New Hampshire that “part of what I’d hope to offer, if I decide to do this, is a return to the politics of principle.”
O’Malley holds progressive positions on other issues, too, ranging from Social Security expansion to the plight of immigrant children.
Webb vs. Wall Street
O’Malley isn’t the only potential candidate looking to run to Clinton’s left economically. Jim Webb – whose credits include military veteran, writer, lawyer, Virginia senator, and former secretary of the Navy under Ronald Reagan – is fond of saying he has “a union card, two Purple Hearts, and three tattoos.”
When he delivered the Democratic response to President George W. Bush’s State of the Union address in 2007, Webb said that “the health of our society” should be measured “not with the numbers that come out of Wall Street, but with the living conditions that exist on Main Street.”
Webb pushed a windfall profits tax on Wall Street, then complained that fellow Democrats helped kill it. “I couldn’t even get a vote,” Webb said. “And it wasn’t because of the Republicans. I mean they obviously weren’t going to vote for it. But I got so much froth from Democrats saying that any vote that was going to screw up fundraising.”
He’s pro-union, too. Webb recently told an audience at the International Association of Fire Fighters that “union membership has too often been vilified and misunderstood,” but that collective-bargaining rights are “essential to the health of the American economy.”
Shortly after announcing that he was forming an exploratory committee for 2016, Webb said that “The Democratic Party has lost the message that made it such a great party for so many years, and that message was: ‘Take care of working people, take care of the people who have no voice in the corridors of power.'”
“I think both parties have been taken over by elites,” Webb has said, who says that working-class whites can be lured back to the Democratic fold with “economic populism and fairness.”
As Bob Moser wrote in his detailed National Journal profile, “No other potential candidate in either party can offer the combination of deep foreign policy expertise and anti-Wall Street fervor that Webb can muster–and he’s staked himself out clearly and consistently to Clinton’s left in both realms.”
But, as Moser and others have also pointed out, Webb has also staked out some decidedly unprogressive positions in the past, on issues which include affirmative action and women in combat. He also possesses a somewhat idiosyncratic political style, one which is as yet untested on the national stage. (The tagline for his “Jim Webb 2016” website reads “Public Servant. Warrior. Author. Film Maker.”)
He has a long way to go to win progressives’ support, and his economic positions are sometimes muddled. But Jim Webb is clearly promoting a populist, anti-Wall Street message.
The Senators: Sanders and Warren
“I happen to believe that the business model of Wall Street is fraud and deception,” independent Senator and potential presidential candidate Bernie Sanders said last month. Sanders has a long record as a progressive and as an opponent of Wall Street excess. He has been using his new position as ranking minority member of the Senate Budget Committee to press for additional Wall Street reform and promote economic populism. (Our interview with Sanders is here.)
“What are her proposals to rebuild a disappearing middle class and to deal with the very high levels of poverty?” Sanders told Politico recently when asked about Hillary Clinton. “What are her proposals to create millions of decent-paying jobs in this country? What are her proposals to create a foreign policy that does everything it can to prevent us from getting into another disastrous war? What are her proposals to deal with the greed and recklessness and illegal behavior on Wall Street?”
“I think the average working-class person does not perceive the Democratic Party as prepared to take on the billionaire class, the big-money [interests] to protect the interest of all workers,” Sanders has said.
Sanders has yet to commit to a presidential race, although he reportedly “electrified” an Iowa town hall last month. He told The Nation‘s John Nichols that he’s “prepared to run for president of the United States.” but has also cited fundraising challenges and the need for a large number of volunteers as reasons for hesitation. He may yet choose to run, however, according to recent reports.
As for Sen. Warren, she made herself the leading voice for financial reform with her work on Wall Street oversight and the creation of the Consumer Financial Protection Bureau. She has used her position in the Senate to continue that fight, and in so doing has led observers to speak of the Democratic Party’s populist faction as its “Warren wing.”
That’s why, despite her repeated demurrals, supporters continue to urge her to run against Hillary Clinton. “Ready for Warren” and other progressive organizations have promoted a Warren candidacy. This weekend her hometown newspaper, the Boston Globe, ran three op-eds and an editorial urging her to run.
The Frontrunner and the Challengers
Hillary Clinton is leading all other potential Democratic nominees by wide margins, according to polls. She has begun addressing inequality in general terms, as she did this week when she said that “One of the biggest issues we face is income inequality, combined with wage stagnation.”
But, although she criticized a GOP attempt to roll back Dodd-Frank, Clinton has offered little in the way of Wall Street criticism or specific proposals for additional reform. She has remained silent about the large financial fraud cases that have led to billions in settlements and calls for criminal prosecution. And her comments about inequality have not been accompanied by concrete proposals for addressing it.
Clinton’s potential challengers, by contrast, appear to have all read the same political tea leaves. Although they are presumably speaking from conviction, their positions also line up quite favorably with polls from the past year that demonstrate a striking level of anti-Wall Street sentiment.
Those polls found that 79 percent of voters view Wall Street unfavorably; nearly 90 percent of voters, including most Republicans, are dissastisfied with government’s efforts to regulate Wall Street; 80 percent of voters in 2014 battleground states agree that “Politicians do too much to support Wall Street financial interests and not enough to help average Americans,” and this applies to both parties.
Bernie Sanders, and now Martin O’Malley, are potential candidates who articulate clear and progressive economic visions – against Wall Street and in support of economic equality. Jim Webb offers a strong dose of economic populism in his mix of messages. As Elizabeth Warren, who insists she has no plans to run, is receiving constant entreaties to change her mind – because she has become Wall Street’s most powerful challenger and is a powerful voice for economic populism.
The anti-Wall Street message has clearly struck a chord.
This leaves Secretary Clinton with a challenge: Does she remain silent on the subject, an approach that runs the risk of further painting her as a Wall Street-friendly candidate? Republicans have already begun using that charge against her (without apparent irony, despite their own wholesale surrender to big-bank interests). Or does she join her potential Democratic challengers in speaking out against Wall Street, an approach that seems to run counter to her instincts and her strategy?
The Clinton team might prefer to see this challenge go away, but that’s not likely to happen. That means she has a choice: she can offer her own strategy for reining in Wall Street, or run the risk of allowing others to define her position on this issue – in ways that could harm both her prospects and her party’s.