December 15, 2009 05:53 PM UTC

Paul, Michael, and Me

• 9 Comments
• by: JO

When I read that Paul Samuelson had died, I frowned in the way that I frown on bad news involving someone who has played a role in my life once removed. Paul Samuelson’s role was to write my basic Economics 1 textbook. He was part of the “science” part of “dismal science,” holding forth the notion that economic activity behaves according to a set of underlying rules, not unlike physics, that can be discovered and quantified, so that, for example, a market crash is not unlike any other object falling from a high bureau onto a ceramic tile floor. Poof! goes the wealth.

In the Depression several such rules of economics were discovered, most notably by John Maynard Keynes. Like Keynes, Samuelson thought government has a role to play in modern economies, and that it should play that role. That conviction, as conveyed to me in Samuelson’s Economics, apparently did not make it to Wesleyan, deep in Lieberman country, when our temporary junior senator from Colorado was an undergraduate (though not yet “from Colorado”). I say this in light of his out-of-the-box resistance, last February, to Obama’s stimulus plans and his equally quick resistance to Chris Dodd’s banking regulation plans just this month. Nor have Republicans ever learned the lessons of  Keynes/Samuelson, which is one of the reasons that I question Michael Bennet’s Democratic Party credentials.

The 2010 debate over new financial services industry regulations is already shaping up to be a re-run of the same debate that took place during the ’30s. Now, just as then, that industry is lining up troops to resist new restrictions on their free-wheeling judgment on how best to make money with other people’s money, despite their astounding megafailure/crash at the end of this decade.

In this coming battle, our temporary senator has been identified as a promising warrior on behalf of the banks. How do we know? He ranks #4 in recipients of financial services PAC contributions. The fact that he is nominally a Democrat–although he has never been nominated by that party for any office–may or may not make him all the more attractive as a bankers’ agent ensconced in the Other Camp.

Should the Democratic Party be in the business of nominating bankers’ champions? Isn’t that what Republicans do? Shouldn’t the Democratic Party represent, as it did in the 1930s and afterwards, the broader interests of the economy, including small businesses and working people, even when those interests may be perceived to run contrary to the banking class? Bankers already own the Republican Party in Congress. They would like to own enough Democrats to thwart serious economic reforms, just as the Pharma/Medico/Health Insurers’ ownership of the Republicans and a sufficient slice of Democrats has managed (past tense) to thwart meaningful health care reform.

Frankly, I wish that Andrew Romanoff had come out pistols blazing behind significant reform of  financial services. Maybe he will still do so in an unmistakable way; we can hope. But I have absolutely no expectation that Michael Bennet will do so, having made his fortune specifically in that industry. He did not achieve notable success as a prosecutor, or as a lawyer, or as an inventor/entrepreneur. He made money for Philip Anshutz, and took a slice of it as his reward, by “restructuring” companies–not by creating new ones. It is hardly any surprise that the financial services sector should be showering his campaign with contributions–contributions he seems already to be spending on television advertising!

Not was it surprising that the second after beleaguered Chris Dodd came out with a proposal for regulating financial services, our Mr. Bennet was casting his serious frown on “unintended consequences.” While watching a Monday evening NewsHour piece on financial services reform (Dec. 14), I practically spilled by martini (dry, no olive) when I heard a spokesman for the banking industry use those very words: “unintended consequences.” Whoa! Am I hearing code? Is this the Phrase of the Year for 2010 from the banking industry? Time will tell.

Meantime, Our Boy Mike has already told his where he stands–against “unintended consequences,” assuming that the downsides for free-wheeling bankers are “unintended”–and has already been rewarded for his efforts, past and future, with fulsome PAC contributions. If Colorado Democrats can’t do better than this–and no, there’s no guarantee they can or will, in which case I’d be willing to predict a relatively low turnout on election day 2010–then the Republicans will have won regardless of who goes to Washington 13 months from now as the latest junior Senator from Colorado.