I know, I know, it's dizzying, the “transition team” news swirling about now. Someone's going to be taking a position in the Obama team, then they're not, then they are again, there's a lot of Clinton-era hacks returning to the fold (what a change!), etc. There's also some good news in there, such as that Obama might actually pick a real environmentalist to run the EPA. Can't complain about that one.

Now, there's a lot of rumors, and I suspect some are based in fact, some are perhaps “testing the waters” and some are complete b.s. Matt Stoller at Open Left has been keeping his eye on one of the rumours, that of Larry Summers as Treasury Secretary. Not good.

Stoller:

Summers was one of the key proponents of the banking deregulation of 1999 that led to the current financial crisis.  In addition, Larry Summers has argued that women are innately less gifted in science than men, that 'Africa is Underpolluted', that child sweatshop work in Asia is sometimes justified, and that job destroying trade agreements are good for America.

People get stuff wrong all the time.  That's not bad.  But if you got the big stuff wrong, repeatedly, while being warned against it, you shouldn't be rewarded with a promotion.

And then there's this:

More important is Summers' close relationship with (some would say protection of) Andrei Schleifer. Schleifer is another brilliant economist who seemed to think that his brilliance allowed him trade tens of millions of dollars of Russian stocks while directing the pace and direction of Russian privatization. The US government sued Schleifer and Harvard University (where Schleifer holds a professorship and which held the USAID contract under which Schleifer worked) for fraud. Harvard settled the lawsuit and paid several million dollars to the government.

And who was President of Harvard when the university decided to settle the lawsuit? Larry Summers. It is not unreasonable speculation that Harvard settled the lawsuit the way it did in order to protect the friend of the President. It's also not unreasonable to suggest that this, not anything about public statements, was the cause of Summers' downfall from the Harvard Presidency.

And Matt just put up a recently-obtained very friendly letter from Summers to Enron's Ken Lay, too.

Now, Matt started a petition drive to the Obama transition team here in regards to saying no to Summers. I never have figured out if those things make a difference but what the hell, it can't hurt. We know Obama can talk the talk. But as James Brown's late guitarist, Bobby Byrd once sang, “Sayin' and doin' it are two different things.” He needs to walk the walk on this 'change' stuff. Some of us are actually paying attention to something besides the rhetoric.

Now, I know these things are rumours, there may be nothing to it at all. But it may also be a trial balloon, and if it is, it's important to hold the Obama team's feet to the flames and pop that balloon. Crushing the right wing was only the beginning of the hard work. There's still the corporate wing of the Democratic party to be reckoned with, and that's a bit more difficult.

There's a silly poll for you below the jump.

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Just a quick blurb to let you all know that Odum and Prog representative David Zuckerman will be on Vermont Edition on VPR today at noon today (Thursday) to discuss the Prog/Dem conundrum that we’ve been discussing on here of late and has been made even more obvious after this election. Tune in.

UPDATE: The podcast is up at vpr.net.

I know many of us are feeling pretty good right now, here's a bit of funny for you from the Borowitz Report:

Just minutes after their party's longstanding losing tradition lay in tatters on the ground, millions of shell-shocked Democrats stared at their television screens in disbelief, asking themselves what went right.
For Democrats, who have become accustomed to their party blowing an election even when it seemed like a sure thing, Tuesday night's results were a bitter pill to swallow.

The head-shaking and finger-pointing over the demise of the Democrats' losing streak, which many of the party faithful had worn like a badge of honor, reached all the way to the upper echelons of the Democratic National Committee.

"Believe me, I'm as shocked by these results as anybody," said DNC chief Howard Dean, who indicated he has received hundreds of calls from incredulous party members.  "We did everything in our power to screw this thing up."

Dean pointed to several key elements the Democrats put in place to ensure defeat, ranging from "a rancorous primary campaign" to "the appointment of me."

"Somehow, despite our best efforts to snatch defeat from the jaws of victory, we won," he said.  "I came in here with a mandate to blow this thing and I didn't get it done."

Eh, this could just be a coincidence, I certainly hope so. My friend, who has AOL for internet, says when you log in , there's always an ASCII artwork thingie on your welcome page. When she got up this morning to read about the good Obama news, what was it this time?

From the Fox News website:

You can just smell the voter fraud, can’t you?

Something NOT about the guv's race…

There's been so much to digest and enjoy with the ever-expanding rightwing implosion. So many of us have waited so long for this, it's still “pinch me, I must be dreaming” for me sometimes. What makes it even better is the fact that for many of them, they seem to be completely incapable of any serious self-criticism or introspection… the dominating lizard brain simply seems to not allow it.

Many of the so-called “intellectuals” (who, I might point out, like Brooks, Noonan, and such are still consistently wrong on most things, but are at least able to use something more than monosyllabic words and grunting to communicate) are, if not jumping ship completely, seriously lamenting how the GOP has completely been taken over by the anti-intellectual fringe, those who have elevated ignorance and incompetence into signs of personal virtue. Christopher Buckley, son of Bill, founder of the con rag National Review, is actually voting for Obama now becuse the kooks have thoroughly taken over the party.

And it's going to get worse (actually better, from where most of us are standing).

It's been the conventional wisdom that when a party/faction loses as big as the GOP is expected to, they often lurch further to their extreme before settling into things. We're seeing this already. Just poke around the net, far and near, you'll read how McCain is losing because he's just “not conservative enough' or some other blather that is based on the erroneous assumption that we are not just a conservative nation, but a batshit-insane conservative one. If they had only cut more programs, bombed more countries, discriminated against more people, cut capital gains taxes more, if only… You get the point. It's ridiculous. They don't get it.

So I've been seeing a lot of articles like this one, and I get all giddy: Social Conservatives Fight for Control of Republican Party. They really don't seem to understand that humanity and society changes. It's why we don't burn witches anymore or think the sun revolves around the earth or that the earth is only 5-10 thousand years old (oops.. scratch that last one.. we're talking about social conservatives here). Young people, especially, who have gay friends and friends of every color seriously won't resonate with the messaging; they're more likely to be repulsed by it, actually. And so it goes:

In skirmishes around the country in recent months, evangelicals and others who believe Republicans have been too timid in fighting abortion, gay marriage and illegal immigration have won election to the party's national committee, in preparation for a fight over the direction and leadership of the party.

I'm surprised none of 'em have tried to blame the financial meltdown on gays getting married. I'm sure it's coming.

But, what's been really taking me to previously unknown peaks of giddiness is the ones like this that  I've been reading:Win or Lose, Many See Palin as Future of the Party. That's all fine and dandy, as it is ensuring the GOP remains a marginalized, fringe party for some time to come.

“She’s dynamite,” said Morton C. Blackwell, who was President Ronald Reagan’s liaison to the conservative movement. Mr. Blackwell described vying to get close to Ms. Palin at a fund-raiser in Virginia, lamenting that he could get only within four feet.

“I made a major effort to position myself at this reception,” he said, adding that he is eager to sit down with her after the election to discuss the future. Asked if the weeks of unflattering revelations and damaging interviews had tarnished her among conservatives, he replied, “Not a bit.”

Of course not. She's idiotic, corrupt, and incompetent, and she believes in the vengeful nasty God who protects her from witchcraft, hates gays, and cares more about the unborn than the already born (bomb 'em! starve 'em!), so she's exactly what the base is looking for. Let them groom her, get her to pronounce big words and learn where Moscow is. Maybe they can actually get her to read some books without pictures, too. I can't remember the article, but it was similar, and some spokesperson said something along the lines of, “People saw some interviews, and the reporters made it seem like Palin was really dumb”. Did you get that? It wasn't what she said that made us think she was dumb, it was the reporters telling us that made us think that. Okay.

Now, I don't even think she'd win the primary, because although they talk this stuff now, after four years of Democratic dominance, you'd think they'd catch on and not try to cast their campaigns as “the war on thinking”. Maybe the fear of an imminent attack by an Arabic gay army weilding aborted fetuses and mochachinos will shock them into a change in direction. Probably not. And if the Dems actually have some measure of success, forget about it.

It's really an epidemic, as Monibot's latest in the Guardian points out:

Ignorant politicians are elected by ignorant people. US education, like the US health system, is notorious for its failures. In the most powerful nation on earth, one adult in five believes the sun revolves round the earth; only 26% accept that evolution takes place by means of natural selection; two-thirds of young adults are unable to find Iraq on a map; two-thirds of US voters cannot name the three branches of government; the maths skills of 15-year-olds in the US are ranked 24th out of the 29 countries of the OECD. But this merely extends the mystery: how did so many US citizens become so stupid, and so suspicious of intelligence?

One theme is both familiar and clear: religion – in particular fundamentalist religion – makes you stupid. The US is the only rich country in which Christian fundamentalism is vast and growing.

There's a whole lotta stupid in this country, and Palin personifies that like no other mainstream candidate has before. So there is both sadness and joy in this. Sadness, in that it does a lot of damage to this country. Just look at the last 8 years. But there is also a joy in knowing that, since much of the success the GOP has had is due to this same anti-intellectualism, that they're not going to just cast it away any time soon. You betcha!

When I went to the Welch interview two weeks ago, I had a handful of questions, many of which I didn't get time to get to, a few from other FP'ers. I had a few given to me about nuclear energy, which I emailed and got a response from Peter. I'm going just go ahead and print the questions as posed, as well as the answers. Below the fold.

The questions:

Nuclear Power Plant Decommissioning Trust Funds now account for more than Three Trillion dollars nationally.  Given what is happening here in Vermont, as well as the collapse of the stock  market, would you consider holding Congressional hearings on the national implications of the investment of these funds and the proper assessment of decommissioning itself?

Peter, as a lawyer, do you think that Vermont Yankee should be owned by a limited liability corporation?  Are you in favor of the spinoff to Enexus, a limited liability Corporation with $4.5 Billion dollars in debt and junk bond rating by Reuters?

During the purchase of Vermont Yankee by Entergy (2002), you were President Pro Tem of the VT Senate.  Knowing what you know now about the Decommissioning Fund Gap and the current market conditions, would you have done anything differently to guarantee the safety of the Decommissioning Fund?  For example, making contributions from Entergy to the decommissioning fund a mandatory condition of the sale and/or requiring that the Decommissioning Fund remain in the State of Vermont, where it originally was located?

The answers: 

A deal is a deal. The nuclear power companies have agreed to bear the cost of decommissioning. They should honor that obligation, not outsource it to the ratepayers and taxpayers who, in effect, have already paid this in their monthly bills. The Vermont legislature is the defender of the rate payer and the taxpayer. Any proposal by Entergy that would, directly or indirectly, alter its current obligation to pay the costs of decommissioning should be scrutinized carefully to protect the taxpayer and rate payer from bearing what is Entergy's obligation. Entergy also must bear the consequences of its own investment decisions, not reserve the upside to itself and offload the downside to the ratepayer.

I was not President Pro Tem in 2002. I was in 2003-2006 when Vermont passed the most progressive states right initiative to give citizens a say in the future of nuclear power. Vermont is the only state in the nation where the General Assembly has the right to vote up or down on the extension of an existing license application for a nuclear facility located within its borders.

This is the final part of my interview with Peter Welch last Friday.

JD: Now, speaking of challenges, you're fortunate this year not to have a challenge from the right. You said in the Argus/Herald article that might be because people are happy with what you're doing. There's also the reality that they're [the GOP] are in a lot of trouble right now and you're in pretty safe territory, so they have to focus their resources elsewhere. You have a challenge from the left, which I always think is a good idea. Thomas Hermann, running as a Progressive. I was up late last night…

PW: He's working hard, he's a very good guy.

JD: I got the same impression. So, I was up late last night looking into a lot of this, what he says about your record. Iraq, we're going to talk about that, now. He mentions two votes in particular of yours…

PW: Yes, he… this is the Jimmy Leas attack.

JD: I read about this… H.R. 2206. That was the one you originally voted for, when it had the withdrawal timetable but he failed to mention in the article that you voted against it when it came back from the Senate without the timetable.

PW: Yeah, it' s flat out wrong. I've said that I'll use the power of the purse, and I'll support legislation that had a specific objective of bringing the troops home, and that… First of all, the sequence of that is wrong. That's Jimmy, in a way. And everyone is absolutely welcome to challenge my record, but not distort it. Step one, that's what this was, and this was a high point in which Vermont was prominent in fighting back on the war.

JD: And this was in May of 2007, right?

PW: Right. Jim McGovern from Massachusetts – I serve with him on the Rules Committee. He and I sponsored an amendment – and he's close to Pelosi, more than me – but this was our amendment, and we got this agreement from her to put this up for a full vote in the House. And this was a bill that would have required having our troops home, I believe, within six months, I'll have to check it. But it was a date certain to bring our troops home. It's the first time we had a vote to bring our troops home in the five years of the war, it got 171 votes, I believe. It failed, but we got 171 votes. That was me sponsoring it. So, the next vote was on the funding, but it had the timetable in there, okay, of bringing our troops home by a date certain. I voted for that, but that's consistent with what I said I would do, you know. It had the timetable. That passed the House, goes to the Senate, the Senate strips out the timetable, brings it back, and I voted against it. That's the story.

JD: H.J 52? The other one.

PW: Yes, the continuing resolution.

JD: Now, Senator Russ Feingold said in particular about this, “We're about to vote on a continuing resolution that contains tens of billions of dollars to continue the misguided war without a timeline.”

PW: That's simply not right. First of all, you know that all of the war funding bills were supplemental appropriation bills. And this is yet another thing for which George Bush should be condemned. It was on the credit card. So, the funding for the war never went into the defense bill. The funding bill went on a supplemental appropriations bill for war funding. So all of the war funding was in separate supplemental bills. This bill was a continuing resolution to keep the lights on in government for six weeks.

Now, some people have apparently argued, well, if you keep the lights on, it keeps the war going. And I'll let the people decide whether that's it, but the bottom line is that i means Walter Reed shuts down, it means soldiers that are getting health care for their treatments don't get it, it means Social Security checks don't go out, and so on.

JD: But that did contain money for continuing combat operations, correct?

PW: No, the argument that the proponents have made is that by allowing the Pentagon to have money along with the VA, with the hot lunches, along with Walter Reed, that money was, quote, “fungible”, so they could move it around. So, we could argue about that, but the point is that fundamentally it was about appropriation or every single thing government does, from hot lunch, to the highways, to our hospitals, to the VA.

And, it may be, I mean, a fair argument that somebody could make is that their position is that we should just shut down all of government. I mean, that's the straight-out argument. Not just cut off pentagon funding for the war, literally shut down government.

JD: That worked really well for Newt Gingrich, right?

PW: So that's the honest argument that somebody could make. And they could say, “Peter, you voted to continue funding for hot lunch and veteran's programs and you shouldn't have. That's the argument they're trying to make there.

JD: But couldn't you say they could have made the argument that also said that a better resolution should have come back for you to vote on, that was more specific about the funding?

PW: Well, you know the answer to that is always theoretically possible, okay? I mean, it always is. There's never anything I've voted on in Montpelier or Washington that didn't have plenty of room for improvement. So the question is, did I fight for things that were better? Did I use the power that I have as one of 435? And, was there any more room or were you at the end of the rope? So that's it. It's kind of a convenient argument that you could always make, but there's nothing you can ever pass that will be, quote, “perfect”.

I mean, what's amazing about this is that the war, the folks who are watching this, who have spent their lives these past six years trying to bring this war to an end and get congressional support, they're in a sense nonpartisan and very critical of what we do in Congress, rate me 100%. I've got an A rating from the progressive blogs, the middle-class blogs, so, you know it's hard to see… there's nobody who's done more.

JD: Well, then let's talk about the anger. I was at that meeting in Barre last winter [Peter's meeting last year with anti-war activists]. What were you thinking as you were going in there?

PW: Well, here's what I thought. I thought that, and I've always thought this, it's a big reason why I went. I share the fury about the war. Bush lied to us about the weapons of mass destruction. It's made us weaker, I mean all of the things that have made this so terrible, paying for it on the credit card, and Vermonters are really angry. They also had a lot of hope in that election two years ago, that by changing their congressional… going from Republican to Democrat, that we'd be able to end it. So there was an immense amount of frustration. A lot of us in the House had frustration. I voted on the timetables and sponsored the first bill to bring our troops home. So I shared the fury.

You know, the practical problem we run into is the Senate, so can have a House with a working majority, you have the votes to get the troops home, it gets to the Senate, and you don't have the votes to do it. Even when we got advisory language to the President, he vetoed it, and we didn't have the votes in the Senate to overcome it. So, I can see why people are really, really frustrated. And the challenge for all of us in politics, and in life, is to do the best we can, to channel that frustration.

JD: But did you come out of that meeting feeling any different about anything?

PW: [pauses for a moment] Well, see, I went in as somebody totally opposed to the war, and who's committed to doing everything I could with my one vote, every day I could, to try to bring that to an end sooner, rather than later. And that meeting, I think, really had a couple of different things going on. I mean, there were some people there who just basically had come, they wanted to show me up, and tear me down, and it didn't matter. There was no willingness to have a dialog, no willingness to let me listen to them and then actually explain what I was doing, why, and how. And as you may remember, I made it clear to folks there that I would stay as long as they wanted and answer any question that anyone wanted to ask me. I feel that's my responsibility,and I was willing to do that. But there were some people that wanted to turn it into some kind of a show trial.

There were an awful lot of other people there, frankly, who wanted to have a discussion about the war, what's going on, what to do about it. They might want to ask me questions about what I did and why I did it, maybe answer some of the questions the organizers asked of me. So it was a mixed group who was there, you know?

JD: You know, it seems that a lot of antiwar activists really just feel like “no means no”, meaning they want a hardline position on this. Not just “voting for funding if there's a timetable”, meaning “no money for the war, period.” What would you say to them? You see, I think what part of it is… I talked on the radio, WKVT, shortly after the meeting, and I said that part of what makes it different about Vermont, being as liberal as we are and definitely one of the most antiwar states in the country, is that it think that some people expect more, a more vocal, leadership role from you than…

PW: Well, I think that might be right. You know, my goal is to bring that war to an end, as soon as we possibly can. And, sometimes it's a judgment call as to what step you can take that will do the most to advance that cause.

JD: A difference in tactics is what you're saying?

PW: Well, see, I think, to accomplish any goal… I find that in politics, its often exciting and it's often very hard. You might get a group of people together that are really committed to the goal of universal healthcare. We want that. Everyone of us in our soul really wants that. But when you get to the actual implementation of it those same people who share that goal and that passion might have honest differences of opinion about what's the best next move? Some people might say, “Let's propose single payer.” Others might say, “Let's do a petition drive.” Others might say, “Let's do a demonstration in front of the hospital.” And who knows who's right?

This is what I get from the civil rights movement. When I started working in Chicago, we were working on housing, and the issue there is that poor people lived in neighborhoods that were redlined, so no matter how good their job, they couldn't get a mortgage. Fast forward to 2007, the Lehman Bros. hired mortgage originators to go into those neighborhoods to sell loans to people that could never afford them, because they were poor, and they could talk them into it, and they didn't care. It's still victimization and predation, in case by giving money, in another by withholding money.

JD: But don't you think there's something to be said for personal responsibility, as well?

PW: There's an element of that. I believe there's a lot to be said for personal responsibility. But just to go back to your question, I remember the hardest parts of the work that I was doing, you know, ultimately we ended up doing this payment strike to try to get some justice, really, for these families.

But we had fierce debates among ourselves whether we should be doing leafleting out in a suburb where one of these real estate speculators lived. What would be the backlash? How would that affect us? We had debates about whether we should picket in front of the Federal Savings and Loan. Should we picket in front of Continental Bank? And, it was an assessment about how that tactic would work. Would it set us back? Would it result in too much backlash? I mean, all these practical questions that you can't escape if you're honestly trying to be responsible to achieve a goal, whether it be the case of us in Chicago to get civil rights for folks who were denied them, or if it's in Congress, in trying to bring this war to an end as soon as humanly possible.

And I find that to some extent, we sometimes take refuge in a tactic because it gives us a certainty that it will work, it gives us the satisfaction that we're being on the high ground, and I find life to be much more complicated than that.

JD: It's empowering. It's definitely empowering, and that's something that I wanted to ask you. You've had sit-ins in your office, things like that, there were protests out in Denver, much more out in St. Paul.. in terms of some of the traditional methods of protest and civil disobedience, do you feel they have the same relevance that they did thirty or forty years ago?

PW: No, I don't, and I think it's totally different. You know, I serve with John Lewis. And in those early civil rights days, the folks who demonstrated, black and white, put themselves in danger of getting killed. Literally. Beaten up. Maimed. And the harm's way they put themselves in was real. It was somebody like John Lewis who we see every day was beaten to the brink of death. He sat in, time and again, to integrate a lunch counter. And that's simply not the case now.

JD: What's… there's still the risk of getting beaten or killed. St. Paul showed us that. I'm not sure what you're saying. The danger element of it is still there.

PW: Well, I wouldn't compare it to the folks who were in the early 60's, and I don't include myself in that, by the way. I did some demonstrating but I wasn't like some of the Freedom Riders. I mean, it's fundamentally different. It's not without risk, and I respect that.

JD: Do you think it still has a place?

PW: Sure. Yeah, I do.

JD: Now, how does.. you and your colleagues. How does it affect you? What are the various reactions you get to that when you see it? It doesn't get the media coverage that it used to.

PW: Well, I frequently will talk to people. I mean, I want to hear them. I respect activism. I respect people who are willing to make an effort to change things. I might disagree with their tactic, whether I was in public office or not. I would sometimes disagree with that decision for a particular action or not but sometimes I'd agree with it.

Obviously, in politics, it's really important to mobilize and organize. So that, I respect, and I respect speaking out in public ways to get attention. But the “how to” so you're successful in making your point and not having it hijacked by others to make a different point, that's a matter of judgment, and some people have better judgment than others.

JD: Is it about fighting or winning? I look at that and I think that question tends to get overlooked when considering tactics.

PW: Yes, I think the goal of our efforts has to be to make progress. You know, winning is a bigger term than I'm used to in politics, or in life, frankly. It just, you know, is such a dynamic, this world we live in, and our own lives, they are so dynamic, and it's not like we get to a place where we have a static equilibrium or we're perfect, in our own world. All of us have our limitations and we're aware of them and it's this society, we have our limitations as well. And I think there's this big place in politics and in life, for tolerance and respect. I really believe that. You know, I do my best, but I never assume that I'm absolutely right. I also found that focusing on what the goal is, and not some specific tactic often creates space for people to feel successful, to get there sooner, rather than later.

JD: Okay, can I have one more quick question?

[voice in the background – “Is it yes or no?]

JD: If there's one thing you have to say if you look back over these last two years that you might have done differently, what would it be? Especially in light of what you just said… Something you could have done differently legislatively, a way you could have handled a certain issue, the way you conveyed a certain message…What would you have to say you would have done differently?

PW: I'll have to think about that. You know, my goal was to be engaged and listening. Open, and accessible. I think my job is to do the best I can to be a means by which Vermonters can participate in this discussion about the future. And one of the things I'm really proud of is the “Congress in Your Communities” stuff, just about every weekend. It's just about talking to folks on their terms and on their time. And a lot of the best legislation. I guess I've passed more legislation than any new member, like 55 members, by factor of a lot. In significant stuff, not naming a highway or something. A lot of those ideas, like the Strategic Petroleum Reserve, Rutland.. the hospitals that were going to get whacked, those came directly from me talking to people in the street. They gave me these ideas, I translated them into legislative-speak. The milk program, where on the House side, we made a lot of progress, Senator Leahy was obviously incredibly important in this, but the feed adjuster, respect for the cost side… all of these things emerged because I was talking and listening to Vermonters.

JD: But is there something you could have done differently?

PW: Well, I'm sure there is. I don't look back on any votes with regret, okay. Could I have explained things a bit better? Probably at times, I could. I'm very proud of my record on the war, and even on this economic issue, there are times where you've got to reach into you own soul, and come to your best judgment about that's the right vote. And in my case around the war and on the economy, where it affects average, hard-working Vermonters, my strong desire is to make the call in an honest way, the best I see it, and to deal with the political fallout afterwards. It's a great job.

JD: Okay. Thanks, Peter.

PW: Thanks, JD.

***

So, that's that. I had a few nuclear-related questions for Peter that I didn't get to, but he emailed me some answers. I'll put those up in a post next week. Thanks for reading and your comments, too.

Here's the second part of last Friday's interview I had with Peter Welch. Part 3 will be out Friday.

JD: It seems that as one looks at the political struggles through history, there always seems to be some sort of tipping point. There's this conventional wisdom that we've had to deal with since Reagan, at least, the whole “government is always the enemy” thing. Do you see – there's this thing, I like to call it “free market fundamentalism” in that it's completely faith-based…

PW: That's a great phrase… They've totally, completely, and utterly failed. Those free-market fundamentalists are now coming hat in hand to the government.

JD: Yeah, like a corporate socialism…

PW: …asking to be rescued.

JD: Any time it seems we look at any regulation, it's “Wahh!!! Free market, free market!” How do you see this changing the game, if we have, well, a Democratic President, huge majorities.. are we getting to a situation where you can finally throw this up in their face, and say, “No, there is no free market like that anymore”? Does this give you the leverage that you need, are you even thinking about that at this point?

PW: I am thinking about it. I'm thinking about it a lot. You know, the American people are going to make a big decision this year, and I think a major part of it will be to choose to have a government that's much more activist and on the side of smaller business and average Americans. And that requires an activist role for government, one that's been rejected.

Here's an example. You know, I'm in these oversight hearings, you know these trillions of dollars on derivatives? All of these securities… trillions of dollars of business. You know how many people we had in the enforcement follow-up division of the SEC? One under George Bush. One person. Okay? On the Consumer Product Safety Commission? You may remember that story about the Chinese toys? Lead paint? Millions and millions of toys being imported here, and they're subject to inspection. You know how many inspectors we have in that organization?

JD: One?

PW: One. Bush had contempt, utter contempt for government. He didn't care about being competent, as we saw with Katrina. He actually wasn't even willing to be competent about policies he cares about, like the war.

JD: As I was listening to him speak today, I kept thinking, “This guy is so in over his head, it's not even funny.”

PW: Yes. So, we've gotta restore that and revive it. We have to have consumer protections, in protecting us against bad products, protecting us from the predatory conduct of Wall Street, protecting us against the unbridled arbitrary power of the credit card companies. One thing after another requires and activist response and I believe the American people are seeing the price of a free check.

JD: That leads me kind of where I wanted to go next, and that's… when I was out in Denver, I spent a day down at Civic Center Park where the protests were going on… did you read the book that Markos [Moulitsas, founder of Daily Kos] gave you [Taking on the System]?

PW: I started to, it's amazing, actually.

JD: One thing in it that made sense to me… he talked about how some protest methods are a bit outmoded or outdated in today's environment, and I've always thought, in today's day and age, where we've been fighting this conservative infrastructure that's been in place since, I dunno, Goldwater? Watergate? You know, the Heritage Foundation and those other right-wing think tanks, that we're in a war of information and ideas, more than anything else. Controlling the narrative.

PW: Right.

JD: And we're fighting this entrenched idea, and by no means do I believe all Americans believe this, but this entrenched idea that you know, you're on your own, you know what I mean? And the frustration and the cynicism is likened to battered wife syndrome with the Democrats.

I'm looking for your thoughts on this… it seems like even since the Dems have taken over the House, you know, we've gotten the FISA capitulation, the war's still going on, we didn't get the renewal on the ban on offshore drilling, Leahy came in there in 2006 saying “Bush should be terrified!”, and Bush doesn't exactly look like he's shakin' in his drawers about anything, because he just ignores the rule of law, and there's little, if any, follow-up.

I'm just curious, how, we have a President who, I often like to say is about as popular as a spring-thaw dog turd on a warm late March Vermont morning, and what we just don't understand, especially those of us not in the Democratic Party but definitely on the left end of the spectrum, is time and time again, this letdown. Again and again. It usually starts out with Pelosi saying something really tough and strong, ant then it gets watered down more and more. The Republicans have been effective, simply by sticking to their guns. Maybe it's a lot harder to get liberals to all agree on something, and I think there's something to that, but what is it that keeps the Democrats from playing that hardball consistently?

PW: Well, I think it's two things. First of all, the Republican philosophy, the Washington Republican philosophy has been to basically to tear down government, okay, under the guise of talking about the individual, but do everything that helps the powerful individuals.

JD: But they wrap it up in a little mantle of populism.

PW: They wrapped it up like that, yeah. And so, they're anti-government, anti-tax, anti-regulation, and there's a certain simplicity and appeal to that. The reality is none of us like being regulated. The bloggers don't like it. It's a very diffuse process. So there's a lot to not like about it, especially when government can obviously overregulate, or it can overtax, so there's been a simplicity. And then, when the economy's been juiced up on the steroids of this credit bubble, then it can look like things are going fine. So shareholders who see their IRA's are going up don't get that upset about what's going on with some corporate executive ripoff pay. But we are now seeing the inevitable consequence of this “you're on your own” approach, with hollowing out of government and deregulation, so I think people have a different point of view on it now. I think the challenge for the Democrats is to focus on practical economic policies to start helping them.

The other thing that's tough is, of course, the way our government works under the Constitution. It's a very conservative document, the Constitution, because it makes accomplishing something extremely hard. So in the House, we actually have a working majority. And leaving FISA aside for a moment, I'll come back to that, on the economic agenda, you know, we've passed pretty progressive legislation. We've passed legislation to get rid of tax breaks for the oil companies, but it dies in the Senate. Passed economic stimulus, dies in the Senate. We passed price negotiation on prescription drugs, dies in the Senate. We rolled back these special premiums for the insurance companies on these Medicare advantage programs, dies in the Senate.

So, a lot of people who are citizens look at this and say “What's Washington doing?” They don't say “What's the House doing?” or “What's Peter doing?” They say “They're all the same”. So that's just something that I have to labor under, but the Senate doesn't have a rules committee, and they have a filibuster, so it's very slow to move and conservative, and the President's got the veto power.

JD: But still, maybe this might change, but I've had this feeling over the last two years that the Republicans are still in charge of things, and I'm not alone in that sentiment. The blogger Atrios recently said something that was kinda snarky the other day, “The Democrats sucked as a minority party. They suck even more as a majority party.”, and I think there's a lot of people that can relate to that.

PW: Sure.

JD: Because, it's still, even though Bush is sitting there with his deer-in-the-headlights look, to many of us, it doesn't feel like the Dems are running the show. The Republicans are still calling the shots. I mean, the Jay Rockefeller thing, with FISA, again. I mean, you have something in the Senate, the GOP stomps their feet, and it gets stopped. And I know, you're not in the Senate, but in general, there seems to be this timidity that our side seems to have that the Republicans don't. I think a lot of people, even without party affiliation want to support Democrats, but they see that, and…

PW: Well, I understand that, and a lot of times people will express to me their frustration with what's happened and I'll sit down and explain what I've done, and they're okay with that. And I share the frustration with them that it dies in the Senate, but when you have a filibuster that's been institutionalized so you don't even have to go through the ordeal of standing up and debating until you fall asleep… Any Senator can say they're going to filibuster, and it takes 60 votes to overcome that.

You know, a lot of us on the House side really wish that the Senate would really make someone who says they're gonna filibuster, actually make 'em do it. Make 'em stand up there for three or four days.

JD: Can they?

PW: Yes, that's the Senate.

JD: Well, then why don't they?

PW: I don't have the answer to that question. I mean, you gotta ask the Senators that.

JD: Personal hunch? Gut feeling?

PW: I really don't know. I mean, on the House side… You know we got great Senators, with Bernie and Patrick, but the institution is very, very slow. And on the House side, there's often frustration that our legislation doesn't even get taken up. The filibuster's a rule. It's not a Constitutional provision. In the Senate, it's amazing. You know, in the House, if somebody wants to propose an amendment, they have to get permission from the Rules Committee. And it's got to be germane, in other words, it's got to be relevant to the particular bill, so if it's a highway bill, you can't come in with an amendment on healthcare, let's say. It's got to be related to the highway project.

Well, I favor that, because it allows you to get work done. And it allows, I think, voters to have more accountability, because when I vote, there's much more clarity on what I'm voting on. It's more specific, so you get to know, yes or no, where I stand on that.

JD: Yes or no?

PW: Yes or no, yea or nay.

JD: Yes or no?

(laughter in the background)

JD: I was making a reference about your meeting in Barre last winter. We'll get to that in a bit.

PW: Oh, right….thanks. That's funny.

But in the Senate, any Senator can put a hold on the bill, any Senator can make as many amendments as they want on any bill, and they can make them on any subject, so if they want to make a healthcare amendment on a highway bill, they can do it. It's the rules.

JD: And the House doesn't have this..

PW: Free-for-all…

JD: …this mechanism to just bring things to a grinding halt if they wanted to.

PW: That's right, and I actually think that the majority has to rule, and people have to get some clarity about where we stand as individual legislators on the major questions of the day, and if they don't like what the House or Senate is doing, they can replace the members.

JD: Let's talk for a minute about the bipartisanship that we hear tossed around so much. When I look at the extremists that control the Republican party right now, I don't really want to compromise with them. I know there's the reality of the numbers and everything like that, but it seems so often that instead of, especially on things not of massive urgency, like FISA…we could have let the provisions expire.

PW: Fine with me, as you know.

JD: Exactly. And, I'm just kind of at a loss, with the messaging,and the feigned outrage of the Republicans, they're the master of the feigned outrage. They'll get out when something goes down, they'll have a press conference, next thing you know, it's all over the news. We're seeing it a little more but we're generally not seeing that kind of thing coming from the other side of the aisle, and there's a lot of frustration out there because of it.

PW: For me, it's about, “How do you get things done?” So, if I can work with somebody to get something done, I do. It's that simple. You know, I actually reached out to some Republicans to try to get them to agree to my stabilization fund on the bailout. The Republicans came up with this so-called “insurance plan” that was not workable, because they didn't have a way to pay for it. But the idea of it was similar to my notion of the stabilization fund paid for by the financial services industry to get us through this crisis. So I went over to some Republicans, and I said, “Look, this idea is really very similar in concept to the insurance proposal, whadya think?”

And I got a lot of them who were quite interested. Now, ultimately it was unsuccessful because by this point it was totally politicized and even if some members wanted to work with me, their leadership wanted a different agenda. So, for me, it's a pragmatic thing, just like it would be if, you know, I lived in a town and we're trying to figure out how to get uniforms for the kids on the baseball team, and here's a bunch of parents with different points of view, but you want to solve a problem, so you work with people on the same page to get things done.

JD: But do you think…I remember early on, one of the big criticisms of Obama being the “kumbaya candidate” and all that stuff… Issues like single-payer healthcare, for example. I don't know of too many Republicans that are going to support something like that.

PW: No.

JD: Well, how do you sit at the table with those people, then? Do you reach a point where their ideas are so antithetical to progress that… how do you do that?

PW: Well, there were a lot of people in the Vermont legislature and there are a lot of people in Congress who I just never get to common ground with. But, it's a case-by-case situation.

Down in Washington, there's been a lot of, like your phrase, free-market fundamentalism, and it just gets in the way of making any practical progress. Folks that believe that are against any solution that includes government. And, obviously, there's not much common ground there, so for me it's kind of a case-by-case kind of approach, you know? And it's really about – take your issue, like on regulation: I really think we have to be regulating the financial services industry. I think we should be putting much more limits on credit card companies and what they can do. Well, if somebody starts out and is flat out against doing anything, well, there's just no common ground. On the other hand, if they have some concrete proposals, and they say, “you know, the way you're doing this, can we do it this way? And here's why.” I listen to that. And if there's some way to essentially achieve the underlying purpose that I set out, but in a way that's somewhat different, and that can get more support, there's some political benefit to doing that.

JD: The compromise.

PW: Well, there's a difference between compromising principles and compromising on tactics, or specific means by which you accomplish a given goal.

Last Friday, I sat down with Congressman Peter Welch in Burlington for about an hour. We had a conversation that touched upon the current financial mess, Democratic capitulation, Iraq and a few self-reflections. I'll be posting it throughout the next week or so.

JD: The bailout is what's on everybody's mind right now. It's funny, after you voted against the first bailout bill, and I mentioned to some people that I was meeting with you, they told me to tell him “nice job”, and after the second vote, I got a few emails saying “tell him I want to take that back!” It was obviously a difficult vote either way, if you read on GMD, odum kind of took you to task for it.

PW: Yes.

JD: You originally said in the article quoted in the Times Argus, “We're at the point that we have to choose, it's this bill or no bill – no bill is an absolute catastrophe.”, and, well, some of us see this as a false choice. And probably some of this comes from skepticism about the Bush administration, at this point how can you trust anything they say?

PW: Well, first of all, I don't trust anything they say. There was nothing in my final decision that was based on trusting George Bush at all.

JD: Do you trust Hank Paulson?

PW: It's not about trusting him; he's not the ideologue that Bush is, but my vote was not based on the credibility of Paulson. This – whether we like it or not, first of all, it's not surprising that this is happening. Many people who have said that is was reckless for us to allow such deregulation predicted at one point, we'd pay a price for it, because it was a house of cards.

You know, we had an economy that was built on credit, rather than an economy that was built on production, okay? So if you step back, a lot of people who were critical of the bailout, their criticism rightly goes back to the whole house of cards that was constructed and eventually, we didn't know when, it was just a question of when, not whether that house of cards would collapse. And so, I was not surprised.

Some folks raised this WMD question, that was a big deal, with Bush coming in, but there's a fundamental difference.

JD: When you refer to the WMD's, do you refer to the notion that Bush is basically –

PW: … making it up.

JD: Okay.

PW: But the reality of it is that these things were blowing up all around us – at AIG, Lehman Bros., Bear Sterns, Washington Mutual, Countrywide – Citibank losing 20 billion dollars, with these executives in there with these ripoff salaries and golden parachutes. The evidence of this financial meltdown was real, and these huge firms that made billions of dollars, in effect by running this speculative enterprise, were so excessive that they shot themselves in the head. Lehman Bros. Was borrowing at a 35 to 1 ratio, and as long as the housing market wsa going up, they were fine. Once it flattened and came down, they not only brought down a lot of innocent bondholders including an Arizona teacher's fund, a city in Norway, they destroyed their own business.

So, even the people who had a self-interest in having this continue, they were so reckless that they destroyed their own livelihood. So, I didn't need a lot of evidence that there was a problem, because it was hitting us in the face. What I needed, what was tough on this, there was two things. I was adamantly opposed to in the first bill that the president presented that was a three page bill, giving a total blank check, with literally no oversight and no taxpayer protection. Number two, a challenge and question for any of us, even those of us who have been harsh critics of deregulation, was what practical steps could we take to try to protect the taxpayers, Vermonters, Americans who did not participate in this reckless conduct but were going to suffer from the consequences.

The fact is, we're in uncharted territory, because of this credit crisis, and that's unique to this economic downturn that we have now.

JD: As I was doing some research about this, I came across a study pointed out by David Cay Johnston, a Pulitzer prize-winning economist, and he mentioned a study by the IMF and they studied 42 banking crises around the world in the last 37 years, and they concluded that bailouts usually don't work, and they often make things worse.

Do you feel like, in a sense, this is a big wager, a 700 billion dollar wager? I mean, how convinced are you that this is going to work, do you honestly just not know?

PW: We do not know. I mean, here's what I thought. Start with the beginning. I was convinced there was a crisis, and that the nature of this crisis was different than any other cyclical downturn we've had. In normal cyclical downturns, unemployment goes up, wages get depressed, tax revenues decline, and usually, since the Second World War, responded to that with stimulative economic activity. The government increases spending, you try to get the jobs programs going, to get consumer demand back up and unemployment down. We have that now. But what's so threatening, and so unique, in where we don't have the tools in the toolbox, is this credit squeeze. And that credit squeeze has happened because of deregulation, and creation of these exotic, basically casino bets collateralized debt obligations, credit deferred swaps, the mortgage-backed securities.

And, you know, in a way, it's important for me to explain the mortgage-backed security and how complicated it's gotten, because that gives people some perspective of how difficult the situation is that we're in. In the old days, if you were gonna buy a house, you'd go to your local banker, he'd check your credit, knows who you are, and he'd give you a loan, right?

In the new days, I'll give you an example of Lehman. They hire a mortgage origination firm, they go to neighborhoods that are often times low-income people, and persuade them to borrow far more money than they'll ever be able to pay back, and they reassure them it's no big deal, you can refinance, and your house price will be up, you know, 30 percent. So the mortgage originator gets you to sign a loan, so you borrow $300,000. Unlike your banker, he doesn't care whether you pay it back. Literally doesn't care. They make 2%, they make $6000 and walk away. They sell it to Lehman. Lehman then slices that loan up into thirty different pieces. They sell the first three years of repayment to, say, the New York Hedge Fund, the second three years to the Arizona Pension Fund, the next three years to the state employee's association, somewhere else.

JD: A big mess, basically.

PW: Exactly, and each time they slice it and dice it, they make a fee. They sell a huge chunk to the Bank of China. China is enormously invested in these mortgage-backed securities.

JD: They do seem to own a lot of us now –

PW: And, so it creates this incredibly complex problem once the real estate value goes down, because even if you default, you want to work something out, let's say you got laid off from your job or a pay cut,so you want to get a loan extension and work it out.. Well, you have to find the Bank of China, you've got thirty different people that own your loans. It's not like going down to the banker and asking to work something out.

What's also happened is lots of banks have these asset-backed securities on their balance sheet, and the reason the lending is drying up is because every bank is afraid to lend to another bank, fearing that while their money is over at the other bank, the regulators will come in a la Lehman and say “you're going into receivership” and the fear is that they're not going to get paid.

JD: Now that's where the nationalization of the banks come in. Thoughts on that?

PW: I actually prefer it to what we did, and we put in the legislation the authority for the Treasury secretary to do that. In other words, in looking at this, the initial reaction to the bailout is one of outrage, because the anger that Vermonters and Americans have towards the excesses on Wall Street is well-deserved. And my calls came in with people expressing that fury. But they also expressed some fear, because at the end of the day, our outrage is not a policy to get us out of this. And if we could wall this off, and say, “Well, this is Wall Street and those guys are getting what they deserve, let 'em go,” I would say “Absolutely.” But if what's happened there is coming here, and our job is to protect Vermonters as taxpayers and as folks with jobs, folks who are saving for their kids to go to college, then we have to ask the question, “What do we do?”

And, anyone who tells you they know exactly how to get their way out of this, they're kidding you, because this is a unique situation. Once we decided we had to act, my goal was to get the best possible bill, and we were a long way from the best possible bill. When that first one came up, there was a gun to our head, and the one thing I have from Vermont is the leverage of the vote they've given me. So I'm gonna use that to the last minute. And what I had been working to, to try to accomplish, some of it we got, some of it we didn't.

JD: What about the “NO BAILOUT” bill? The progressive caucus had that no bailout bill they were floating around.

PW: I favored that.

JD: You favored that?

PW: Yeah.

JD: Well, what were the realistic chances of something like that? Because I…

PW: They were zero.

JD: Because I noticed that Barbara Lee, Donna Edwards, they eventually all signed on to this one that passed.

PW: A lot of us were in the same boat. I mean, a lot of the most progressive members of the caucus did what I did. We fought to the last moment, for the best we could get, so we had to make a decision, yes or no, on the last legislation. And my judgment was that doing nothing would be even worse than the flawed bill.

And I'll you why. What got us here? What got us here was a hands-off, head-in-the-sand approach by government, acting as thought the government has no role in proper regulation that's necessary to protect consumers and businesses, okay?

JD: Like the Cato Institute was running the government or something.

PW: Exactly. So now we get to the inevitable consequence of deregulation, where Wall Street was allowed to run amok and they did. That says to me that we've got to act. And we have to act even though we don't necessarily get it perfect. We can't put our head in the sand and do nothing.

JD: In terms of the accountability, as I understand it , a chunk of the money is released right away, then there's another chunk that comes out at the discretion of the President?

PW: There's a lot of authority for the President.

Here's where the accountability is. First of all, let's be clear that i as a major decision for congress to authorize this bailout.

JD: But why not just 150 billion, and when they need more, to come back for approval again?

PW: I favored that. I was unsuccessful. Okay, there's a number of things that I thought would be much better,and a lot of my progressive friends fought for that we didn't get. One was bankruptcy protection. We need that because if we're going to unwind some of these loans, and you have 30 different borrowers, you really have to have the judicial process so there's some authority…

JD: So a judge can step in and renegotiate a rate…

PW: That's right. And tell people to go in a room and work it out, and if you don't, I'll settle it. Barney Frank worked hard for bankruptcy. We couldn't get it through the Senate.

JD: Where was the opposition? Republicans?

PW: The Senate. Yeah, Republicans.

JD: Democrats and Republicans, or mostly Republicans?

PW: Mostly Republicans, mostly the Senate. We couldn't get it through the Senate. Obama says he's for the bankruptcy provision. That'll make a big difference.

The second thing that I thought was really important that we didn't get, but I fought for, I mean, I was really a leader on this, was the stabilization fund. And I proposed to have a transaction fee on every stock transaction, .25 cents (note from JD – that's .25 of a cent, not 25 cents), that would raise 150 billion a year,and I was told they couldn't get that thought the Senate.

JD: What did you think of the Sanders amendment?

PW: I was fine with Bernie's bill, but I don't even think he got a recorded vote on it.

JD: No, it was a voice vote.

PW: Frankly, I prefer my approach on this, as I think we're going to have to have a tax increase on the high income folks who've gotten the break, to use that for health care and rebuilding our roads and bridges. What I wanted to do is much like deposit insurance at the local bank. If you have money there, it's insured. But that's paid for by a premium, a small premium on your deposit. Well, I wanted to fo a similar thing on the financial services industry, and have that be available to offset any taxpayer cost.

Now, I'm going to go back and fight for that again. Obama tells me that he's for it.

JD: Okay, it's a flawed bill. Do you think this is some sort of victory? A defeat? Neither?

PW: For me, it was a necessary step to begin the process.

JD: You don't feel good about it?

PW: I feel terrible about what's happening to our economy, and I don't make any claim that there's a magic bullet here. Just think about it. We're ten years into a system of deregulation and laissez-faire. It was wildly abused by Wall Street and the financial services industry, and no one believes that you can pass a single law that would suddenly unwind this mess.

But what we have to do is, number one, reassert the responsibility of government to work on behalf of the consumer and the average person.

JD: Okay, what ideas do you have in terms of going about that?

PW: Number one, we start reregulating again. And there were a lot of Democrats who went along with this, so I'm not here defending the party. Not at all. One thing was the refusal of Alan Greenspan and Robert Rubin to regulate derivatives. No one even knows what the heck they are, even Warren Buffett. Literally. But what they are is this huge web of debt relationships that are so obscure that no one knows who owes what to whom – the total amount of them is at least 62 trillion dollars.

There was a woman who was the head of the Commodity Futures Trading Commission in the 90's that tried to regulate 'em. Ed Markey in '92 tried to start regulating them. And bothe were solidly rebuffed by Alan Greenspan and Robert Rubin. They were wrong. Dead wrong.

Second was the decision by Christopher Cox of the SEC, a former Republican member of Congress, a big friend of the securities industry, and he was appointed by Bush to be the head of the SEC. He allowed these investment companies like Lehman to increase their ability to borrow from a ratio of 12 to 1 to 35-40 to 1. So what you had were these investment houses that were literally betting the house. For every dollar they'd put in a deal, they were borrowing 35. When the market was going up, they were really making a killing, but once it went down, they got clobbered.

JD: Okay, now, let's talk about Bob Rubin for a second. He's part of Obama's economic advisory team right now.

PW: Yeah, and that worries me. He did two things, you know. He opposed regulating derivatives. Wrong. Number two, at Citibank, he was on their investment committee, and Citibank lost billions of dollars in bad investments in these mortgage-backed securities,and it's astonishing to me.

JD: Have you talked to Obama about that at all?

PW: No, but if asked, I'd say that. I just think that somebody who was on the wrong side of this regulatory obligation we have is not somebody I'd give a lot of credibility to in working our way out of it.

****

Next up, the future of “free markets” and I ask Peter why the Dems cave in so often.