Posted by Mary Bottari on January 20, 2010

Massachusetts Attorney General Martha Coakley lost her special-election for the Senate seat vacated by the untimely passing of U.S. Senator Edward Kennedy. Much has been said about the role of health care reform in the race. Apparently everyone in Massachusetts has health care and reasonable doubts about an expensive national plan that might not improve their services.

But in the final days -- lagging in the polls -- the race was less about health care and more about the Wall Street bailout and the state of the economy. Her opponent, Scott Brown, successfully capitalized on the bailout blues and Coakley pulled out the big guns and resorted to a theme she perhaps should have emphasized throughout, bashing the big banks.

One of Coakley's final campaign ads was a clip from a speech of Obama's. "She took on Wall Street and recovered millions for Massachusetts taxpayers. She went after big insurance companies and took on predatory lenders," said the popular President. All this was true. Coakley has a unique track record on these issues. As Attorney General she recovered $77 million for municipalities across the Massachusetts Commonwealth from UBS, Morgan Stanley, Citibank, and Merrill Lynch under the False Claims Act. Coakley's cases were groundbreaking as they linked Wall Street directly to the subprime mess. The Wall Street Journal reported that her $60 million settlement with Goldman Sachs Group subprime mortgage abuses "marked the first time a U.S. investment bank was forced to pay for its role in the housing fiasco that kicked off the recession."

But Coakley waited until she was in deep trouble to aggressively play the Bankster card.

State Senator Scott Brown had never run statewide and was largely unknown in a state where he and his fellow Republicans represent only 15 percent of the Legislature. But Brown was a master at portraying himself as a man of the people. He drove a truck. He wrapped himself in the word "independent." He never used the word "Republican." And he repeatedly went after Washington for double-digit unemployment, bailouts, out-of-control spending and cronyism.

One Brown campaign ad features reams of cash being printed at the mint. The voiceover intones: "We need jobs now, not a Congress hell-bent on bankrupting America... We can end the bailouts, broken promises, and all the back room deals behind closed doors. Enough is enough." That last phrase is one often used by the progressive coalition National Peoples Action, which has rallied thousands in grassroots protests against the big banks, skyrocketing foreclosures and unfair bank bonuses.

Polling shows that public anger at the banks is so strong that it has moved from being a passing fad to being an "American value." And no wonder given that the banks are now reporting record profits and bonuses while the "real economy" is still suffering from the highest employment numbers in decades, historic foreclosure rates and no good news in sight. While many mainstream Democrats will see this election as a call to move to the middle, in truth Brown won because he was a charming guy running a competent campaign, and because he walked and talked like a populist, capitalizing on the anger and betrayal Americans feel about the Wall Street bailout and the still staggering economy.

Democrats ignore this message at their peril. They must pass meaningful financial services reform, reform that stirs up a Wall Street backlash, that truly puts an end to the high-stakes casino and prevents the next crash. Otherwise they will be tagged as friends of the special interests, just as Coakley was, and will also fall victim to the bailout blues.

Mary Bottari

Mary Bottari, CMD's Deputy Director, is an experienced policy wonk and consumer advocate who has served as a senior analyst on trade.

Comments

I do think this vote is also about "health care reform." In a Time magazine article, Schwarzenegger reported the proposed plan, which includes vastly expanding Medicaid, would add another $3-4 billion to California's budget annually for tax payers to handle. Our politicians are doing what so many now in housing foreclosure have done - pulling all the equity out of the property, or over leveraging the property, without planning for a rainy day. The administration's proposed Fiscal Year 2010 budget included a recommendation that health insurance reform be "paid for" by limiting the value of the mortgage interest deduction - a great way to stimulate the housing market??? The money will have to come from somewhere at some point in time, and guess who will pick up the tab.....

Yes the typical liberal rag is too state the obvious over and over again which unfortunately is completely useless.If people are so mad at the banks why don't they start there own banks or even something entirely new. The problem simply is not only with corrupt officials as the usual political rag goes but also with a corrupt and outdated system that the majority of Americans support.

If people are angry about gas prices should they wait only for the government and private industry to change things?If they do then they merely sup[port the paternalism that comes from the traditional plantation system. Or should they at long last look at themselves as creators and not just consumers and option out of the rat race to govern themselves in local communities more like what the first Americans had in mind? I think that these are the real choices otherwise things can only get worse i am sorry to say. Come on people where is the great individual American creativity?

Anyhow the point i am making is that the average voter is also a big part of the problem because they support a corrupt and totally dumbed down system.
Why don't we hear more about what people can do to solve the problems rather
then the lame reiteration of the problems over and over again?

So? There are thousand of credit unions. Some people do start their own banks. What is your point? People are not mad at banks. Don't be a child. But the situation nowadays is ridiculous.
But not like that one commercial said. The one where a banker says "Banks only gives money to those who doesn't need it" And another guy said that it ridiculous. No it is not. Banks are not a welfare program that gives money to poor people. Banks give money to return it with profit. That means it gives money to people who have money but can do better with bank's money.
And with the existing regulations banks just gives money to everyone. Still. I was buying a home recently and I probably was a unique person getting a loan with a decent down payment. Most gets mortgage still with 3% down.
And who will pay the risks? Not the banks. We, taxpayers! That is ridiculous!
I like Scott Brown. Yes we need banks to help businesses who create jobs in America. But we do not need them to risk money. Any if they do we should not bail them out.

And I agree with Obama actually on the big banks tax. I don't know, may be in future it will not be tax but regulations. I don't like taxes too :). But right now it looks like particular big banks are those who black mail the nation forcing us to bailout them. They crated a situation then we can't refuse to bailout them because it will ruin the whole economy and they are still can gamble with our money.