An article in Business Week tells about U.S. Sen. Blanche Lincoln's sudden and unlikely emergence as an extreme liberal consumer champion really trying to put the screws to Wall Street.
Lincoln jumped up three weeks ago as chairman of the Senate Agriculture Committee and unveiled a little bill to force banks, if they wish to remain banks, to spin off and wall off their derivatives operations.
Until then, the most liberal notion floated for financial reform regarding banks and derivatives was to create a tightly regulated and publicly transparent new exchange.
Lincoln, still new to the agriculture chairmanship, became involved because some derivatives involve commodities futures markets overseen by her committee.
While everyone was expecting her to unveil another of her finessed bipartisan compromises with her ranking Republican, Saxby Chambliss of Georgia, she hauled off and proposed talking hundreds of billions of dollars of profits out of our biggest banks.
Allow me to synopsize the article's assertions of how and why this happened: It was Arkansas politics. It was national politics.
And it was the influence on Lincoln of a longtime friend, U.S. Sen. Maria Cantwell of Washington, who, according to Business Week, joined Lincoln in the pioneering gender integration of congressional softball years ago and who came to Washington mainly to try to reform a corrupt high-finance culture she'd observed in horror during the Enron scandal.
The White House, the Federal Reserve, the Treasury Department, the FDIC and credible liberal Democrats like Chris Dodd never wanted to jerk billions away from banks arbitrarily. They wonder where the new derivatives market might go — to unregulated foreign transactions, perhaps? — if forcibly separated from standard financial institutions they intend to regulate more stringently.
National reporters checking in on our nationalized Senate Democratic primary tell me that White House sources tell them that Lincoln needs a day in the sun with this provision and that they owe her temporary inclusion of it because, after all, she did provide the 60th vote by which we have health care reform.
Reuters was reporting Monday that the provision, known as Section 106, is going to get excised, perhaps this week. But Blanche, newly minted populist, could still say she tried.
The Business Week piece relates that, as late as early April, Senate Agriculture Committee staff members were shopping a derivatives compromise between Lincoln and Chambliss that the White House rejected as entirely too mushy.
Meantime Lincoln was coming under ever-increasing political pressure at home, largely from national liberal groups funneling money to Bill Halter and calling her a pawn of the Wall Street thieves who nearly ruined our economy.
Then Cantwell began prevailing on her friend to put some serious teeth into what she proposed.
So Lincoln blew off Chambliss and went, for once, liberal.
Then, at a Senate Democratic caucus meeting, she got hammered by her colleagues on what in the world she was up to. The article says it was Cantwell who got up at that meeting and bailed out Lincoln.
It all serves to advance a portrait of Lincoln as politically pliable and a tad elusive on where she actually stands. It's an image advanced by the dishonest negative campaign she's been willing to wage.
This is quite a spectacle. We have an incumbent Democratic senator acting all pro-consumer in Washington while a shadowy business group runs racist television commercials in her behalf against Halter.
Then Lincoln puts out mailers to a few addresses showing her with her pal Barack Obama. But a lot of people didn't get that mailer because they're supposed to think she doesn't much like Obama.
What Lincoln is doing is assembling a jigsaw puzzle that, if and when completed, will show the map of Arkansas at the end of a stick ... as a sucker.
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