Populist Reform of the Democratic Party

Elizabeth Warren is fighting Wall Street for the soul of the Democratic Party



Bill Clinton changed the Democratic Party, and Elizabeth Warren is trying to change it back — at least when it comes to Wall Street.

The latest intra-party skirmish has come over the so-called "CRomnibus" (don't ask) spending bill that would have funded the government for the next year, as well as, among other pet projects, killed Dodd-Frank's prohibition on big banks using federally-insured money to make exotic bets. Now, that wouldn't gut financial reform by any means, but it would be the latest step in Wall Street's death-by-a-thousand-tweaks campaign against it. And that was too much for Warren, who led a liberal revolt against the bill that ultimately failed.

But what would this derivatives change even do? Well, swaps are just bets on everything from interest rates to currencies to whether a company is going to go under or not.

...The bigger issue is whether every legislative choke point will turn into another opportunity to whittle away at financial reform. That's why Warren and her allies have decided to draw a line in the sand here, over swaps push-outs. If they don't fight this battle, then they'll have to get ready for the next one over even more important parts of Dodd-Frank—and so on, and so on.

But this isn't a fight that all Democrats want. Some of them are happy to give Wall Street what it wants. That's been true ever since Clinton turned them into not the party of business, but a party of business—and particularly Wall Street business. The Warren wing of the Democratic Party, of course, wants to change this. That's why they oppose filling even lower-level Treasury positions with Wall Street veterans, and why they've rallied against a giveaway to big banks tucked away in the government funding bill.