Audio

Economist Simon Johnson says it will likely be a long struggle to get the financial system functioning as it should so that it no longer can behave in ways that endanger the entire national and global economy. A key event in that struggle takes place in Capitol Hill on June 11, when he and other progressive financial industry experts speak at a forum billed as "community people pushing policy people" on the subject of re-regulating the financial services industry.

The event is part of A New Way Forward, a nationwide mobilization effort that declares that "it is time to break up the banks." More specifically, the series of rallies, forums and town hall meetings that began this week is promoting a three-pronged agenda of nationalizing, reorganizing and decentralizing banks and other financial institutions.

Johnson, a professor at MIT's Sloan School of Management and a senior fellow at the Peterson Institute for International Economics, says in this interview that banks should be treated like nuclear power plants, "tightly regulated" to protect consumers and the economic system as a whole. "You don't want excessive or even a high level of risk in the core of that sector," he says. "It's way too dangerous."

Johnson, one of the contributors to the economics blog Baseline Scenario, also says that he sees troubling signs in news that the Obama administration appears to be backing away from some more audacious proposals for reforming the regulatory structure under which banks operate. Johnson said administration insiders are torn between aggressive reformers such as Sheila Bair, the outspoken director of the Federal Deposit Insurance Corporation, and status quo defenders such as Treasury secretary Timothy Geithner. "Part of what we're trying to do in our public discussion is side with the Sheila Bair line of argument, and try to strengthen their position."

The Capitol Hill event begins 9 a.m. June 11 in the Gold Room of the Rayburn House Office Building. The event is scheduled to be webcast. The Campaign for America's Future is a supporter.

The America's Future Now! conference in Washington starting June 1 sets up the political fights that will be at the center of the political debate as the Obama administration moves its agenda. It is an exciting time for progressives and the conference is an opportunity to develop strategies for alternately supporting and challenging the new administration, while building an enduring progressive majority.

A joint report by the Campaign for America's Future and Media Matters for America details the solidification of a center-left political majority, one that is supportive of a greater role for government in helping to rebuild the economy and in meeting such progressive goals as universal access to health care. Robert Borosage, co-director of the Campaign for America's Future, details the key findings of the report and explains why so many pundits still erroneously claim that America's electorate is centrist-conservative.

Borosage says that the report should embolden President Obama as he pursue his legislative agenda, and it should embolden the progressive movement to push the White House and Congress to be true to their more progressive promises..

A New York Times/CBS News poll this week suggests the nation's racial climate has been dramatically changed by the election of America's first biracial president, with an apparently record high 66 percent of Americans saying race relations are good. But don't think that because people are feeling more positive about race relations that we are entering an era where we can begin to treat race is irrelevant.

Quite the contrary, says john a powell, the director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University, who warns in an interview with me that progressives as well as conservatives are badly misreading the racial landscape that the country has entered in the age of President Obama.

powell is leading a new organization, Americans for American Values, that will look at the nation's continuing racial disparities from a different angle from how it has been frequently addressed. While much of the debate around race has focused on conscious attitudes (which is what was being measured by the Times/CBS poll) and behavior, Americans for American Values will focus on unconscious bias and how that bias affects our educational, economic and social institutions.

"The research shows that unconscious bias is actually fairly high throughout the whole population. And it can be manipulated, or influenced, by the showing of images, telling of stories, hearing certain buzzwords," powell says in the interview. This bias affects individual behavior and, from a public policy perspective, leads us to embrace and adopt policies and programs that end up having a racially disparate effect, even if that effect was unintended. "We need to be aware that we can be biased and that can affect our behavior even when we don't want to be," powell says.

powell calls the "practices, cultural norms, and institutional arrangements" that grow out of this bias "racialization," and wrote about its implications in detail in an article published in the Denver University Law Review. He uses the term, he wrote in the article, because "the language of race and racism is understood in a way that is too limited and specific to help us acquire greater insight into the important questions posed" by today's racial realities in America.

Progressives, powell says, are as susceptible to accepting racialization as conservatives. "The failure to actually embrace race in a constructive, much more sophisticated way is one of the great failures of the progressive movement," he says.

It is not enough to pursue "race-neutral" policies or to use proxies for race, such as poverty, powell says. For example, in the absence of structural changes in patterns and practices that leave African Americans and women underrepresented in construction trades, the money in the economic recovery bill that is now being poured into infrastructure projects will invariably end up benefiting whites and males more than African Americans and females, powell says.

Americans for American Values will operate under the auspices of the Institute for America's Future and will conduct research into how racialization influences policy and how policies can be changed so that they are more fair and address continuing racial inequities. The project is supported by a grant from the W.K. Kellogg Foundation.

powell will be a speaker at the America's Future Now! conference in Washington June 1-3.

"What we want to do is help America to understand how race continues to operate—in interesting ways and in measurable ways—and undermine our values" of "a racially fair and racially inclusive society," powell says.

The Obama administration this week got a warning shot across its bow against structuring a bank resuce plan that would amount to yet another taxpayer subsidy of the wealthy. It's a shot that progressives who have the administration's ear on economic policy need to echo.

That shot was fired when Treasury Secretary Timothy Geithner was grilled before the Congressional Oversight Panel on Tuesday. The panel is probing the federal government's financial rescue efforts.

Damon Silvers, associate general counsel for the AFL-CIO and a member of the panel, zeroed in on the administration's plans for a Public-Private Investment Program, which would buy up so-called "toxic assets" from financial institutions, using a mix of taxpayer and private-investor dollars. The program is envisioned as a way to get bad and questionable loans off the books of troubled banks in exchange for cash the banks can use to make loans and restore themselves and the economy to health. When the economy recovers, the "toxic assets" could increase in value enough that they are no longer toxic, earning the investors and taxpayers a profit.

The question, as Silvers puts it in this interview, is who bears the losses and who earns the profits, and whether a government program is being used to transfer wealth from working people to Wall Street.

During the panel hearing Silvers displayed charts that showed how a public-privatre investment program sould end up being a bad deal for taxpayers. In one scenario, a financial institution puts up as little as 7 percent of the cost of a toxic asset, while the government puts up the other 93 percent. And even that 7 percent could be taxpayer money drawn from the federal government's Wall Street bailout efforts. But even though taxpayers put up between 93 percent to 100 percent of the value of the asset, they would stand to gain only 50 percent of the profit. Taxpayers would, however, end up bearing most of the loss if the value of the asset dropped.

Geithner challenged Silvers interpretation of how the program would work, but Silvers stands by it.

"You've got to ask the investors in the banks to bear as much of the losses as possible consistent with keeping the financial system stable," Silvers said. After all, that's how a market economy works. In particular, "that's the reality that working people are living through, that when things go bad in a market economy, individuals suffer."

The message that Geithner needs to hear, Silvers says, is that investors who reap the benefits of the upside should also be prepared to bear the risks of the downside.

The Treasury Department has set a deadline of Friday for soliciting participation in the program.

Health-care expert Jacob Hacker, professor at the University of California at Berkeley, explains to reporters the findings of his report, "Healthy Competition," which concludes that a public health care insurance plan can compete on a fair basis with private insurers. The fear that a public plan would crowd out private insurers has been raised by lawmakers as a reason to not consider offering the public the option of a public insurance plan. Hacker maintains that proper safeguards would protect the ability of patients to get care and would guard against cost-shifting onto private insurers.

What does it mean for an unsung hero of the progressive movement to be recognized for his or her behind-the-scenes work with the annual Maria Leavey Tribute Award? In interviews with me and senior writer Bill Scher, the 2007 honoree, Ari Lipman of the Industrial Areas Foundation and lead get-out-the-vote organizer for the Faith Vote Columbus project, speaks of the inspiration that has kept him going. Also, last year's recipient, Jim Gilliam, then of Brave New Films,discusses how the honor helped him to better appreciate his contribution to the movement and inspired him as he launched his latest the participatory democracy effort, White House 2.

The annual award will be presented at America's Future Now! (the progressive conference formerly known as Take Back America), convening June 1-3. Who do you know that toiled quietly away from the limelight to bring about progressive change in the past year? For details on how you can nominate an unsung progressive hero to be the next Maria Leavey Award winner, go to our Maria Leavey page.

ALSO: Read Bill Scher's blog post on the Gilliam and Lipman interviews.

Leaders of a major education coalition on March 26 released a report, "Obama's Budget: Supporting Students, Not Banks," that outlined how much additional college financial aid students will receive in each state under President Obama's proposed fiscal 2010 budget. The budget increases direct student aid while cutting subsidies to banks that market student loans.

This news teleconference features Robert Brandon, the director of the Campaign for College Affordability; Robert Borosage, the co-director of the Institute for America's Future; Christine Lindstrom, director of the U.S. PIRG Higher Education Program; Bill Scheibler, national field director of the United States Student Association; and Hilary Shelton, director of the NAACP Washington Bureau.

The report was co-written by the Institute for America's Future and U.S. PIRG.

Robert Borosage, Campaign for America's Future co-director; William McNary, president of USAction; and Jane Hamsher, editor of FireDogLake, explained in a teleconference with reporters why they have launched an offensive targeting conservative Democrats who have indicated they may block key portions of President Obama's budget priorities.

“We are been pretty unhappy to see many often-conservative Democrats – New Democrats, Blue Dogs, etc. --suggesting that they are beginning to have doubts about the president’s program and are ready to move against it," Borosage said. “We think it is very important that they hear from their constituents and not simply from their contributors.”

McNary said that conservative Democrats can't be allowed to be "the unwitting accomplices of the obstructionists who have only declared that they want the president to fail." Using a football analogy, McNary said that if President Obama is the quarterback, "we need to block" so that he has room to maneuver his agenda through Congress.

"This is primarily an education campaign," said Hamsher, who has been leading an "accountability" project on FireDogLake that tracks how Congress is measuring up to the pledges President Obama and Democrats made during the 2008 campaign. "It is fortunate that several of members are up for re-election, because that is they time when they are listening to their constituents and hearing what they care about. I think if we make people aware of what’s going on, then they can decide for themselves."

The Campaign for America's Future has launched a website that lists conservative Democrats, makes it easy to send members emails or make calls, and contains links to up-to-date information on their actions.

Underneath the comity displayed at the White House health care summit, fault lines between progressives and insurance lobbyists were clear, especially on the issue of whether we provide the choice of a public health insurance plan to compete against private plans. That's what health care blogger Richard "R.J." Eskow (Huffington Post and Sentinel Effect) told listeners of The LiberalOasis Radio Show, heard on WHMP in Western MA.