John Lawrence and Michael Hirsh

The New York Review of Books - - Contents - Let­ters from

John Lawrence, who spent most of his ca­reer serv­ing the Demo­cratic es­tab­lish­ment on Capi­tol Hill, more or less vin­di­cates my ar­gu­ment, which is that this same es­tab­lish­ment re­mains in a se­ri­ous state of de­nial about the depth of anger within the Demo­cratic base, and its sense of be­trayal. Lawrence ap­pears to see my ar­ti­cle as a per­sonal at­tack on Pelosi—which it is not— rather than a cri­tique of the en­tire Demo­cratic Party lead­er­ship go­ing back to Bill Clin­ton, which it is.

I write pos­i­tively of Pelosi’s pro­gres­sive achieve­ments and skills as a leg­is­la­tor, com­par­ing her fa­vor­ably to John Boehner and Paul Ryan, while at the same time not­ing that she’s al­ways been quick to com­pro­mise. Cer­tainly the most (un­in­ten­tion­ally) com­i­cal part of Lawrence’s cri­tique comes when he con­cedes that, even when they were in the ma­jor­ity, “Democrats were ad­mit­tedly frus­trated by their in­abil­ity to achieve some goals, among them end­ing the wars in Iraq and Afghanistan” and “im­pos­ing tougher sanc­tions on Wall Street ex­ec­u­tives.” As we know, lead­ing mem­bers of the Demo­cratic es­tab­lish­ment, in­clud­ing Hil­lary Clin­ton and Joe Bi­den, helped to start the war in Iraq (though Pelosi de­serves credit for vot­ing against it). As far as Wall Street goes, the es­tab­lish­ment did lit­tle bet­ter, as I note in my ar­ti­cle. What es­pe­cially brought a smile to my face was Lawrence’s com­ment that I “would do well to study Pelosi’s al­lo­ca­tion of women and mi­nori­ties to cru­cial com­mit­tees and lead­er­ship.” In my two decades of cov­er­ing Wash­ing­ton, I saw no worse abuse of crony­ism than when Pelosi, while still Speaker in 2009, ap­pointed her old Cal­i­for­nia ac­quain­tance Phil An­gelides to head the Fi­nan­cial Cri­sis In­quiry Com­mis­sion, de­spite his lack of qual­i­fi­ca­tions. Pelosi and Se­nate Ma­jor­ity Leader Harry Reid chose An­gelides over a supremely qual­i­fied woman, Brook­sley Born, the de­riv­a­tives whistle­blower who was one of the very few he­roes of the whole sor­did fi­nan­cial scan­dal. Born, the for­mer head of the Com­mod­ity Fu­tures Trad­ing Com­mis­sion, had seen the dan­gers of un­reg­u­lated de­riv­a­tives trad­ing—in­clud­ing all those no­to­ri­ous mort­gage-backed “col­lat­er­al­ized debt obli­ga­tions”—be­fore al­most any­one else in Wash­ing­ton. But pow­er­ful men such as Trea­sury Sec­re­tary Robert Ru­bin, his deputy Larry Sum­mers, and Fed­eral Re­serve chair­man Alan Greenspan si­lenced her in the late 1990s. A bril­liant lawyer who had once been short-listed for at­tor­ney gen­eral, Born also knew how to con­duct an in­ves­ti­ga­tion. An­gelides did not, and he made a mock­ery of the probe from the very first day, when he thanked the vis­it­ing chair­men of Gold­man Sachs, JPMor­gan Chase, Mor­gan Stan­ley, and Bank of Amer­ica for their “thought­ful” open­ing state­ments.

The out­come was that what could have— and should have—been the twenty-first­cen­tury ver­sion of the fa­mous Pec­ora Com­mis­sion of the 1930s turned into a farce. Dur­ing the New Deal pe­riod, Fer­di­nand Pec­ora, a for­mi­da­ble New York pros­e­cu­tor, hu­mil­i­ated and forced the res­ig­na­tion of Charles Mitchell, the head of Na­tional City Bank (later Citibank), and over­saw an in­ves­ti­ga­tion that ul­ti­mately re­sulted in the Glass-Stea­gall Act. In con­trast, An­gelides’s com­mis­sion is­sued a re­port that dis­ap­peared with­out a trace.

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