This week, Newark Mayor Cory Booker–CEO of a city whose economic life has been hollowed out by Wall Street mandated business practices–leapt to a surprising and galling defense of the very industry that contributed to the devastation he was elected to reverse.
His odd defense of a swashbuckling subset of the financial industry has unleashed a torrent of withering criticism. The bruised mayor has lashed out at those understandably confused by his comments. Booker, who previously earned the nickname Superman, said on Twitter Thursday, “Sorry I make you sick. And sorry I made a mistake.” Though he rescued a woman from a burning building, this may be the beginning of an unfortunate political flameout.
“Nauseating.” That’s the word Booker twice used on NBC’s “Meet the Press” to describe the Obama campaign’s attack on Mitt Romney’s tenure at Bain Capital, and the destructive greed he brought to dozens of communities across the country. The Obama campaign’s website spotlights four companies Romney bought as Bain’s CEO, examples that together reflect the way the presumptive Republican nominee does business.
At Bain, a private equity firm, Romney trolled the United States for companies to exploit and destroy. He did so by snapping them up and either: 1) indebting them and using the borrowed money to make Bain’s financial numbers look better than they would have otherwise; or 2) slashing workers to improve, temporarily, the perceived profitability of a company, thereby allowing the firm to be resold at a higher price. That’s essentially what private equity companies do. They use the money of wealthy people and wealthy institutions, including pension funds, to buy companies, wring the value out of them and sell whatever is left.
In the Obama ad, John Wiseman, one of the workers cast off from a company purchased and discarded by Bain, puts it plainly: “We view Mitt Romney as a job destroyer.” Shockingly, “Mad Money” stock-picker and Wall Street champion, Jim Cramer concurred. “Mitt Romney is known as a jobs destroyer,” he announced. This bizarre role reversal occurred as Cramer and Booker sat across the table from each other on the same TV program.
Despite the fact that Main Street and Wall Street were oddly in accord on Romney’s record, Booker pressed on undeterred. “I’m not about to sit here and indict private equity….(Bain) has done a lot to support businesses and to grow businesses,” he declared.
Though bold, Booker’s bulwark of the financial industry was not surprising. For almost three decades, political leaders in the U.S. and in democracies around the world have increasingly bent their ears and public policies away from the interests of the many and towards the demands of the few. They have done so in the vain hope that concentrating wealth and power in ever fewer hands will lead to more for everybody. That clearly hasn’t worked.
Still, as wealth and power have gathered to smaller numbers of people, those very people–leveraging unbridled campaign contributions and news media consolidation–have also had a greater say over who gets elected and heard.
Just days before Booker’s comments, a U.K. inquiry into the illegal wiretapping of thousands of people’s phones, by Rupert Murdoch’s media empire, revealed the power that financial titans have over both the political class and economic policy making. At the inquest, Rebekah Brooks, a former chief lieutenant of Murdoch’s and head of his British newspapers, spoke of her close relationship to two of the last three British prime ministers. Brooks routinely exchanged chummy text messages with David Cameron, the current prime minister. They weekended jointly at their separate country houses and swapped horses. Fortified by information gathered on politicians through wiretapping, Brooks used these close relationships to lobby for the full range of Murdoch’s business interests in Britain. Documents made public through the investigation show the British government’s obsession, from the prime minister’s office on down, with satisfying News Corporation’s financial ambitions. All the while, Britain slid into recession and youth unemployment approached levels not seen in decades.
Here in the U.S., Jamie Dimon, head of J.P. Morgan Chase–Wall Street’s biggest bank–has also lobbied mightily for the few to the detriment of the many. For two years he’s fought for a loophole in the 2010 financial reforms that would allow banks to continue the same dodgy practices that brought the world to crisis. Given that Wall Street donates more to national campaigns than any other industry, Dimon’s success seemed likely–that is, until his bank’s actions last week proved the need for tight, new rules. Out of the blue, Dimon announced the stunning loss of billions of dollars on bets gone wrong, the true cost of which is still unknown. This financial wound was self-inflicted. It was created by Wall Street’s history of getting the economic policy that it wants, even as the rest of us have to pay for it.
Against this backdrop of money, politics and economic policy, Booker’s odd choice of words is not so odd after all. His political future, in part, depends on uttering them. But his having done so points to the difficulty of righting the economic future for us all. And considering last week’s Census report on the emergence of a people of color majority in the U.S., that future demands a dramatic reversal of the very policies that Booker and most of the political class continue to justify.
The Census report, which the mayor did not talk about, shows that the U.S. cannot continue to be a great power while it allows its growing majority of Latinos, blacks and Asians to remain under-educated and under-employed at up to twice the rate of whites. And the only way that gets fixed is if the the political class actually develops a plan to end the jobs crisis, the immigration crisis and the education gap in a sustained, systemic, strategic and massive way. Such a revolution in economic policy can only happen when leaders like Booker stop defending financial interests, and start remembering the voters–more than the dollars–that got them elected.
Imara Jones writes about economic justice for Colorlines.com.