Home > #OWS, finance > Matt Stoller explains politics

Matt Stoller explains politics

December 30, 2011

I’ve never understood politics, partly because they’re complicated, partly because the people who do understand politics are so heavily involved they don’t know how to contextualize for people like me. I’ve come to think of it as a lot like finance, where there’s power to be had by withholding information, and part of that power is wielded simply by inventing a new vocabulary that makes people on the outside feel tired and hopeless. You really need a tour guide, a translator, to walk you through stuff to achieve a decent level of understanding.

I now consider Matt Stoller my personal translator. Matt regularly contributes to Naked Capitalism, my go-to blog for informed, vitriolic insights into the corrupt world of finance. His recent post on Naked Capitalism concerning Ron Paul and liberals beautifully explains how confused modern liberals are when confronted by someone like Ron Paul, who is both unattractive and on their side for a number of reasons. I confess that I’ve been that confused liberal myself at many an #OWS Alternative Banking Working Group meeting, when the Ron Paul fans come and talk about Fed transparency.

But Matt doesn’t just tell a good story, although he does that. He also give you insight into the process of politics. He peppers his story with helpful, nerdy explanations like this:

An old Congressional hand once told me, and then drilled into my head, that every Congressional office is motivated by three overlapping forces – policy, politics, and procedure. And this is true as far as it goes. An obscure redistricting of two Democrats into one district that will take place in three years could be the motivating horse-trade in a decision about whether an important amendment makes it to the floor, or a possible opening of a highly coveted committee slot on Appropriations due to a retirement might cause a policy breach among leadership. Depending on committee rules, a Sub-Committee chairman might have to get permission from a ranking member or Committee Chairman to issue a subpoena, sometimes he might not, and sometimes he doesn’t even have to tell his political opposition about it. Congress is endlessly complex, because complexity can be a useful tool in wielding power without scrutiny. And every office has a different informal matrix, so you have to approach each of them differently.

Another recent Stoller post that really blew my mind was How the Federal Reserve Fights, which explained Matt’s experiences as a Senior Policy Advisor to Alan Grayson, a congressman on the Financial Services Committee in 2009-2011. Grayson teamed up with Ron Paul to force more transparency at the Fed. It’s an awesome story, but my favorite part, because I’m such a nerd and I love my nerd heroes, is the following:

When it gets down to crunch time, as a staffer going up against a big force of lots of lawyers, you get really tired and cut corners. One obstacle in legislating is that it is really hard to tell what bills do, because they have multiple provisions like “In Section 203, delete “do” and replace with “shall”. You have to constantly reference pieces of the code and compare changes, which gets confusing. It’s like doing “track changes”, but on paper and with multiple versions. This is a problem software could easily solve and I’ve heard that agencies and (probably the Fed) have such software. But I didn’t. So the Fed thought we would do nothing more than cursory reading of Watt’s amendment, and rely on their validators who told us the amendment would increase transparency. And this is where Grayson showed legislative genius. We were exhausted, but he got all the difference pieces of the law, and spent a few hours deciphering exactly what this amendment meant. And he figured out that not only did the amendment not open up the Fed facilities to independent inspection, it actually increased the secrecy of the Fed. If you want the gory details, here’s Grayson’s argument during the markup.

I’m kind of wishing Matt Stoller would write a book about “How Politics Works,” but then again does anybody read books anymore? Is it better for him to just continue to write timely blog posts? I’ll take what I can get.

Categories: #OWS, finance
  1. Aryt Alasti
    December 30, 2011 at 8:12 am

    Hah! Yea, though I trudge through the Valley of Exhaustion, I will fear no evil amendment…

    A real public service was done there.


  2. Bindicap
    December 31, 2011 at 1:12 am

    I thought the Stoller piece was an interesting view into politics for a very different reason. From the beginning it endorses the bogus recent Bloomberg reporting that bashes the Fed. It tells a story of the Fed constantly fighting and playing tricks, but reading it and accounting for the odd conclusions sprinkled around, you realize his side spread lots of nonsense and was at best a major distraction in the past few years from what has been needed to boost jobs and the economy, generally.

    The audit they demanded did indeed get passed into law and was conducted by GAO earlier this year. You can read the reports and see things generally came down entirely as advertised, but the reports did highlight changes to establish procedures and address appearances of conflict.

    But there is no introspection on Stoller’s side about the strange contentions and overbearing demands that characterized their arguments the whole time the legislation was being put together. There doesn’t seem to be any thought about what central bank governance structure makes sense and the trade offs of independence and oversight or control by a political body. Rather he was caught up in the heat of the conflict and concludes the whole battle was fun and a “fight for democracy”.

    So as a view into how laws are passed, what moves things forward, and what lessons get absorbed, it was eye-opening but not really encouraging.


  3. Matt Stoller
    December 31, 2011 at 11:52 am

    There doesn’t seem to be any thought about what central bank governance structure makes sense and the trade offs of independence and oversight or control by a political body.

    Here’s a bit you seemed to have missed.

    In making the claim that it was above politics, the central bank turned its back on its own history, ignoring the time it was controlled by a very political Treasury Department and financed the winning of World War II. The period of the non-independent Fed, which ended in the early 1950s, saw an enormous flattening of income equality. The Fed knows this, but pretended that it did not. The idea of democratic accountability in the Federal Reserve system was simply unthinkable, a clear indication of how the public simply could not be trusted.

    The Fed-Treasury Accord of 1951 is a pivotal moment in American history, one that few have ever even heard of. I’m surprised you missed the citation, since you seem so passionate and certain about this subject.


  1. No trackbacks yet.
Comments are closed.
%d bloggers like this: