Wall Street uses the Third Way to lead its assault on Social Security
By William K. Black
Third Way, lobbyists for and from Wall Street who are leading the effort to enrich Wall Street by privatizing Social Security, was created by Wall Street to fool some of the people all of the time. I have written previously to expose their fictional claims to be a moderate or liberal Democratic group.
Eric Laursen documented Wall Street’s effort to become even wealthier by privatizing Social Security in articles and his recent book (“The People’s Pension: The Struggle to Defend Social Security Since Reagan (AK Press)).
I showed that Third Way makes itself useful by providing a faux “liberal” or “moderate” “Democratic” quote machine that can be used to discredit Democrats and Democratic policies such as the safety net. I gave examples of how Third Way gave aid and comfort to the effort to defeat Elizabeth Warren and the effort to unravel the safety net. Third Way continues to prove that you can fool some of the people all of the time.
The National Journal ran an article on November 8, 2012 entitled “Left Divided over ‘Grand Bargain.’”
“Groups concerned with protecting entitlements such as Social Security and Medicare are finding themselves at odds over whether an overarching fiscal deal during Congress’s end-of-year session would help or hurt their cause.
A ‘grand bargain’ to prevent the year-end onset of tax hikes and spending cuts ‘could cut Social Security, Medicare and Medicaid benefits, all to give tax cuts to the wealthiest Americans,’ the labor group argued on its organizing site. But the union campaign is being met with resistance from others on the left.
‘We, like you, are ecstatic about the reelection of President Barack Obama and what it means or American growth and prosperity,’ wrote Jim Kessler, senior vice president for policy for Third Way, a liberal think tank with a centrist approach, in an open letter to the groups involved with the day of action. ‘However, as fellow progressives, we were disappointed to learn that you will be leading an effort against the President to impede a balanced grand bargain.’
In order to protect safety-net programs, such as Social Security and Medicare, the left must embrace reform, Kessler writes.”
Let me attempt again to make the basic facts clear. Third Way is not a “liberal think tank.” It does not take “a centrist approach.” It is not run by “fellow progressives.” It is not concerned with “protecting entitlements.” It is not even a “think tank.” Third Way is a creature of Wall Street. It’s version of “protecting” the safety net was made infamous during the Tet offensive in Viet Nam when the American officer explained that “it became necessary to destroy the village in order to save it.” Third Way is the Wall Street wing of the Democratic Party, which seeks to defeat Democratic candidates like Elizabeth Warren running against Wall Street sycophants like Senator Scott Brown and seeks to unravel the safety net programs that are the crown jewels of the Democratic Party. Wall Street’s “natural” party is certainly the Republican Party, but Wall Street has no permanent party or ideology, only permanent interests. Third Way serves its financial interests and the personal interests of its senior executives. Wall Street has always been the enemy of Social Security and its greatest dream is to privatize Social Security. Wall Street’s senior executives live in terror of being held accountable under the criminal laws for their crimes. They became wealthy by leading the “control frauds” that drove the financial crisis and the Great Recession. This is why Wall Street made defeating Warren a top priority.
Third Way is run by a man who Laursen terms an “acolyte” of Pete Peterson. Peterson is a Republican, Wall Street billionaire who has two priorities – imposing austerity on America and privatizing Social Security. Privatizing Social Security is Wall Street’s unholy grail. They would receive hundreds of billions of dollars in fees and ensure that their firms were not only “too big to fail,” but “too big to criticize” if they could profit from a privatized retirement system. (We do not know who funds Third Way because it refuses to make its donors public. Given who dominates its Board of Trustees, however, the donors must be overwhelmingly from Wall Street.)
Third Way’s self-description has some elements of honesty, admitting that it is “led by a prominent private sector Board of Trustees, drawn from finance, industry, academia, the non-profit sector and government.” The order is revealing – the board is dominated by finance, with a thin veneer provided by industry, and with the barest patina of “academics” and “government.”
Here are key excerpts from their web site identifying their board.
· John L. Vogelstein
Mr. Vogelstein is the Chairman of New Providence Asset Management, LLC and Senior Advisor to Warburg Pincus, LLC. [He co-managed that huge private equity firm.]
· Bernard L. Schwartz
Mr. Schwartz is Chairman and CEO of BLS Investments, LLC.
· David Heller
Mr. Heller … was … the Global Head of Equity Trading for Goldman Sachs.
· Georgette Bennett
Dr. Bennett—an award-winning sociologist, criminologist, and journalist…. [Yeah criminologists!]
· William D. Budinger
William D. “Bill” Budinger is the founder of Rodel, Inc., where he served for 33 years as its chairman and CEO. [Rodel manufactured semi-conductors.]
· David A. Coulter
Mr. Coulter serves as Managing Director and Senior Advisor at Warburg Pincus, focusing on the firm’s financial services practice.
Mr. Coulter retired in September 2005 as vice chairman of J.P. Morgan & Chase Co. He previously served as Executive Chairman of its investment bank, asset and wealth management, and private equity business.
· Jonathan Cowan
Prior to co-founding Third Way, Mr. Cowan founded and ran Americans for Gun Safety…. In 1992, he co-founded Lead…or Leave, which became the nation’s leading Generation X advocacy group. [He lobbied to protect “second amendment rights” to bear arms and led a Pete Peterson inspired group urging “Gen X” members to unravel the safety net.]
· Lewis Cullman
Mr. Cullman was the Founder and President of Cullman Ventures, Inc., a diversified corporation that included the At-A-Glance group, which manufactures and markets diaries….
· William M. Daley
William Daley served as President Obama’s Chief of Staff from January 2011 until January 2012.
Prior to his Chief of Staff role, he was Vice Chairman … of … JPMorgan Chase, from 2004 until 2011.
As Special Counsel to President Clinton in 1993, Daley coordinated the successful campaign to pass the North American Free Trade Agreement (NAFTA).
He was co-chair of the US Chamber of Commerce Center for Capital Markets Competitiveness. [This is code for deregulation of finance.]
· John Dyson
Mr. Dyson is Chairman of Millbrook Capital Management, Inc. (MCM), a private investment firm.
· Robert Dyson
Mr. Dyson … is Chairman and CEO of the Dyson-Kissner-Moran Corp., a privately owned, diversified investment holding company….
· Andrew Feldstein
Andrew Feldstein is the CEO and Chief Investment Officer of BlueMountain Capital Management….
Prior to co-founding BlueMountain in 2003, Mr. Feldstein spent over a decade at JPMorgan where he was a Managing Director and served as Head of Structured Credit; Head of High Yield Sales, Trading and Research; and Head of Global Credit Portfolio. [“High yield” is a euphemism for junk bonds.]
· Brian Frank
Mr. Frank is a Director and Portfolio Manager at MSD Capital, L.P., the private investment firm founded by Michael Dell.
· Michael B. Goldberg
Mr. Goldberg joined Kelso & Company in 1991 as a Partner and Managing Director. [Private equity.]
· Peter A. Joseph
Mr. Joseph has been in the private equity investment business for over twenty years….
· Derek Kaufman
Derek Kaufman is Head of Global Fixed Income at Citadel LLC. He is a member of Citadel’s Portfolio Committee.
Prior to joining Citadel in 2008, Mr. Kaufman was a Managing Director at JPMorgan Chase….
· Derek Kirkland
Mr. Kirkland is a Managing Director and Co-Head of the Global Financial Institutions Group at Morgan Stanley’s Financial Institutions Group in Investment Banking.
· Ronald A. Klain
Ronald A. “Ron” Klain is President of Case Holdings, and General Counsel of Revolution LLC. [Case is an investment fund for the holdings of AOL’s founder.]
· Thurgood Marshall, Jr.
Mr. Marshall is a partner at Bingham McCutchen LLP, and a Principal of Bingham Consulting Group. Mr. Marshall counsels and devises strategies for advancing clients’ interests before Congress, the executive branch and independent regulatory agencies. [He is a lobbyist for a firm best known for representing financial firms.]
· Susan McCue
Ms. McCue is President of Message-Global, LLC, a strategic communications and public affairs firm she founded in January 2008 to advance progressive campaigns, activism and issue advocacy in the U.S. and globally.
· Herbert Miller
Mr. Miller, former CEO and Chairman of The Mills Corporation, one of America’s most innovative and successful mall developers and managers, founded Western Development Corporation (WDC) in 1967 and serves as its Chairman, Chief Executive Officer and Principal Stockholder.
· Michael Novogratz
Mr. Novogratz has been President and Director of Fortress Investment Group LLC….. Prior to joining Fortress, Mr. Novogratz spent 11 years at Goldman Sachs….
· Andrew Parmentier
Mr. Parmentier is a Founding and Managing Partner of Height Analytics. He and fellow Managing Partner John Akridge formed the company in January 2009. He has worked in the financial services industry since 1997….
· Kirk Radke
Recognized internationally as one of the top private equity attorneys during his 28 year career at Kirkland & Ellis….
Among professional activities, Mr. Radke is Co-Chair & Organizer of the International Bar Association Private Equity Symposium, Founder of the Private Equity General Counsel Network, Founder of Legal Series and Co-Founder of the Private Equity Law Firm Roundtable.
· Howard Rossman
Dr. Rossman is a President and Founder of Mesirow Advanced Strategies, Inc. and a Vice Chairman of its parent, Mesirow Financial Holdings Inc. He is responsible for all aspects of fund management, including manager due diligence, strategy analysis and asset allocation.
· Tim Sweeney
Mr. Sweeney has been President and CEO of the Denver-based Gill Foundation since October 2007. For more than 30 years, he has worked to advance equality for all people regardless of sexual orientation or gender expression.
· Ted Trimpa
Mr. Trimpa is a partner with the international law firm, Hogan Lovells LLP.
· Barbara Manfrey Vogelstein
She has over 24 years of experience in venture capital and specialized equity investing. [S]he was a Partner of Warburg Pincus, one of the world’s largest private equity firms.
· Joseph Zimlich
Mr. Zimlich is the Chief Executive Officer of Bohemian Companies, a group of family-owned real estate and private equity holdings.
Twenty of the twenty-nine trustees come from finance (counting the lawyer whose specialty is representing private equity firms). Their most common background is Mitt Romney’s – private equity – and hedge funds. The nine non-finance members include:
- A Pete Peterson acolyte who previously created supposedly centrist front groups for gun rights and an effort to enlist “Gen X” in Wall Street’s assault on the safety net
- A developer of giant malls
- A semi-conductor manufacturer
- A manufacturer of diaries
- A criminologist/journalist
- A PR specialist
- A gay rights activist
- A lobbyist at a firm best known for representing finance
- A lawyer
The board includes three representatives of “main street” (malls, semi-conductors, and diaries). They are not heavy hitters compared to the finance representatives. On finance issues, Third Way is Wall Street. It is run by Wall Street for Wall Street. It is liberal only on social issues such as gay rights – and Wall Street created Third Way to focus on finance.
I have explained in other articles the incoherence and ineptitude of the financial policies that Third Way (including Casey, who temporarily left Third Way’s board to serve as President Obama’s chief of staff, where he urged Obama to adopt austerity and the Great Betrayal. I have explained how those policies would have thrown the nation back into recession and doomed Obama’s chance for re-election. Third Way has learned nothing from their errors – they continue to push the Great Betrayal and austerity. Their overriding goal is to begin the process of privatizing Social Security. The fact that their policies would cause a gratuitous recession, immense misery, and terrible electoral losses to Democrats does not represent a policy failure to Wall Street. Wall Street would be the grand winner if we began to privatize Social Security as Third Way proposes.
The “left” is not divided on the need to oppose austerity and the Great Betrayal. Third Way is not left or center or even right. It is Wall Street on the Potomac. Opposition to austerity and the Great Betrayal is not a left v. center issue. Wall Street’s proposed financial policies are terrible for virtually all Americans.