Let Us Bow Down Before The Big Dog

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Well, so much for Barack Obama's reelection campaign talking at all about Mitt Romney's career at Bain Capital. The private equity firm has proven a great vulnerability for Romney in the past and it exemplifies the economic vision Romney is running on, but Obama better lay off it for the rest of the campaign. Why, you ask? Well, because Bill Clinton said so, of course.

It was somewhat lost amid Friday's dismal job-report news, but the arbiters of conventional wisdom seem to have decided that Clinton's comments on CNN Thursday night gently critiquing the Obama campaign's attacks on Bain have rendered those attacks inoperative. Here's what Clinton said: “I don’t think we ought to get into the position where we say this is bad work; this is good work...There’s no question that, in terms of getting up, going to the office, and basically performing the essential functions of the office, a man who’s been governor and had a sterling business career crosses the qualification threshold.” This was offered in the context of arguing that the Obama campaign ought to instead focus on setting its superior vision for the country against Romney's inferior one, and of Clinton's overall prediction that Obama would prevail in November.

But it was the remarks on Bain that were catnip to reporters and pundits ever-alert to signs of Clinton undermining the man who kept his wife from becoming president. The Washington Post's Aaron Blake declared that as a result of Clinton's comments, the "shelf life of President Obama's Bain Capital strategy appears to be rapidly shrinking," under the headline: "Bill Clinton Sticks Another Fork in Obama's Bain Strategy." A day later, the Post's Dan Balz further underscored the emerging conclusion, writing, in somewhat more finely calibrated terms, that Clinton's commentary "was interpreted as a signal to the Obama team to ratchet back on attacks that Republicans have characterized as anti-business and anti-free-enterprise. Obama’s advisers have argued that the Bain attacks were not aimed at business broadly but only at Romney’s qualifications and values. Clinton seemed to knock down the wisdom of that approach."

All of which leads me to wonder, not for the first time: exactly who died and made Bill Clinton king? Or more specifically, who made him the font of all wisdom when it comes to Democratic strategy and policy-making? I realize that he rightly commands a certain level of authority in this regard as the only Democrat to win two presidential elections since FDR. But it's remarkable to what an extent his defense of Bain Capital is being taken as gospel, without any attempt to consider the background and motivations that Clinton brings to the subject. The press is happy to take into account one motivation, of course -- Clinton's well-established tendency to say things that, however subtly, tweak Obama (and relatedly, Mitt Romney's recent ploy of cozying up to Clinton, which surely has not gone unappreciated by the former president.)

Left largely unsaid, though, is that it is also hardly unsurprising for Clinton to be speaking up in defense of high finance. Remember: this is the man who as president presided over the alliance of Wall Street and the Democratic Party, embodied in his treasury secretary, Goldman Sachs veteran (and future Citigroup executive) Robert Rubin. It was Clinton who signed the repeal of Glass-Steagall, the 1933 law breaking up securities firms and commercial banks; it was Clinton whose advisers, notably Rubin and Larry Summers, blocked Brooksley Born's push for tighter regulation of derivatives; it was Clinton who lowered the capital gains tax in 1997, vastly boosting the bottom line of private equity managers like Mitt Romney who, via the carried interest loophole, had their compensation treated as capital gains rather than ordinary income.

Surely it is no accident that Clinton's other recent remark undermining Obama was also related to Obama's allegedly over-populist stance toward high finance and the very wealthy. In an interview last fall with Newsmax -- yes, Newsmax -- Clinton critiqued Obama's talk of raising taxes on millionaires who currently pay at very low rates ("The Buffett Rule") by saying that it was a bad idea to raise anyone's taxes "until we get this economy off the ground." He added for good measure: "We don't have a lot of resentment against people who are successful. We kind of like it, Americans. It's one of our best characteristics that, if we think someone earned their money fairly, we do not resent their success. Americans lost the fact that, whatever you think about this millionaire surcharge -- I don't really care because I would pay it but it won't affect me because I already paid income because I live in New York. I will pay more, but it won't solve the problem." Clinton tried to clarify these remarks later, but not before Crossroads GPS, the group founded by Karl Rove, built an Obama attack ad around the remarks.

What is utterly lost in the pundits' exaltation of Clinton's comments on Bain is that there is, in fact, a real debate going on within the Democratic Party, and that the reaction to the Obama campaign's attacks on Bain are bringing out the intra-party tensions. On the one side are Democrats like Obama who have seen many former Wall Street supporters turn away from them for daring to hold them responsible for the 2008 financial collapse, for proposing reforms like closing the carried-interest loophole, and for generally believing that the explosive growth of the financial sector the past three decades has not exactly been healthy for the country. These Democrats argue that, while attacks on Bain might not play so well in the Acela Corridor, they may well resonate in Ohio. On the other side of the debate are Democrats like Clinton and Cory Booker, the mayor of the 68th biggest city in the country, who have managed to remain in the good graces of Wall Street, not least because they are not in the position of having to fix what went terribly wrong in the fall of 2008, and who also, it must be noted, are indebted to the high-finance world -- Booker for its crucial support of his campaigns, and Clinton for its support of his post-White House philanthropic efforts.

But in the pundits' telling, this debate does not exist. If Bill Clinton says Bain is untouchable, then it must not be touched. Now, it's true, as I've written before, that the Bain attacks alone are not going to do the trick -- for one thing, they are probably going to need to be joined more with critiques of the tax inequities that make private equity work so particularly lucrative, which polls suggest voters find especially troubling, and which lend themselves to actual reforms that Obama can propose. But the notion that Chicago should lay off Bain Capital, and the human collateral damage it wreaked to its founder's enormous benefit, just because one Wall Street-friendly ex-president says so? That dog won't hunt.

follow me on Twitter @AlecMacGillis

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