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Ed Cone: Kay Hagan on gridlock and the economy

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Sunday, February 7, 2010

(Updated 3:00 am)

By Edward Cone

I spoke last month with Sen. Kay Hagan at her state headquarters in Greensboro. Choosing her words carefully, the freshman Democrat shared some details and insights about her first year in office. Her answers here are edited for length; you can read the full interview online at edcone.typepad.com/wordup/hagan-interview.

Our discussion of health care quickly turned to the difficulty of getting legislation through the Senate.

Hagan: Just about every vote, whether it's a procedural vote, whether it's a nomination, whether it's a Department of Defense appropriations bill, takes 60 votes. You can use this procedure to delay everything. I think we were at about 92 different votes where the Republicans voted "no" in moving forward any piece of legislation, which is way over anything from a historical perspective.

Cone: Is the Senate broken?

Hagan: I wouldn't say it's broken. I read an interview with (veteran Senate-watcher) Paul Kirk; he said that in his mind there is a lot of partisanship that he had not seen before.

When I talk about bills I've put forward -- the first is the Financial Literacy for Students Act, another one is Pigford farm bill, trying to give some compensation to African American farmers who did not receive loans like their white counterparts did, (and a bill to provide a) catalyst to better diabetic care -- people say, have you voted on them yet, have they come forward yet, and, no, because all these bills have to go down through this funnel to get a time to actually bring something to the floor.

Just to get the appropriation bills out, we would have to go through cloture motions, because the Republicans were trying to hold up all legislation and slow down the process. Even on Department of Defense appropriations -- and if we didn't get that done, our troops wouldn't get paid. Not a good way to be acting on legislation that is absolutely crucial.

Cone: Do you think the stimulus was big enough? Do you think we're doing enough on jobs?

Hagan: We've got to do more on jobs. People have a tendency to forget what has happened with that stimulus money. The fact that we were that close to a depression and it seems like we're definitely turning the corner. ...

The 11 percent unemployed people in North Carolina right now, and probably a larger number than that who are underemployed, they're concerned about the economy, they're concerned about what they can do to increase their paycheck, or to get a paycheck. They're worried about benefits and health insurance and foreclosures. They would like to see what else can be done to turn this around, and that's the main thrust that I'm looking forward to working on. ...

A lot of the things we've done, with Small Business Administration, we've got to fund more money into that ... we've waived fees on some of those loans to encourage people to come forward and become entrepreneurs and start a business, or help grow their current business.

Cone: Let me back up. Was the stimulus too small? Was it misdirected? Was it the right idea at the time, but things turned out to be worse than the Obama team projected?

Hagan: We did what we did, and North Carolina is the recipient of about $8.6 billion. When you look at the state budget, it was a godsend to get the federal funds to help with education, to help with law enforcement, to help with transportation. We've put in a big figure for the I-85 corridor, better known around here as the Yadkin River bridge.

The economy is where we need to have a laser focus. And we've got to start addressing the long-term impacts of the deficit.

Cone: When it comes to the financial industry, has there been enough pressure applied, or moral outrage voiced? Is Congress, is government doing enough to restore sensible regulation?

Hagan: We need to have financial regulation. People say that we took all the cops off the street. ... We have got to make sure we have strong institutions but also be sure that the consumer is protected.

Cone: Do we need something like Glass-Steagall, or a modern version of it -- that kind of major regulatory change, or do we just need to tell the SEC to do its job and not pretend the bankers are going to regulate themselves?

Hagan: We've got to look at the product base, and we've got to be much more proactive, rather than having everything bundled up and sold and nobody really traced it or knew who owned it, or knew what the interest rates were, or knew who was affected when there was a default going on. It got to be almost too big for people to follow, especially with no regulation on it. &ellipses; But I'm not saying we need a new Glass-Steagall, until I get a good definition of what's going on.

I'm a free-market person. I want to be sure that the markets have the ability to act without so much government regulation that it slows them down. But at the end of the day, we have to make sure the consumer is protected -- and I know there is a difference between the informed consumer and the uninformed.

Cone: The ones who were supposed to be informed didn't do so well.

Hagan: That's true.

Edward Cone (www.edcone.com, efcone@mindspring.com) writes a monthly column for the News & Record.

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Sawdust

February 7, 2010 - 7:46 am EST

I see that Kay sidestepped the question of whether the porkulus was too big or too small. Twice. Her solution seems to be in sync with B-plus, every problem can be saved by throwing huge wads of taxpayer money at it.

Note to Kay: throwing huge wads of taxpayer money at problems is what people are so angry about. We're all cutting our budgets, how about you folks in Washington doing the same? Instead, you're increasing the number of government employees and spending more than ever. Huge wads of taxpayer money thrown down ratholes all over the country (well, all over the parts of the country that supported Obama) will not solve the problems of the country. In case you haven't noticed, and apparently you haven't, the more money you throw around, the madder the people get. Why not try cutting the size of government instead of expanding it? Just try it once. You might be surprised.

rmacz

February 7, 2010 - 10:19 am EST

Dusty, you hit the nail on the head.....or maybe Ed should have asked," Is the Porkulous bill too small of a tax increase?"
What I can't understand, is why these libtards don't see that every time Reagan's policies are tried, they work, ie lower taxes and smaller government, but I'm a tea bagger...what do I know?.....When Bush did it, the unemployment rate was between around 6%, not 11%.
Getting nothing done done is better than what Ed and Kay want. Thank G-d for Gridlock!

2fer

February 7, 2010 - 4:58 pm EST

Don't worry, Sen. Shelby is trying his Republican best to get as much federal moolah for red-state Alabama as he can. It's apparently a matter of national security for his conservative state to build aircraft tankers that don't work as well as a competitor's and to have an FBI facility that the FBI doesn't want or need. South Carolina has also done really well on a per capita basis in gathering in the green sheaves. Perhaps you should name a state of the conservative persuasion that has been slighted in receiving stimulus funds.
Has any state of whatever persuasion turned down more than a smidgen of stimulus monies? As for the huge amounts, most economists said from the beginning that the stimulus plan was half the amount it needed to be to prevent the job losses that have occurred. How many more people would be out of work if the auto industry had completely shut down except for Ford, the banking collapse had included more powerhouses of bad management like Wachovia and B of A here in NC along with all the small businesses that would have closed for lack of daily operating capital, and states hadn't had the funds to keep their schools and offices open?
Most of the ratholes are being filled through projects formulated by state and local governments, and people who have a problem with the projects should focus their attention on their state and local representatives - you know, the ones that conservatives say do the best job of meeting our expectations by managing our tax dollars wisely.
We tried the small government approach under Cleveland, Taft, Hoover, and Bush, and it didn't work worth dry spit. We tried big government under Roosevelt, Johnson, and - to hear the whining - Obama, and it at best limited the damage, but that seems an improvement to me. When big industry, big finance, and big medicine show any ability to regulate themselves and maintain a stable economy, I'll be more than happy to give downsizing another try, but in the meantime, our various levels of government are the only counterbalances that have the power to limit the damage the private sector repeatedly does to itself. I vote for my representatives; I've never voted for a CEO.
Sometimes we liberals are justly accused of being too theoretical, too pie in the sky, but this "practical" idealization of small government and the unfettered free market is far worse because we know from experience that it simply doesn't work. It didn't work in the good old days when most things were simpler, it didn't work in the complexity of post-WW II life, and it won't work now. It is a good way to reduce America to a second-rate nation, which would certainly please most of our adversaries.

rogerwx

February 7, 2010 - 8:53 am EST

Kay Hagan is doing nothing but catering to the desires of the Anointed One and his disciples. She rode in on his coattails as did "Bev"(Beverly until she was advised to shorten it for a statewide campaign). How can she EVEN claim to represent the people of this state? Mr. Cone, why not ask her why she supports a health care reform bill that she has not read and is opposed by the majority of North Carolinians. Oh wait, I know. She knows, better than we do, what is good for us.

2fer

February 7, 2010 - 3:39 pm EST

Both Hagan and Perdue got more votes in NC than Obama. It always helps to check your facts before you shoot off your mouth unless you just enjoy not knowing what you're talking about.

fishgutz

February 7, 2010 - 2:27 pm EST

Mr. Cone, had you been more concerned with getting answers to hard questions than getting on Hagn's 5#!7 list you would have asked her these questions instead.
Given that 1. the Community Reinvestment act, that was greatly expanded by the Clinton adminstration, forced banks to give loans to people that could not afford to make the payments with the promise that the taxpayer backed Fannie Mae and Freddy Mac would buy the bad loans, 2. That when the F's financial problems were deliberately ignored by Demcrats responsible for oversight, name Barney Frank who had a sexual relationship with the head of Freddy Mac
Ms. Hagan is in not reasonable to blame previous democrats government action for the massive bank failures rather than President Bush? After all, if a democrat congress doesn't send a bill to him, there is nothing he coyuld do.
Regarding the SEC, Ms. Hagan, are you aware that the SEC went and testified before congress regarding the fact that federal courts blocked their attempts to regulate hedge funds because congress had not granted the SEC that authority? Are you aware that even after congress was made aware of the what could happen if the SEC was not granted regulatory authority over hedge funds that congress still refused to allow such authority? And finally, if you are aware of these facts, why do you now say the SEC wasn't doing their job, when in fact they were doing everything the law allows?
My brother is SEC branch chief. He is busier than a one armed paper hanger. His office, in just one case, recovered $40 Million for investors in a fraud case. When the SEC has the authority to act they do. When they find gaps in authority that are being used by those intent on defrauding investors, they report these gaps to congress so they can further protect investors.
It is pure politics when the very politicians who refused to act to undo bad law and tighten loop holes when pointed out are no breaking their own fingers pointing at everyone else.
The financial industry doesn't need more regulation. It needs smart and limited regulation.

2fer

February 7, 2010 - 4:07 pm EST

Well, in paragraph 2 and 4 you say that Congress needed/needs to pass more regulatory laws, then at the end you say that the financial industry doesn't need more regulation, apparently because your brother is working so hard. This seems inconsistent to me, but maybe that's only because I don't have a player in the game.
What many other experts say is that, even though regulations were weakened under Clinton and a Republican H of R, things didn't go to hell in a handbasket until the Bush administration failed to fill empty inspector and auditor positions in the SEC and told the ones still there to look the other way when new, unsupported financial instruments were invented. Outright fraud didn't cause the recent recession/depression; the stupidity, hubris, and greed of financial and banking executives did.
It is the people in those SEC positions and their managers, not Congress, who have the responsibility to protect investors consistent with existing regulations. If, as most conservatives maintain, the regulations were sufficient at the time, then the folks in the SEC were not doing their job. If the regulations were lacking, then why are conservatives today still saying we have too many regulations to protect investors? This inconsistency is more than negligible. That Democrats played a role in weakening prior regulations only demonstrates that the Democratic party in the 1990s was not as monolithically partisan as the Republican party is today. E.g., it contained some pro-banking conservatives - as it still does. To lay this at Hagan's feet is to forget that she has a banking background and was accused of being pro-banking by the opposition during the 2008 campaign on the rare occasions when they wanted to adopt a folksy attitude.

jstevenh1952

February 7, 2010 - 3:24 pm EST

Mr. Cone, thank you for your astute question to Senator Hagan concering Glass-Stegall. Although as you sugested earlier, she choose her words carefully.

Most journalists overlook this as one of key causes of many of our problems we face today. Many focus on "Wall Street greed", excess executive pay and other populist issues as the "root" of the problem. When in fact the repeal of Glass Stegall in 1999 was the begining of the end of common sense financial regulation in our country.

It was not so much the repeal of the law, but the lack of subsequent oversight by Congress or the Federal Reserve. Unfortunately the unintended consequences of this repeal will be felt for decades. Had the Federal Reserve or Congress had initiated common sense regulatory guidlines to protect banking, the story today would have been quite different. Coupled with the lack of regulatory restraint from Congress and the ability of the banking industry to access capital at historically low rates for investment purposes set the wheels of greed in motion.

Many will debate the lack of SEC regulatory authority, excess borrowings by businesses and consumers and the role of a "hands off " Federal Reserve as the problem. But we can all point to the repeal of a long standing law without subsequent controls as the begining. The lack of political ownership is also very interesting.