A House Democrat from Massachusetts who finished second in the Senate primary against Martha Coakley is lashing out at the White House for playing "footsies" with Wall Street and urging his colleagues to develop a more aggressive agenda to rein in banks and get the economy moving.
Rep. Mike Capuano spoke out during a during a private meeting of Democrats on the House Financial Services Committee Wednesday to discuss how to chart a course forward in the wake of Coakley's upset election that cost the party its supermajority in the Senate, say several people at the meeting.
Asked by HuffPost Thursday what message he had for the committee caucus, Capuano replied, "If the White House won't confront Wall Street, the House should do it for them."
"I think Massachusetts people are upset that Wall Street has taken full advantage and doesn't seem to have changed its ways in any serious way. I think they're upset that the administration has been incredibly slow to do anything significant to rein them in," said Capuano.
The blame, he said, lies largely with the White House economic team. "The whole financial team, in my opinion, has done a very poor job in reining in the abuses of Wall Street. I think they've talked the right game, and they have not walked it at all. If the White House is going to play footsies -- which the White House has; [they] played footsies with Wall Street from day one -- that's their prerogative. I do not work for the White House. I want to work with them. I do not work for them," he said.
It's not simply Monday-morning quarterbacking from Capuano. When he returned from the campaign trail last month, he was asked to address the full Democratic caucus to share what he learned. He took the microphone and delivered a dire prediction of the party's electoral chances: "You're screwed."
His message today is that the White House has been too soft on Wall Street and Democrats in Congress haven't been clear enough in getting across their message. "We've done some good things in the House, but some of the bills are too complicated. I think they should be separated; they're hard to explain to the average voter," he said.
The House passed comprehensive financial regulatory reform last year, but did not get much of a public boost from the measure. On Wednesday, the administration began to change course, proposing new restrictions on major banks. There will need to be more of that, Capuano said.
On Tuesday night, Rep. Anthony Weiner (D-N.Y.) speculated that Capuano would have won the Massachusetts special election by 15 points.
"I'll give you a classic example," said Capuano of the White House "footsies" policy. "There has been a proposal on the table now for well over a year that could have been re-implemented immediately on certain derivatives aspects, and they've been studying it now for ... about a year, instead of reimplementing it and then studying its impact. Wall Street is back to its old games, we all know that."
Alison Mills, a spokeswoman for Capuano, said that he was "was referring to the uptick rule. This is an SEC rule in place for years, it was removed by the Bush Administration which resulted in upheaval so the SEC chairman under Bush prohibited short-selling, but after a while it was allowed again. The Obama administration put out a draft rule months ago but there's been no action."
Mills said that removing the uptick rule has no benefit to the economy at large or specific businesses. "This is what the uptick rule does -- when short sellers 'bet' against a company, this rule limits the impact of herding and other tactics to drive a company stock through the floor," she said. "It is a tactic used to make money by people who do not care about a company or the jobs involved. It provided stability for companies for years -- who, without the rule, are open to manipulation and cannot do anything about it."