The Unwinding: An Inner History of the New America (46 page)

The same afternoon, Chris Dodd, after refusing for weeks to allow Brown-Kaufman to
come up, suddenly cleared the way for a snap vote that night. The amendment had been
picking up momentum in the press and on Capitol Hill, with even a few Republican senators
announcing their support, including Richard Shelby of Alabama, the ranking member
of the Banking Committee. It was time to head off Brown-Kaufman.

Shortly before the vote, Dianne Feinstein of California, one of the wealthiest members
of the Senate, asked Richard Durbin of Illinois, “What’s this amendment about?”

“Breaking up the banks.”

Feinstein was taken aback. “This is still America, isn’t it?”

Just after nine in the evening, the amendment went down, 61–33.

After the result was announced, Dodd took the floor and told the Senate that it was
Richard Shelby’s birthday. Around four in the afternoon, Dodd said, the Banking Committee
had brought out a cake and shared it. “So we celebrated in the midst of the debate.
It’s important that people in the country know we can have very strong differences,
but we also can work together. While we disagree with one another on substantive issues,
we can enjoy each other’s company on a personal level, a civil level.” And Senator
Dodd wished Senator Shelby a very happy birthday.

Later that night, Kaufman returned to his office in Russell. Connaughton asked him
what he should put into a press release. Kaufman could muster only three words: “I
am disappointed.” They had known it was doomed, but the size of their defeat was devastating.
In the span of a few hours, they had been vindicated by the flash crash, then thoroughly
whipped on too big to fail. The southerner in Connaughton, the romantic believer in
lost causes, told the staff, “Some things are worth fighting for.”

*   *   *

On May 21, the Dodd bill passed the Senate, and on July 21, President Obama signed
the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. The Volcker
Rule was now a ghost of itself, with the details left to regulators. Kaufman at one
point decided that the bill was too weak to earn his support, but in the end he voted
with his party.

The main lobbying group in favor of a strong bill, Americans for Financial Reform,
threw a party and invited Kaufman’s staff to celebrate. The new law, after all, had
created a federal agency called the Consumer Financial Protection Bureau—a place at
the table for the American public—which was the piece of Dodd-Frank that Connaughton
also liked. The event was held in a shabby rented theater far from downtown, and the
spread included white bread, baloney, and Doritos. Connaughton thought back to all
the corporate events he’d attended in plush downtown conference rooms, with shrimp
and roast beef. He was happy to be here.

There were four months left in Kaufman’s abbreviated Senate term, but the big fights
were over. Most of them had been lost, or left in a limbo that was worse than losing.
For his part, Connaughton would have tossed away all of Dodd-Frank, the Volcker Rule,
and everything else for the simple act of enforcing the law. One fastball at Wall
Street’s chin, a few top executives going to jail, would have had more effect than
all the new regulations combined.

Kaufman, who was going to take over from Elizabeth Warren as the head of the congressional
panel overseeing the bailout fund, asked Connaughton what he wanted to do next. Find
a job in the administration? Lead a Washington nonprofit for financial reform?

Connaughton imagined himself as an employee of the Interior Department, taking his
lunch break out on C Street SW and going up to the hot dog vendor: “You got any sauerkraut
today, Harvey?” The idea of joining a nonprofit was just as dismal. It would be one
thing if the Republicans were in power, but the guys in the White House were supposed
to be on his team. If he was going to take on the establishment, he didn’t see the
point of doing it in Obama-Biden’s Washington. One day in late August, he was channel
flipping when Glenn Beck came on, telling an immense crowd on the Mall that change
didn’t come from Washington, it came from real people in real places around the country.
Beck was an asshole, but Arianna Huffington wrote the same thing in a column two days
later. They were right. Connaughton felt a sneaking sympathy with the Tea Party.

He could always go back to Quinn Gillespie, but if he spent another day there it was
going to be on his tombstone. Instead, the years with Kaufman, the proudest of his
life, could be the final stamp on his Washington career. He was approaching fifty-one,
and he was tired of being someone’s number two. If he stuck around, doing no matter
what, he would have to maintain the fiction that he was a Biden guy and perhaps again
be humiliated by the man to whom he’d been loyal for a quarter century. “Honestly
and painfully,” Connaughton said, “with Biden as vice president I was tired of being
a fraud. I don’t care how much money it means, I don’t care how many people want to
buy me drinks, I’m just not going to do it. It would have been a look-in-the-mirror
kind of thing.” The more he thought about it, the more it made sense: the only thing
to do was leave Washington.

He sold his Georgetown townhouse in a single September day, and closed on November
1. The next day was Election Day. The Republicans retook the House, and whatever chance
of holding the banks and the bankers accountable for the last crisis and so preventing
the next one was gone. That morning, Connaughton took the train to New York. He had
been asked to fill in for another Senate aide on a panel at the New York Federal Reserve
Bank, in lower Manhattan. His topic was “Financial Crisis and Financial Crimes.” There
were three hundred people in the sixth-floor auditorium—Wall Street executives, regulators,
lawyers from the district attorney’s office. He tried to distill two years of work
into fifteen minutes.

“First, was there fraud at the heart of the financial crisis?” Connaughton began.
“Second, has the law enforcement response so far achieved effective levels of deterrence
against financial fraud? Third, are federal law enforcement agencies sufficiently
capable of detecting fraud and manipulation, particularly in markets that are increasingly
complex? And finally, should Wall Street itself care about all this?”

He paused.

“In short, my answers would be yes, no, no, and yes.”

He reviewed the Justice Department’s failure to bring any high-level prosecutions,
in spite of voluminous evidence turned up by the Lehman bankruptcy examiner and the
Senate’s Permanent Subcommittee on Investigations. He talked about the SEC’s paralysis
in the face of manipulation of the stock market by high-frequency traders. The auditorium
was silent, the audience paying attention.

“Senator Kaufman’s term, and my time as a Senate staffer, ends in twelve days,” he
said in conclusion, “but this is not a fight for one senator to wage. These are questions
that go to the foundations of the rule of law and America’s future economic success.
For the common good, I hope you answer them well.”

Outside, he stood at the corner of Nassau and Wall Streets, exhilarated. He had just
blown himself up in the heart of American finance. He would never again be a member
of the permanent class.

Connaughton’s Senate job ended on November 15. He flew to Costa Rica and immediately
went out for an eight-hour hike. When he came back to his hotel room, he turned on
the shower and got in without taking off his clothes, standing under the stream and
letting it soak him and soak him until he felt clean.

2010

INCOME GAP WIDENS
 …
TEA PARTY LIGHTS FUSE FOR REBELLION ON RIGHT
 …
EXCLUSIVE DETAILS: SNOOKI DUMPED EMILIO—BELIEVES HE WAS USING HER TO GET FAMOUS
 …
@SenJohnMcCain:
@Sn00ki
u
r
right,
I
would
never
tax
your
tanning
bed!
Pres
Obama’s
tax/spend
policy
is
quite
The
Situation.
But
I
do
rec
wearing
sunscreen!
… If you don’t have money, you cling to your freedoms all the more angrily. Even if
smoking kills you, even if you can’t afford to feed your kids, even if your kids are
getting shot down by maniacs with assault rifles. You may be poor, but the one thing
nobody can take away from you is the freedom to fuck up your life.…
IT’S THE LAW OF THE LAND: HEALTH OVERHAUL SIGNED
 …
BANKS PREPARE FOR BIG BONUSES, AND PUBLIC WRATH
Goldman Sachs is expected to pay its employees an average of about $595,000 apiece
for 2009, one of the most profitable years in its 141-year history.
…
JUSTIN BIEBER FEVER HITS MIAMI
 …
CHINA PASSES JAPAN AS SECOND-LARGEST ECONOMY
 …
BOTH PARTIES SEEK WAYS TO CHANNEL POPULIST IRE
 … I’m sure there will be times in the months ahead when you’re staying up late cramming
for a test, or dragging yourselves out of bed on a rainy morning, and wondering if
it’s all worth it. Let me tell you, there is no question about it.… you don’t take
the name Barack to identify with America. You take the name Barack to identify with
what? Your heritage? The heritage, maybe, of your father in Kenya, who is a radical?
Is—really?…
99 WEEKS LATER, JOBLESS HAVE ONLY DESPERATION
 …
I’m not a witch. I’m nothing you’ve heard. I’m you. None of us are perfect, but none
of us can be happy with what we see all around us: politicians who
.…
Khloe Kardashian forgot to get a bikini wax before her husband, Lamar Odom, came to
town, so her sister Kourtney—who has been waxing herself for years—offered to do the
job. The story ended with a badly burned vagina.
…
OBAMA SIGNS OVERHAUL OF FINANCIAL SYSTEM
 …
REPUBLICANS WIN HOUSE OF REPRESENTATIVES WITH VICTORIES NATIONWIDE
 …
I never thought about love when I thought about home / I still owe money to the money
to the money I owe / The floors are falling out from everybody I know

CITIZEN JOURNALIST: ANDREW BREITBART

In February 1969—when the
CBS Evening News
with Walter Cronkite, the most trusted man in America, was watched by twenty million
viewers, or one in six households—a three-week-old baby boy of Irish descent was adopted
in Los Angeles by a Jewish steakhouse owner and his banker wife, Gerald and Arlene
Breitbart, and given the name Andrew.

When Andrew was two,
The New York Times
and
The Washington Post
published the Pentagon Papers, defying threats by the Nixon White House. The next
year, Bob Woodward and Carl Bernstein were assigned by the
Post
to cover a break-in at Democratic National Committee headquarters in Washington.
Andrew’s toddler years coincided with the golden age of Old Media.

The Breitbarts were upper-middle-class Republicans (four bedrooms, a pool, a canyon
view) living in rich, liberal Brentwood. Andrew grew up on American pop culture, British
new wave, and Hollywood celebrity. “Which famous people come into the restaurant?”
he would ask his father (the Reagans, Broderick Crawford, Shirley Jones and the Cassidy
family, lots of other celebs). Andrew took tennis lessons from the top pro in Malibu
and once spent fifteen unforgettable minutes looking for the instructor with Farrah
Fawcett.

Andrew was eleven when the Cable News Network went on the air in 1980. He was thirteen
when
The McLaughlin Group
and
Crossfire
introduced yelling heads to news analysis. From early on Andrew was a breaking-news
junkie. At the Brentwood School he made up for being neither famous nor rich by cutting
up in class and inventing droll quotations for stories in the
Brentwood Eagle
about high school social life. To keep up with his friends, he had to take a job
delivering pizzas and pocketed big tips from the likes of Judge Reinhold. Basically,
he was “the ultimate Generation X slacker,” Breitbart later wrote, “not particularly
political, and, in retrospect, a default liberal. I thought that going to four movies
a week, knowing the network television grid, and spending hours at Tower Records were
my American birthright.”

In 1987—the year that the Federal Communications Commission voted 4–0 to repeal its
own Fairness Doctrine, which had been in effect since 1949 and required licensees
of the public airwaves to present important issues in an honest and equitable manner
(a vote that paved the way the following year for a Sacramento radio host named Rush
Limbaugh to syndicate his conservative talk show nationally)—Breitbart entered Tulane.
He spent his four years in New Orleans partying with a group of wealthy, hilarious,
debauched friends, drinking himself into oblivion, and betting his parents’ money
on football games and backgammon.

In his weakened state, Breitbart was exposed to the pernicious influence of his American
Studies professors and their reading lists, which included Foucault, Horkheimer, Adorno,
and Marcuse rather than Emerson and Twain. Fortunately, he was too drunk to be thoroughly
indoctrinated in critical theory, but the prevailing philosophy of moral relativism
inevitably eroded his personal standards. It wasn’t such a big step from the Frankfurt
School to getting shitfaced nightly.

Breitbart stumbled through graduation and returned home to L.A., where his parents
cut off his stipend, giving him the shock of his life. He started waiting tables near
Venice Beach. Hard work was fulfilling. “My values were returning from exile.”

In the fall of 1991, he tuned in to the Clarence Thomas hearings, fully expecting
to side with Anita Hill and the Democrats. Instead, he was outraged that porn rentals
and a stray comment about a stray pubic hair on a can of Coke were being used to destroy
an honorable man because he was conservative and black—with supposedly neutral journalists
leading the mob. Breitbart’s eyes began to open, and hatred was born in his fun-loving
soul. He would never forgive the mainstream media.