Our junior senator is doing a heck of a job. Really

[pscot]

When Maria Cantwell braced Senator Ted Stevens over ANWR drilling, she got my attention. She continues to impress. Very nice article by Robert Kutner.

http://www.prospect.org/cs/articles?article=wall_street_meets_its_match

In the showdown over the regulation of potentially toxic securities like credit-default swaps, the savviest and toughest battler for effective legislation turns out to be not Barney Frank or Chris Dodd, who chair the key House and Senate financial committees. Surprisingly, the best informed and most relentless crusader is a back-bench senator from Washington state, Maria Cantwell. If you want to see how one determined junior legislator can make a difference, Cantwell is your woman.

Cantwell, a big booster of Barack Obama, is determined to push his administration to deliver on fundamental reforms to the financial system -- and dismayed by what she's seen to date from Obama's staff. "If there are people at the Treasury and the White House who think that the way to get the economy going again is not to close these loopholes," she told me in an interview, "that's disgusting."

Cantwell, who just turned 51, is a former tech executive who won a squeaker of an election in 2000 by less than one-tenth of 1 percent of the vote. She is the kind of senator who is even better informed on the details of a complex issue than her highly competent staff. Washingtonian magazine once dubbed her a "Hill hottie," but in her efforts to reform the black holes of the financial system, and in her little-known but critical role in health reform, her undeniable charm is far less important than her tenacity and brains.

She tends to win arguments not with bluster or horse-trading but with deep knowledge of her subject and a refusal to be bluffed or to back down. For example, during the October markup of health-reform legislation in the Senate Finance Committee, Cantwell crafted an amendment, modeled on a Washington state program, that would allow states to negotiate with insurance companies on the terms of coverage for those eligible for subsidies and for other citizens buying in. By giving the government bargaining power, her amendment salvages some of the cost-containment goals of the more contentious "public option." And the committee adopted it by consent. "Senator Cantwell has done amazing work," her colleague Sen. Charles Schumer of New York told the committee. "The unsung hero of this bill is her amendment on costs." Moves like this are the hallmark of the truly effective legislator.

But the most lasting impact of her diligent approach to public policy is likely to come from her crusade for financial reform, particularly the fight over regulation of derivatives. Derivatives are securities at one or more layers of abstraction from real economic transactions. A mortgage loan, for example, is a real transaction. A bond backed by a sub-prime mortgage loan is a derivative. A package of such bonds is an even more abstract derivative. And a credit-default swap, which is an insurance policy against such packages of bonds going bad, is four levels removed from financial reality. At each stage of abstraction, derivatives invite pyramids of leverage and huge speculative profits for insiders -- as long as the bubble keeps inflating. When the bubble bursts, the losses can be as infinite as the capital is infinitesimal.

"Maria knows the complex issues pertaining to financial regulatory reform like the back of her hand, and she courageously uses that knowledge to combat the high-pressure lobbying by Wall Street," says Michael Greenberger, a former deputy to Brooksley Born, the Clinton-era regulator who tried to sound alarm bells about derivatives as early as 1998. Born, however, was ostracized by the rest of Clinton's economic team -- which included Larry Summers, now the top White House economic official. One of Summers' current deputies, Gary Gensler, was part of the team that boxed in Born's proposals suggesting the need for tighter government monitoring and regulation of swaps and other derivatives.

"There's a few people in the administration who still can't say that it was a mistake, and those are the same people, I think, who are slow-walking, thinking we're all going to forget about this regulatory reform that is needed," Cantwell said at a hearing in May. "I can assure you that we're not going to

[eridani]

1. Here's hoping she goes after Geithner and Summers

Useless parasites.

[pscot]

2. She seems to have Geithner in her sights

She said on Dylan Ratigan's program that Timmy should be removed. She's smart, and she does her own thinking. Her voting record puts her at the liberal end of the spectrum. She seems rather aloof. I think people have a hard time figuring her out.

[eridani]

3. I've had serious problems with her Iraq war vote

Also voting for the PATRIOT Act and repeal of estate tax. However she's been stellar on energy issues and financial regulation. and anyway, why would we want Slade Gorton? I'm glad she put an end to his political career, but unfortunately not to his lobbying career.

[pscot]

4. I thought Slade ended his own career

when that bald head of his disappeared down a stairwell with a bunch of seniors in hot pursuit. With regard to Cantwell's Iraq war vote, her hold on her job was pretty tenuous early on. No doubt some of her votes were based on expedience rather than principle. Even George Washington did the political thing from time to time.