On Monday morning, I attended the opening session of the Campaign for America's Future annual ProgFest, and as I noted at Mother Jones, the crowd was much smaller than previous years--the price of success, naturally. Moreover, the Obama White House showed the progs little love. Neither Barack Obama nor Joe Biden are speaking at the three-day gathering, and only three administration officials are dropping by. That's not a lot.

One of those three was Jared Bernstein. The opening panel was supposed to feature him and Nobel Prize-winning economist Joseph Stiglitz. I thought that could be a hot face-off. Stiglitz is critical of the Larry Summers-led economic bailouts of the Obama administration; Bernstein, a liberal-minded, working-class-oriented economist, would have to support administration policies. For policy wonks, this could have been Ali vs. Frazier.

I hate posting stories on Friday afternoon. They can easily fall into the black hole of the near-weekend. So while I'm traveling, let me promote two pieces I had to put up on Friday because that's when the news happened.

First, after a White House briefing on Barack Obama's new Afghanistan policy, ambassador Richard Holbrooke, the special envoy for Afghanistan and Pakistan, continued to talk to the reporters in the room. Prompted to address the opium trade's impact on the potential for success in Afghanistan, he called for "a complete rethink" of the war on drugs in Afghanistan and suggested that he was hardly gung-ho on the poppy eradication program there. So is Holbrooke off the (anti-drug) wagon? He did note that the review process had not been able to produce any consensus on this knotty matter. You can read my full account of Holbrooke's comments here. Holbrooke's remarks certainly deserve follow-up.

Later, in the day, banking CEOs had a lunch with Obama. Afterward, they spoke to reporters and said that the meeting had been been full of frank and productive exchanges and that they and president agreed that "we're all in this together." Trying to cut through the spin, I asked these finely attired bankers if they owed the American public an apology for having helped to screw up the financial system that all of us depend on. None of them seemed eager to field that question. But Kenneth Lewis, the president of Bank of America, did step to the microphone and said, let's stop talking about the past. Read all about it here.

After seeing the article about the non-apology, Robert Wright of Bloggingheads.tv sent me an email noting that these guys (and they are guys) have a lot for which to apologize. He included some clips from an interview with William Cohan, author of House of Cards, a take-down of Bear Stearns. Here they are:

For months, I've been waiting for populist rage at the economic collapse and the subsequent bailouts to explode and cause political fallout. In fact last September I thought there was a chance John McCain, looking for a game-changer, would oppose the (first) Wall Street bailout as a conservative populist and reboot and reenergize his campaign. McCain made a few head fakes in that direction, but ultimately he chickened out.

In the months since, politicians on both sides of the aisle have bitched and moaned about Wall Street and the assorted bailouts under way, but no one has truly ignited a populist crusade against those big-money players who have ruined the economy and their pals in Congress. In January, a consultant told me that he had conducted focus groups with Americans of different economic standing, different party affiliations, and different levels of education, and that he had found that few of them were willing to express any anger at either Washington or Wall Street. Many, he noted, had said that perhaps they had spent too much money on things they really didn't need. He was quite surprised by this. No matter how hard he tried to stir up populist resentment--with loaded questions--he couldn't get that sort of a rise of these people.

So where's all the outrage? MSNBC's First Read newsletter has an interesting take on this:

Rage Against The Machine: Anger at Wall Street and at America's financial institutions has been simmering for a while now -- the numerous bailouts, Bernie Madoff, and Jon Stewart vs. CNBC have been just a few examples. But with the news over the weekend that AIG, 80% of which is now owned by the federal government, is awarding millions in bonuses to executives has most likely turned that anger into a furious boil. As the New York Times' Nagourney writes, this populist backlash presents a huge challenge for an Obama administration that might have to hand out additional bailouts to further stabilize the banking industry. ("The biggest risk is that we don't have the political will," Fed chairman Ben Bernanke warned last night on "60 Minutes." "We don't have the commitment to solve this problem, and that we let it just continue.") But the populist rage also might present a bigger challenge to the political party that's more associated with big business, less regulation, and tax cuts for the wealthy. In fact, if there was a time for the Obama administration and Democrats to push to let the Bush tax cuts to expire, to press for the Employee Free Choice Act (or "card check"), or to institute new regulations, this is the time, right? Still, now's a time when everyone in Washington is suddenly going to be channeling his/her inner-populist. Who will have the most credibility doing it? As for the short term, Congress is going to want a pound of flesh (and then some) from AIG. Obama also will discuss AIG during his remarks today.

The White House does have to make a careful calculation. It does not want to end up on the wrong side of a populist wave. And Obama and his aides know this; recall his not-yet-detailed proposal to cap executive compensation and perks. But at the same time, Obama has to fix the system--which means he has to work with the institutions that caused the damage. It's tough to bash and build at the same time. (Obama, no doubt, will be slamming AIG for awarding bonuses to the execs who lead the company to ruin.) The Obama gang has demonstrated that it can thread political needles. But this will continue to be a tough one. Moreover, there will continue to be an opening for Republicans--if any have the spine to go for it.

There's a lot going on these days: a presidential transition, numerous confirmation hearings, various appointment announcements, and assorted megabucks bailouts--not to mention a couple of wars. But my favorite item of the day came from the publicity office of the American Enterprise Institute. AEI sent out an email announcing an event next week:

Is Deregulation a Cause of the Financial Crisis?

During the recent campaign season, the Democrats blamed the financial crisis on "Republican deregulation," in particular the Gramm-Leach-Bliley Act of 1999 (GLBA) and the Commodity Futures Modernization Act of 2000 (CFMA). The GLBA repealed the provisions of the Glass-Steagall Act of 1933 that prevented affiliations between commercial and investment banks, and the CFMA, among other things, exempted credit default swaps and other derivatives from regulation by the Commodity Futures Trading Commission. Although both acts were backed by the Clinton administration, Senator Phil Gramm (R-Texas)--then the chairman of the Senate Banking Committee--was the key congressional sponsor of the legislation. Is it plausible to connect the GLBA and the CFMA with the current financial crisis?

And guess who is going to address this question? Yep, Phil Gramm.

I think I can safely say that a piece I wrote last year put into political play the notion that Gramm, who had been an adviser to McCain, helped grease the way to the subprime meltdown by using a backroom maneuver in late 2000 to pass the Commodity Futures Modernization Act, which deregulated swaps, a complex financial instrument used to support various sorts of financial deals. And there's not much question that the rapid growth of the nontransparent swap market contributed to the subprime debacle.

These days, Gramm is a well-paid executive at Swiss banking giant UBS, which has blamed its own financial troubles on swaps.

When I was working on that article last spring, I contacted Gramm. But he declined to talk--and he went on to become something of a lightning rod for McCain in the summer when he dismissed Americans' concerned with the economy as "whiners." Now that the campaign dust has settled, he's ready to discuss all this. I'll make a bold prediction and say that his presentation is going to go something like this: it wasn't me.

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I have a day of medical stuff to do today--nothing serious--so I'll be brief.

Remember weeks ago, when a small number of public voices were counseling to go slow on the $700 billion bailout for Big Finance? They said there was--despite Treasury Secretary Hank Paulson's urgent pleas--no need to rush. They said that Congress ought to hold hearings and examine various alternatives to Paulson's blank-check plan. They said that the Bush administration and the Democrats in Congress (including then-presidential candidate Barack Obama) were merely throwing money at a problem without proceeding in a deliberate manner. You can see here for examples of such naysaying.

Well, they (which includes me) were right. Take a gander at the top of the front page of The Washington Post. To the right, you will find a story reporting:

Treasury Secretary Henry M. Paulson Jr. announced a series of moves yesterday that redefine the federal government's $700 billion rescue plan for the financial industry in order to tackle what he called a dire situation in the consumer credit markets.

In recasting the program, the Treasury no longer plans to buy troubled assets from financial firms, the idea initially presented to the country, but instead will offer aid to banks and other firms that issue student, auto and credit card loans in part by jump-starting the market that provides financing for these companies.

That is, Treasury is taking those hundreds of billions of taxpayer dollars Congress gave it and now using it in a completely different manner than it said it would. Maybe this will be a better deployment of those bucks. Maybe it won't. But shouldn't there have been some public debate or discourse about the shift? Whose money is it, anyway?

Next, shift your eyeballs slightly to the left, and you will see a related article reporting:

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

Get the picture? The program was misdirected, is being redirected, and has no oversight. By the way, it will probably cost more than the $700 billion first mentioned.

It is a mess. A gigantic mess. Just one of the several George W. Bush (with the help of Congress) is bequeathing Obama. The new president and his people better have some good ideas for making it work better. For even though it was made in the Bush administration, if this quasi-con game continues along this present course after January 20, Obama will own it.

Remember when Bill Clinton in 1996 pronounced "the era of big government is over"? Liberals were incensed that a Democratic president would bolstered Conservative Talking Point No. 1 and would accept the fundamental tenet of Reaganism.

Well, it turned out Clinton was sure wrong about that. Today, Big Government is on the march, with a Republican administration spending hundreds of billions of dollars to bail out Wall Street and to partially nationalize banks. So while we wait for the final presidential debate of 2008, here's a question to ponder: is Reaganism dead? Short answer: you betcha. From Bloomberg:

The main reason the $700 billion bailout bill failed in the House is that the Republican leaders, who were working with the Democratic leaders to pass the bill, could not count. They did not round up enough of their comrades for the bill; one hundred and thirty-three House GOPers said nyet to what some of them considered to be socialism. But the bill also failed because 95 House Dems would not go along with Hank Paulson's Billions-for-Bad-Paper plan, when alternative approaches were worth considering. (I refer to some of those options here.) And a leader of a subset of these Democrats--dubbed the Skeptics Caucus--has been Representative Brad Sherman.

Sherman attracted several dozen members to a series of meetings and briefings this past weekend, as the bill was being negotiated by others. As he left Congress after the vote on Monday, he told me that the most effective argument he made was that the bailout bill was darn weak when it came to recouping the taxpayers' $700 billion. He cited a memo he circulated among colleagues that pointed out that taxpayers were not likely to see that money--either in profits from a future selloff of the bad assets the Treasury would buy from Big Finance Firms or in a revenue bill (meaning some sort of tax on the finance industry). In other words, he challenged Paulson and his own party leaders on a fundamental of the bill: this is not a handout, but a timely investment.

What's going to happen now? The safe bet is that the D and R leaders in the House will tweak the bill or offer enough inducements to individual members (a bridge, anyone?) to win over 13 members to insure passage of the legislation. That is, there won't be a wholesale revision of the basics. So the revenue issue may remain hot. And Sherman expects to come back to Washington later this week to keep the battle going. Here's the memo he disseminated:

TAXPAYERS HIGHLY UNLIKELY TO RECOUP ANY OF THE COSTS -- Brad Sherman 9/29/08

We know that the Bailout Bill allows million-dollar-a-month salaries to executives of bailed-out firms, and it allows hundreds of billions to be used to buy toxic assets currently held by foreign investors. But we are told: "don't worry, this $700 billion bill won't cost us anything. We will get it all back next decade through a revenue bill."

I. Section 134 of the Bailout Bill merely says that the President must submit a revenue bill to Congress in 2013 that recoups from the financial industry the taxpayers' net losses.

a. If the President has any revenue ideas he actually likes, he would submit them to us anyway.
b. If the President submits revenue ideas only because he is forced to by Section 134, he will send it to us with a note saying that he believes they are bad for the country, and reserves the right to veto.
c. The Bailout Bill does not automatically enact any revenue increases, nor protect a revenue bill from filibuster or veto.

II. Congress is unlikely to pass a tax increase bill of hundreds of billions of dollars in 2013.

a. Tax increase bills are anathema to many.
b. 41 Senators can block the plan. We're giving Wall Street enough money to hire 4100 lobbyists.
c. In recent years, Wall Street has easily defeated every attempt to close every loophole that they exploit, no matter how pernicious-even the abusive use of Cayman Island tax havens by hedge fund managers, who thereby pay zero tax.

III. Any tax on the financial industry would make the good banks pay a huge tax so we can recoup what we gave to the bad banks.

a. Section 134 says the tax will be on "the financial industry." It does not provide for a tax on just those firms that received bailout payments.
b. A bank that doesn't get a bailout payment still pays the tax.
c. Community banks and perhaps credit unions will also be subject to the tax, so we can recoup what we gave to Wall Street.

IV. It is impossible to draft a tax that hits only those firms that received bailout payments, and even more impossible to draft one that taxes each bank in proportion to how much money we lost on its toxic assets.

a. There are no provisions to even keep track of losses on each asset purchased as it is managed over the years. Assets purchased from several
banks will be pooled, managed, and sold together, and we can never know how much we lost on assets purchased from any one bank.
b. If three banks in the year 2013 have the same income and size and operations, they will all pay the same tax-even if one got no bailout payments, a second got a million dollars, and a third got a billion dollars.
c. Many bailed-out firms won't exist in 2013.

1. Some will go under.
2. Some bailed-out firms are only shell companies. Example: Assume the Bank of Shanghai has $30 billion in toxic assets. It will sell these to the tiny subsidiary it has incorporated in California. The subsidiary will then sell these to the Treasury in 2009, and will be dissolved long before 2013.
3. Many bailed-out firms will still be unprofitable in 2013.
4. Some bailed-out firms will move offshore before 2013.

d. The whole purpose of the bill is to improve the balance sheets of the bailed-out firms. If particular bailed-out firms owe us the money they receive, they would have to list this as a liability, and the bill would fail to improve their balance sheets.

In 2013 we will not pass a tax bill that imposes hundreds of billions of dollars of taxes on the financial services industry, including those banks that got no bailouts, community banks, and credit unions. A tax bill imposed only on those entities that got bailout payments is impossible to draft, and contrary to the purposes of the Bill.

If it were easy to pass a bill to recoup hundreds of billions of dollars through taxes to be imposed in 2013 and thereafter, then provisions imposing such taxes would be in today's bill.

Wall Street gets their money now, and we get it back never.

The below item was posted shortly before the House voted against the $700 billion Big Finance bailout 228 to 225. Ninety-five Democrats joined 133 Republicans to bring down the bill. And Representative Brad Sherman was one of those Democrats.....

For my money, the $700 billion bailout plan is being rushed through Congress with too much haste. There's been little debate of the plan's basics and not much consideration of alternative approaches to the administration's preferred choice: buying up the bad paper of Big Finance firms that screwed up royally. Yet few in Washington--including John McCain and Barack Obama--want to go out on a limb. Any politician who stands up to Wall Street and opposes this thing has to fear being blamed should the plan not go through and the financial meltdown worsen. In politics, there's safety in numbers. So if everyone jumps aboard and this plan doesn't work out, nobody stands to lose politically. It's the safe political play: get on the train with everyone else.

But there are some legislators who are saying, slow down. House Republicans tried to put on the brakes last week. But their alternative--cut taxes--was a non sequitur. On the Democratic side, Representative Brad Sherman has pulled together a Skeptics Caucus. He drew 30 or so House Democrats to meetings on the weekend. Not enough to block the Paulson Express. But not an insignificant number. And Sherman released a memo detailing his objections to the bailout.

Since there's not much media coverage of the Slow-Down crowd, allow me--as a public service--to post the full document right here, The taxpayers need more, not less, of a debate, before allowing the Bush Administration to start a $700 billion spree.

From Rep. Sherman:

A review of the first Obama-McCain debate, originally posted at Mother Jones....

No memorable exchanges. No historic zingers. No gotchas. The much-anticipated first face-off between Barack Obama and John McCain resolved little. Neither candidate strayed from their usual briefing books. The talking points were recycled. McCain blasted Obama for being a rookie in the ways of national security. Obama questioned McCain's judgment, notably his initial support for the Iraq war.

They both played it safe. Especially when it came to the hot topic of the night: the $700 billion bailout plan for Wall Street. It was no surprise that moderator Jim Lehrer would lead off with the issue, even though the focus of this debate was supposed to be foreign policy. And in his first question, Lehrer asked each candidate to state where he stands on the "financial recovery plan." Neither would get specific. Obama cited the need to move "swiftly" and "wisely." He called for effective oversight of the plan, taxpayer protections, and guarantees the money spent would not reach the pockets of CEOs. He pointed to the current meltdown as evidence of the failure of economic policies supported these past eight years by George W. Bush and McCain. It was standard fare.

McCain noted he was heartened by the bipartisan negotiations under way in Washington. He, too, cited the need for accountability. He mentioned the possibility of adding a provision to the package that would allow the federal government to offer loans to troubled institutions rather than buy their bad paper. Neither one, though, fully endorsed the plan--or raised any objections. Asked if he would vote for it, McCain said, "I hope so." It was a strong signal he would not be mounting any from-the-right populist crusade against the proposal.

But each candidate exploited the bailout queries. Obama tried to tie McCain to Bushonomics. McCain hailed his own efforts to curtail pork-barrel spending on Capitol Hill. Obama slapped him for focusing on $18 billion in earmarks while supporting $300 billion in tax breaks for corporations and wealthy individuals. McCain accused Obama of being a tax-hiker. Obama countered--correctly--that his tax plan provides far more relief for taxpayers making less than $250,000 a year than does McCain's proposal.

It was as if they were eager to talk about any economic issue other than the details of a gargantuan bailout that may or may not work and that may or may not be popular come Election Day.

On foreign policy, the candidates dished out the expected lines. McCain touted the surge in Iraq and slammed Obama for having ever doubted the wisdom of the wonderful General David Petraeus. Asked for the lesson of Iraq, McCain said, rather inelegantly, "You cannot have a failed strategy that will then cause you to nearly lose a conflict." Obama assailed McCain for supporting Bush's grand distraction and having failed to recognize that the job in Afghanistan ought to have been finished first. He connected the ongoing Iraq war bill--$10 billion a month--to the nation's current economic woes.

On Iran, McCain derided Obama for wanting to hold talks with President Ahmadinejad (whose name he mispronounced a few times before getting it right), claiming such a move would practically send a signal that the United States approves of a second Holocaust. Obama defended his policy of engagement, noting that there were other Iranians to speak to besides Ahmadinejad and that the Bush administration has recently broadened its diplomatic approach when it comes to the ol' Axis of Evil. McCain claimed Obama had been indecisive at first in reacting to the conflict in Georgia. Obama echoed McCain's tough stance against Russia, but cautioned that the United States could not revive a Cold War approach because it still has to deal with Russia on the pressing matter of loose nukes.

In talking policy, both men came across as knowledgeable. McCain truly perked up when he got the chance to discuss the strategic importance (as he sees it) of the Caucasus region. Obama demonstrated confidence in his ability to challenge McCain on the strategic importance of the Iraq war. But, indubitably, many viewers of the debate would score these exchanges in accordance with their preexisting opinions of the two candidates. As for those knotty undecideds, there was no specific assertion that an analyst could point to and say, "This is going to stir them."

Once the debate ended, the television commentators immediately tried to assess the impression each conveyed. McCain did come across as somewhat condescending. He barely looked at Obama and almost seemed annoyed to have to be talking foreign policy with that other guy. He tried to put Obama down by charging that Obama did not know the difference between a tactic and a strategy. He slapped him for not supporting funding for the troops. (Obama voted against an Iraq war funding bill that did not have a timetable for withdrawal--just as McCain voted against a funding bill that did.) And McCain sent one straight shot at Obama, saying, "I don't believe that Senator Obama has the knowledge or the experience" to be commander in chief.

That was no knockout punch. And Obama kept his now-famous cool. He did not swing too hard at McCain. Several times during the debate, Obama said that McCain was "absolutely right" about the point under discussion. Obama did question McCain's temperament, noting that McCain had threatened extinction for North Korea and had once jokingly sung a song about bombing Iran. But McCain, in response, pointed to his opposition to Ronald Reagan's deployment of Marines in Lebanon as proof he can be trusted to make prudent decisions about war. (That is, he's no warmonger.) McCain noted he wears a bracelet honoring a U.S. soldier killed in Iraq as a reminder of his pledge to that soldier's mother to do all he can to insure her son's death was not for naught. Obama replied that he, too, wears a bracelet--given to him by the mother of another fallen soldier who asked him to make sure no other parent loses a son in vain. He was calm; McCain was pugnacious. How that plays is hard to assess. It's truly a matter of taste.

There was much buildup for this debate. For weeks, members of the politerati looked forward to it as a defining moment in the campaign. The big question: would Obama be able to display commander-in-chief cred? Then McCain's shenanigans--pulling out, jumping back in--added to the drama. The big question: would he be prepared? And would Obama be able to take advantage of the last-minute shift to economic matters? But the debate ended up a straightforward affair, with no twists, no turns. Commentators could score it any way they wanted. Obama held his own on national security affairs, so give him the nod. McCain did the same on economic matters, so maybe he won over the 27 American voters who have yet to decide. You can look at it this way: given that Obama has been ahead in the recent polls, McCain lost by failing to beat him to a bloody pulp. Or this way: McCain survived what many analysts considered to be a bad week for him.

In any event, it's on to the next main attraction: the Biden-Palin duel on Thursday. Then there will be two more Obama-McCain debates. But who knows what other crises will hit between now and November 4 that will force the candidates to react to the real world? In fact, this past week demonstrates that the candidates' responses to events beyond their control may be more important in determining the outcome of this election than the debates. Fancy that: reality trumping political theater. It happened this past week. And in the next six weeks, it could do so again.

Driving to work (late) this morning, I was listening to The Diane Rehm Show on NPR (plug: I'll be on Friday morning), and I heard a comment that almost caused me to strike a pothole. The topic of the day was the financial crisis and the under-construction bailout, and Simon Johnson, a senior fellow at the Peterson Institute for International Economics and former IMF economic counselor, commenting on the $700 billion package being thrown together on Capitol Hill, said, We're more in the realm of "chaos theory than economic theory."

Wow. And whoa. This rush to save Wall Street's backside is not only unseemly but perhaps perilous. Yesterday, Peter Orszag, the director of the Congressional Budget Office, testifed that the bailout could worsen the ongoing economic crisis. And even if the Democrats succeed in crafting a package that includes necessary provisions regarding accountability and transparency, CEO compensation, bankruptcy reform, and mortgage protection for homeowners, there are still plenty of questions about the overall approach of this bailout: the feds using taxpayer dollars to buy lousy assets from poorly-run companies to keep these poorly-run companies afloat. There are alternatives. The federal government could lend money to needy financial institutions instead of buying their crappy assets. Or it could buy better assets and pump money into the financial system that way. My Bloggingheads.tv sparring partner Jim Pinkerton advocates restructuring the entire financial sector to make sure none of its major players get too big to fail. Economist James Galbraith (a regular Mother Jones contributor) proposes pouring half a trillion dollars into the Federal Deposit Insurance Corporation (to preserve depositors' confidence in banks and prevent a run), putting $200 billion in reserve so the Treasury, if necessary, can buy preferred stock in banks to recapitalize these institutions, and waiting to see what happens. That is, let the folks who screwed up do what they can with their bad paper. Galbraith notes that serious economic problems will remain, but the threat of systemic collapse would be abated.

The point is that the Paulson path is not the only one. In fact, it may be the wrong one. Certainly, a few days--or a week or two--of debate and discussion before committing $700 billion would not be unwarranted. "We need more than three days to sort this out," Simon Johnson said. And he's right. The Democrats in Congress ought not be force to quick, decisive and misguided action by the we-must-act-today pronouncements from George W. Bush and others in his administration. On Thursday, John McCain said "time is short" and that a deal must be completed before the financial markets open on Monday. Barack Obama should reply: not if it's a bad deal.

Obama certainly wants to--and needs to--come across responsibly. (Who wants to be blamed for the crash of an entire sector?) But this train is probably moving too fast for the public. Slowing it down to get the response right could be a twofer: good policy and good politics.

As Barack Obama turns from overseas issues to economic matters--with a scheduled meeting on Monday in Washington with economic leaders--I noted elsewhere that there was a potent economic issue waiting for Obama: economic transparency. Referring to the subprime meltdown, I noted:

So here's a populist issue for Obama: the U.S. economy is too important to be placed in the hands of wheeler-dealers who in the shadows engage in transactions that have the potential to send waves of harm throughout the highly-interconnected financial world. Americans are entitled to feel insecure when they see that the economy can be so severely affected by a few big firms that go off the reservation, thanks to the imaginative machinations of a small number of traders. More transparency, more regulation--whatever the policy prescriptions are (and they will be technical and hard for most of us to understand), Obama could by addressing this issue gain a political advantage over John McCain, who tends to celebrate the workings of the markets.

Then I came across a story in Monday's Washington Post that was headlined, "Transparency Sought as Speculators' Activity in Oil Market Grows" and that reported:

Big Wall Street firms representing the interests of pension funds, endowments and wealthy individuals around the country have grown in just a few years from minor participants in the oil markets to their most dominant force.

These financial firms -- whose holdings of oil contracts are now larger than the collective demand of airlines, trucking firms and other companies that need oil to run their businesses -- have become the focus of an intense debate in Washington over whether their exponential growth is contributing to the surge in oil prices.

The agency that regulates commodity trading has been tracking some of the activities of these investors. But a year and a half ago, the Commodity Futures Trading Commission decided to keep that information secret, rebuffing thousands of requests from industry groups and individuals to make the data public. The CFTC noted in a report that only one group supported this decision: the International Swaps and Derivatives Association, which lobbies on behalf of the Wall Street firms.

The biggest financial speculators, called swap dealers, trade "futures contracts" that allow them to make money by betting on the price commodities will fetch in the future. They rarely take delivery of the goods themselves. In 2000, swap dealers held about 140,000 oil contracts, according to CFTC data obtained by a House Energy and Commerce Committee investigation. That has surged to about 1.8 million today, including a three-fold jump since 2006.

Here's an instance when a small number of those wheeler-dealers may be having a serious impact on the economy and the financial health of households across the United States, and the regulators take the side of the speculators and allow them to continue their trading far from the prying eyes of the public.

This is a good--and populist--issue for Obama and the Democrats. Regulators ought to be working for the public, not industry. And transparency ought to be the rule. During the W. years, unregulated segments of the economy that are cloaked in secrecy--such as the swaps market--have grown in size and significance. It's time for pushback.