« Taxes over Time | Main | Paul Romer: Persuasions and Norms »

Wednesday, April 14, 2010

Reich: The Republican Strategy on Financial Reform

The audacity of nope:

The Republican Strategy on Financial Reform: Make Democrats Look Like Patsies for the Street, by Robert Reich: Senate Republicans today debuted their new strategy for financial reform: Refuse to cooperate with Democrats on grounds that the Dems are too willing to give Wall Street what it wants.
I’m not making this up.
In a Senate floor speech Minority Leader Mitch McConnell said Republicans couldn’t support the legislation that emerged from Chris Dodd’s banking committee because it “institutionalizes” future taxpayer bailouts of the Street, giving the Federal Reserve “enhanced emergency lending authority that is far too open to abuse.” Senator Bob Corker, a senior Republican on the committee..., huffed that Dodd’s final bill provides “the ability to have bailouts.”
Sen. Lamar Alexander, a member of the Senate Republican leadership, blasted Dodd for partisanship ... that is, partisanship toward Wall Street. Alexander said Republicans will hold out for a plan “that would end the practice of too big to fail and that would make certain that we don’t perpetually use taxpayer dollars to bail out Wall Street.”
Republicans have been looking for a way to oppose Senate Dems on financial reform without looking like patsies for the Street. And now they think they’ve found it — by trying to make Democrats look like patsies for the Street. ...

Let’s be clear: The Dodd bill doesn’t go nearly far enough... But the Street thinks the Dodd bill goes way too far... Republicans figure they can accommodate the Street by refusing to give the Dems the votes they need unless the Dems agree to weaken the bill — while Republicans simultaneously tell the public they’re strengthening the bill and reducing the likelihood of future bailouts.
It’s a bizarre balancing act for the Republicans, reflecting the two opposing constituencies they have to appease — big business and Wall Street, on the one hand, and the emerging Tea Partiers, on the other. The Tea Partiers hate the Wall Street bailout as much as the left does. ...
I have a suggestion for Senate Democrats: Don’t let them get away with it. Smoke the Republicans out. Respond to their criticism that the Dodd bill leaves open the possibility that some future bank will become too big to fail by amending the bill to limit the size of banks to $100 billion of assets — so no bank can become too big, period. Challenge the Republicans to join you in voting for the amendment. If they decline, force them to explain themselves to their local Tea Partiers.

    Posted by on Wednesday, April 14, 2010 at 12:24 AM in Economics, Financial System, Politics, Regulation | Permalink  Comments (12)


    Feed You can follow this conversation by subscribing to the comment feed for this post.