Reich: The Republican Strategy on Financial Reform: Make Democrats Look Like Patsies for the Street

[flpoljunkie]

The Republican Strategy on Financial Reform: Make Democrats Look Like Patsies for the Street
TUESDAY, APRIL 13, 2010

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 who had spent many weeks negotiating the bill with Dodd, 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 — “Dodd jerked the rug out from under Sen. Corker and went back into a partisan bill” — 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. The strategy is surely the handiwork of Republican pollster Frank Luntz who for months has been telling Republicans “the single best way to kill any legislation is to link it to the Big Bank Bailout.” (See Luntz’s memo.)

Let’s be clear: The Dodd bill doesn’t go nearly far enough to rein in the Street. It allows so-called “specialized” derivatives to be traded without regulatory oversight; its capital requirements are weak; it gives far too much discretion to regulators, who, as we’ve seen, can fall asleep at the switch; it does nothing about conflicts of interest within credit rating agencies that rate the issues of the companies that put food on their plates; it puts a consumer protection agency inside the Fed whose consumer bureau didn’t protect consumers; it doesn’t do anything to control the size of banks; it delays dealing with other hard issues by assigning them to vaguely-defined “studies;” and, yes, it preserves the possibility that the Fed could launch another bank bailout.

But the Street thinks the Dodd bill goes way too far, and wants its Republican allies to water it down with more loopholes, studies, and regulatory discretion. 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. It was the bailout that “really got this ball rolling,” says Joseph Farah, publisher of WorldNetDaily, a website popular among Tea Party adherents. “That’s where the anger, where the frustration took root.”

more...

http://robertreich.org/post/519339473/the-republican-strategy-on-financial-reform-make

[SpiralHawk]

1. D'oh

Who didn't see this stanky strategery coming?

The republicons are famous for dropping their stink bombs, and then pretending innocence while pointing fingers elsewhere.

"He who smelt it, dealt it."

[Turbineguy]

2. Seems to be working around here.

[nykym]

3. And no one in the Democratic Party

has the sense to link this new direction to the fact that the Repug bloodsuckers are whoring for Wall Street as long as they funnel contributions to them.

[TomCADem]

7. Um, Obama and Reid Have Been Blasting Them On It...Sure, Fox News Ain't Playing It...

It seems like the metric is that if the corporate media does not play it on endless loop, then no Democrats is reponding. But, the truth is...

Earlier, Dodd angrily accused Republicans of "political chicanery" and appeared on the verge of abandoning talks.

"My patience is running out, my patience is running out," he said from the Senate floor. "I'm not going to continue doing this if all I'm getting from the other side is the suggestions somehow that this is a partisan effort."

Aides said Senate Republican Leader Mitch McConnell in the meeting urged Obama not to cut off bipartisan talks. Afterward, McConnell still insisted that the Senate bill "will lead to endless taxpayer bailouts of Wall Street banks."

That was the message McConnell delivered earlier Wednesday on the Senate floor -- the second such attack on the bill in as many days. He said the White House plans the same approach on financial reforms that it took on health care: "Put together a partisan bill, then jam it through on a strictly partisan basis."

White House economist Austan Goolsbee dismissed the GOP objections as "totally disingenuous."

"Bailouts are forbidden," he said in an interview. "There will only be wipeouts. They (the banks) will clean up the messes. If somebody fails, they're done -- they're toast. The management is fired. They're broken up or sold off or liquidated."

[backscatter712]

4. Democratic response is simple:

"Oh, you want us to make regulation of Wall Street stronger? NO PROBLEM!!! We'll throw a big press conference on how Republicans and Democrats both came down strong on the Wall Street robber barons! What, you're opposed now? Let's see you explain that..."

[ej510]

5. PROJECTION!!!!!

[Cali_Democrat]

6. Exactly

call their bluff.

[depakid]

8. And watch the hapless Dems play along and get tagged!