We are reading about two firms who sold securities to the unsuspecting public while betting against same securities in order to line their pockets with ill gotten profits. In such an atmosphere, it should be tough for Republicans to block finance and banking reform.
Pundits have been writing that the Republicans might have some problems opposing financial reform because their Tea Bagger allies are so angry with the banks. But not to worry.
Minority Leader Mitch McConnell and ranking Finance Committee member Richard Shelby approached the microphones wearing the smile of the cats who had swallowed the canary. We’ve seen it before.In McConnell's case, he had exchanged the pussy cat smile for his usual simper. They were smiling because political genius Frank Luntz had given them another strategy for serving special interests while painting the hapless Democrats into another corner.
McConnell announced that the Senate Republicans were opposing the Dodd Bill because it was "another bank bail out." Later, one of the Kentuckian’s aides told the press that the minority leader had not seen the rumored Luntz memorandum. Sure!
The fact is that the Republican alternative practically guarantees endless bail-outs down the road. The Dodd Bill provides for the orderly dismantling of failed banks, using a $50 billion fund provided by the banks—not the federal government. Republicans complain that the federal government would supervise the shutting down of a bank. They claim that is a "take over" of the entire banking industry—another effective but dishonst claim.
The Republican alternative scraps the Dodd provisions for a bank shut down and calls for using ordinary bankruptcy proceedings. That would take time and litigation There is a provision that the federal government can intervene in an "emergency." We’ve seen what happens when a big bank fails; it is an emergency and the government would have to come in with piles of bail-out money. Even better for the banks—they would again be in a position to dictate to the government the terms of their own bail-out.
Given the present condition American politics and the electorate, the Republican strategy promises to be highly effective. It is deliciously devilish; the Republicans scuttle effective regulations, save the banks from contributing to a bail-out fund, and guarantee endless bailouts without appearing to do so. This Republican bail out strategy has been going on since Reagan rescued the banks with the Brady Bonds.
Only the Supreme Being knows if the Democrats are capable of countering this effective
Republican jujitsu. Unless they figure out how to frame good counter-arguments and learn to stay on message, they could take another big hit. Don’t look for the Tea Baggers or independents to check out what is really happening, and of course the mainstream media, without analysis, repeat talking points and offer no real analysis orf truth-telling.
McConnell is busy getting 41 signatures on a filibuster threat, while others, like Orin Hatch whine that the Democrats just will not negotiate. The fact is that Senator Dodd spent seven months bargaining with Finance Committee Republicans. He got a badly watered down bill and not one Republican vote to report it out of committee. Have we seen this scenario before. Hoping that reason and concern for the common good will overcome partisanship, Secretary of the Treasury Timothy Geithner is visiting Republican senators, explaining the bill’s provisions and explaining how they will be implemented.
There is absolutely no evidence that the Democrats have learned anything about message formation and control. We can also expect the Democratic Senators to accept damaging amendments from the floor and then be surprised when they garner very little or no Republican support.
The best alternative for the Democrats is to let the Republicans mount a real filibuster against banking and finance reform. Some citizens might actually come to understand that the GOP has become an obstructionist and irresponsible party.
If passage fails after a filibuster, Democrats need to divide the bill into parts and again force votes or filibusters. It is hard to imagine how the GOP could vote against regulating derivatives, but Luntz, the magician, might well pull another rabbit out of his hat.
Jon Kyl , the second ranking Republican senator, has indicated that there will be a filibuster if President Barrack Obama nominates a Supreme Court justice who opposes letting corporations spend as much as they want on political campaigns. Clearly, Republican strategists have informed their senators that continued obstruction will bring the largest harvest in November.
It is even likely that it will prove impossible to get 67 Senate votes for the new disarmament treaty.
Given this situation, the Democrats need to change their pusillanimous game plan and start getting combative. Stop making concessions in advance. Even bring up a few improvements in labor law to slow the deterioration of the unions or at least show they have friends on the Hill. If the Democrats could go down the tubes in November, do it with courage and standing for some good causes.
Pundits are saying that independents are likely to punish obstructionists. Maybe, but maybe not. At the moment, it appears that obstruction, lies, and very effective communications have swung most independents toward the Republicans. Some even became Tea Baggers.
Look for some--maybe even most-- Tea Baggers to denounce bank reform as intrusive government and another bail-out.