As Democrats roll financial regulatory reform through Congress and
Wall Street banks continue to draw populist outrage, Republicans face some tough choices. GOP leaders must decide whether to maintain
their firm opposition to all things Democratic, which would risk allying them with ever-unpopular Wall Street, or to join the Democratic
reform campaign, which would risk handing Democrats a major victory on the
eve of national elections. If GOP obstructionism on health care worked
politically, it was largely due to the reform plan's middling
popularity. But voters are much more bullish
reform. What's a minority party to do?
- GOP May Be Coming Around
The Washington Post's Brady Dennis
and Shailagh Murray report, "Key Senate Republicans on Tuesday began
to back away from their sharp criticism of proposed new financial
regulations and expressed optimism that a bipartisan deal on a bill that
would drastically change the way Wall Street operates could emerge in
the coming days." Why? "The change in tone came as the Security and
Exchange Commission's lawsuit against Goldman Sachs for allegedly
defrauding investors continued to dominate headlines, underscoring
public anger at Wall Street and reminding lawmakers of the potential
consequences of inaction."
- Dems Losing Messaging War The New York Times' Paul Krugman looks at the PR
battle, which he says Republicans may well win. "My understanding is
that Obama officials have looked at the polls, which show that the
public overwhelmingly favors cracking down on Wall Street; so they
assumed that the GOP wouldn’t dare stand in the way. But they seem not
to have learned, even now, that the right has an awesome ability to
create its own reality: that Mitch McConnell et al would stand in the
way of reform while claiming to be taking a stand against Wall Street."
- New Republican Tactic: Be Vague The Washington Post's Ezra Klein muses, "The only
specific policy they've mentioned has been the $50 billion liquidation
fund. And though I think the fund good policy, you could remove or
restructure it without doing much harm to the rest of the bill. So as
with a lot of these legislative battles, we're not really having a
policy argument here. Republican policy objections are vague enough that
it'd be easy for them to change the bill slightly and declare victory.
Simultaneously, their objections are vague enough that it'd be way for
them to continue opposing the bill because it's a permanent bailout for
reasons they never really explain."
- How They Won The Battle
Over Resolution Fund EconoBlogger Economic of Contempt uses
Democrats' proposed $50 billion resolution fund as a case study.
Democrats supported it, Wall Street opposed it, and it once looked
certain to become law. "Enter Mitch McConnell. As soon as McConnell
started loudly calling the $50bn pre-funded resolution fund a 'bailout
fund,' and made opposition to it a Republican litmus test, everyone started
distancing themselves from the idea. And now a pre-funded resolution
fund is all but dead. Amazing."
- GOP Already Softening
Regulation Liberal blogger Matthew Yglesias laments
"recalcitrant Republicans are keeping us from getting tough.
Recalcitrant Republicans are the means through which it becomes
the case that the government doesn’t get tough." He notes as an example
that, with a recent House regulatory bill, "a minority faction of
Democrats was able to weaken the bill" because of the GOP's unified
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