Where does the Republican Party stand on banking reform?
It is becoming abundantly obvious that Obama’s domestic agenda will have to come on the back of partisan support if it has any hopes of passing. This is particularly true for banking reform. In the past month or so we have seen a groundswell of support for breaking up the big banks starting in the most unlikely of sources – free-market evangelist Alan Greenspan. The banks, expectantly, have fired back with how this will be irresponsible and put the economy at further risk. Main Street has countered with appropriate anger as news of bonuses going to bailed out bankers flash dominate headlines while they struggle with an unemployment rate of 9.5%.
Of course there have been other voices, Senator Chris Dodd (D-CT) has gotten behind trying to break up the big banks. His efforts come in an election year where he is trailing Republican Rob Simmons by 11 points. Trying to get populist support when his campaign pockets and sweetheart mortgage deal still leave the smell of bank coffers will be difficult to accomplish. There is also the historical voice of Republican President Teddy Roosevelt who was the biggest, baddest breaker-upper (poetic learners-permit) of monopolies in American history – He dealt with an overgrown JPMorgan over a hundred years ago.
Then there is the Tea Partiers. This Glenn Beck inspired group of right wing populist have a laundry list of government spending programs they would like to see eradicated. But where exactly do they stand on banking reform? They were clearly against bailing out the banks in the first place. Now Dubya is against the TARP bill and it was his signature that brought it into law. Where does this put the Republican Party? The far right believes its wrong to prop up big banks due to free-market loyalties. The Republican populist Tea Party movement (which Foxnews claims on a daily basis is the mainstream – “real america”) does not believe in using taxpayer dollars to keep the country’s financial institutions afloat. So far that is two factions of the Republican party who don’t agree with bailing out the banks, but do not offer any solution (even in retrospect) of how to handle banks that are too big to fail.
Just as a reminder the TARP bill the bailed out the banks was passed 74-25 (33-13 among Republican Senators). What do the 33 Republicans who threw their support behind government intervention and gave a “yea” to TARP think about breaking up the banks? Perhaps, more importantly, what alternative do the 13 “nay” voters have? Is it to let the economic system fail in a free-market vacuum that sucks the credit and capital out when these big banks fail? Does not sound like a great alternative, but without a voice in this debate what can we assume?
Let us not forget about the Republican party base – the evangelicals. What is the opinion of the evangelical right? Does God have an opinion on banking regulations? Matt Phillips over at the WSJ wrote a great piece last week examining the big banks latest tactic to enlist the support of this strong voter base. Among some of the gems are Goldman Sachs Chief Executive Lloyd Blankfein’s saying “he is doing God’s work”, and Barclays CEO John Varley speaking at London’s Anglican St. Martin-in-the-Fields Church saying “profit is not satanic”. Will this have an effect in galvanizing a stronger popular voice in support of letting the too big to fail banks maintain the status quo? I doubt it.
The interesting aspect of this discussion has not been the shortcoming of our politicians or the holier than thou comments of bankers, but the shortcomings of the public discourse to create a substantial dialogue about an issue that crippled the economy and continues to effect every person in the country.
Are Republicans afraid of the calls of “RINOS” from Rush Limbaugh if they support the break up of the banks? Why haven’t any of them come out and offered any dialogue on this issue. The time for opportunistic oppositionism are over. Right now, even Alan Greenspan is resolved in the notion that absolute capitalism is good in theory only and that safeguards must exist to stop greed and protect our economy. Where are you Republicans? Let your voice be heard.
