JONATHAN CHAIT APRIL 22, 2010
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Yesterday I commented on the miraculous nature of the sudden revival of financial reform. One other key element in this upsurge is the intellectual disarray on the right. Conservatives do not know what to say or think about this. A few of them are calling for breaking up the big banks. A few more are following the Frank Luntz line that regulation is a big favor to Wall Street. But mostly they're saying... nothing. It's almost a non-issue at the National Review and Weekly Standard blogs.
You can see why the issue would pose problems for the right. First, it threatens the self-image they've developed over the last year as opponents of the government-business nexus. Second, it's difficult to work out a free market response. If you let Wall Street invest however it likes, it will eventually precipitate a financial crisis, with massive government intervention being the only option to save the economy. Or else you can break up the big banks, or limit their ability to take on systemic risk. Either way, government has to get involved at some step in the process. It almost seems like conservatives can't choose which form of government intervention to accept, so many of them just aren't choosing.
In any case, the lack of a coherent conservative analysis is probably one cause of the GOP's retreat.
3 comments
I'd say it's a clash between the economic populist portion of the GOP vs. the big-business/Chamber of Commerce types. The first group has all the 'base', with all the votes, and likely wants to see big financial institutions punished. The second group wants none of that. They can't be seen as supporting the big financial outfits as that will rip the party apart. For once this is playing out for the better of the republic. I hope.
- tnmats
April 22, 2010 at 11:22am
This Catch-22 has Republicans tied in knots. The Frank Luntz approach was so transparently absurd that it didn't manage to sprout wings. I predict the silence will mostly continue in the right-wing blogosphere and in their periodicals. The Republican Congressional leadership will have to decide how to deal with financial reform. Their Party of No stance isn't exactly setting the American public on fire and they shut themselves out of any role concerning the health care bill by going down this road. Now, they seem to be reconsidering and how this will all play out will be fascinating to watch.
- liberal reformer
April 22, 2010 at 11:24am
Why should they mention it? It's a scenario that only plays out for the benefit of Democrats. It looks like McConnell & Co. pushed the Frank Luntz-based objections on behalf of the financial services lobby for a week, got clobbered on it and is now just trying to keep his head down and move on to more fruitful ground like immigration reform and cap-and-trade (or whatever it's called these days). This is an issue where Republicans can give the Democrats and win and then work as fast as possible to change the subject to something where anyone outside Wall Street executive suites is sympathetic to them.
- wildboy
April 22, 2010 at 11:36am