Mitch McConnell's Populism

by Jonathan Chait | April 13, 2010

Even by the standards of politics, Republican opposition to financial reform is unusually shameless. The GOP party line, in keeping with the postmodernist stylings of Frank Luntz, is that they oppose financial regulation because it's a big handout to the financial industry. Here's Mitch McConnell:

This bill not only allows for taxpayer-funded bailouts of Wall Street banks; it institutionalizes them. “The bill gives the Federal Reserve enhanced emergency lending authority that is far too open to abuse. It also gives the Federal Deposit Insurance Corp and the Treasury Department broad authority over troubled financial institutions without requiring them to assume real responsibility for their mistakes.

Of course, McConnell has no plan to prevent future bailouts. You couldn't possibly design a plan to bind future officeholders from taking action to prevent systemic collapse. That's why he's meeting with the financial industry and promising to do its bidding:

About 25 Wall Street executives, many of them hedge fund managers, sat down for a private meeting Thursday afternoon with two of the most powerful Republican lawmakers in Congress: Senate minority leader Mitch McConnell of Kentucky, and John Cornyn, the senior senator from Texas who runs the National Republican Senatorial Committee, one of the primary fundraising arms of the Republican Party.
The stated topic of the meeting: The Financial reform bill being sponsored by Senator Chris Dodd, the Democrat and chairman of the senate banking committee. Both McConnell and Cornyn listened to numerous complaints the executives have with the bill. These included complaints about provisions that allow the government to continue to prop up financial institutions that are “too big to fail.” ...
In the meantime, they need to increase numbers of Republicans in both the House and the Senate if they are going to make an impact on not just this bill, but other measures to increase Washington’s control of the financial business. To do that they need the support of the financial community. At one point McConnell quoted something he attributed to Democrat Barney Frank, the chairman of the House Financial Services Committee. McConnell, according to a person who was present, said “Barney likes to say ‘Wall Street used to say we have Washington by the (neck), and we’re going to change that.’”

So the Democrats are saying that Wall Street has too much power over Washington and they intend to change that. Republicans are citing this promise to Wall Street, requesting that Wall Street helps elect more Republicans so they can allow Wall Street to continue to wield power over Washington. And their public line is that they oppose regulation that Wall Street opposes because they're against handouts for Wall Street. It doesn't get a whole lot more brazen.

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