Well the Republicans have always been believers in the "free market". The freest markets always create the greatest income inequalities and ensure that people in power continue to accumulate and grow their wealth. Not sure why this is new to you. Try reading Thomas Frank's "The Wrecking Crew".
Also, banks and hedge funds are valued campaign contributors.
1: Yeah, I get free-market ideological piece. What I don't see is how opposing a fix to what helped tank the economy is savvy politics.
It's rats fucking rats all the way down, Stanley
One possible explanation for this behavior is that every single member of the Senate Republican caucus is a huge jackass.
If they succeed in blocking the bill, I assume the line of attack for the fall will be that the Democrats can't get anything done. If anyone points out that the GOP had something to do with that inability, they'll say this was because Nancy Pelosi and Harry Reid insisted on trying to pass a bill that would set up bailouts for the big banks instead of common-sense market-based regulation that the Republicans could and would have supported, or something like that. And they will say this loudly and often, and they will have a lot of money to say it with.
I don't think this will necessarily succeed, but it's not crazy.
2: It's "opposing big government"--they assume they can run that message through until November with a big assist from the feckless mainstream media. Goldman-Sachs BA-A-A-D! Federal government WORSE! It is a bit risky, but have you seen the effing generic congressional ballot recently?
Also 5. (And 4 is true as well, of course.)
I think they believe they can present themselves as champions of the regular guy, while the Democrats are for both big government and big business.
This may work because the part about the Democrats has a lot of truth in it.
Shush, peep, you're saying inconvenient things.
Republicans are the party of the capitalist elite. They're simply defending their patrons' interests.
2: What I don't see is how opposing a fix to what helped tank the economy is savvy politics.
It's not. However, it IS savvy media politics and that's what they're counting on. They think they can get away with lying about what they're doing because the media won't call them on it. And the media won't.
So the R's never get tagged for what they are actually doing, just what they say. Amazingly enough, just that gives them fits as it is. D's simply have to be as mean to the conservative politicians as the R's are to everyone else to make anything stick.
m, but lack of spine is not helping
And what do they stand to gain, aside from successfully blocking the bill, which would allow them to accuse the Democrats of "failing to regulate Wall Street" or something?
$$$$$$$$
They elephants are really working their drastically-misrepresent-reality skills on this one. They've been portraying the provisions of the bill designed to prevent bailouts as being a guarantee of bailouts.
Their strategy here is to pursue the most pro-Wall Street policies possible and then call it cracking down on Wall Street.
You silly, the meltdown was caused by Barney Frank and Bill Clinton. The Obamunists are using it as an excuse to continue their nationalization program. They figure that if they run the finance industry, along with the car companies and the entire health care industry, they can move us all the more quickly to islamosocialism. Just like in Kenya.
(1) Campaign contributions, not just getting them for Republicans, but also suppressing them for Democrats.
(2) The general public is so uninformed and the press so cowed that painting a favor to Wall Street as principled defence of small government and the free market will get significant traction.
(3) The Democrats are such a collection of hapless clowns that they could be promoting a bill that simply said "Hitler was bad" and the GOP could oppose it without significant pushback.
The upshot is that they are working every angle they can to create a big win in 2010 so they can further hobble Obama for 2012, again relying on the notion that GOP obstructionism of a Democratic president is the fault of the Democrats.
There is only a downside to this if you actually want to improve things.
Stanley,
I think you're seriously underestimating the Republican Party's ability to control the narrative while saying anything crazy to block progressive legislation.
Remember "Death Panels" from the HCR debate? Transport that back to 1978 and they'd have been crushed by the media and swept out of office. I mean, seriously, it's nothing but absolute insanity to suggest that Death Panels would actually be a part of a federal health care plan. But their insanity has become so commonplace that most of us shrug at it. To top it off, their base believes whatever the party leaders say, and the party leaders aren't properly taken to task for their horseshit-spewing by the MSM.
So defending the banks by saying Democratic legislation actually supports the banks looks like a no-brainer to me. Why wouldn't they do this?
again relying on the notion that GOP obstructionism of a Democratic president is the fault of the Democrats
Well, on that point I'm sympathetic.
I suppose I might be overestimating the risk that the Republican strategy of obstructionism on this issue will backfire.
I suppose I might be overestimating the risk that the Republican strategy of obstructionism on this issue will backfire.
You mean backfire politically? Why, because wall street is unpopular? Our health insurance system is pretty unpopular too, right? And yet total obstructionism there didn't backfire against them. (And would have been completely successful, if they'd had 41 senate votes throughout the process, as they do now.)
Why, because wall street is unpopular?
Right. Particularly in the wake of the financial meltdown, which seems like a more concrete transgression than the harder-to-point-at shitball that is the "health insurance industry".
19: I don't know--certain practices were pretty damn unpopular.
GOP 11/04/09: "We don't believe that anybody should ever be denied because of a pre-existing condition. We support legislation that prevents insurers from denying coverage as well as high risk pools that have been created to insure those who are considered uninsurable or who have chronic conditions."
They repeated that talking point, with minor variations, incessantly. Even though they obviously didn't support that at all, or even offer any plausible proposals as evidence of pretend support.
It's easy enough to craft a similar statement (they're already being massaged) w/r/t finance reform. If there's no one to aggressively call them out on it (other than Democrats, who are just being "partisan"), then they'll get away with it. It's that simple.
It's easy enough to craft a similar statement (they're already being massaged)
The one I keep hearing so far is the line about "creating loopholes for later bailouts" (which widget and helpy-chalk mentioned), which is, AFAICT, complete and utter bullshit. (You're all making me feel even more naive than I usually do.)
14 gets it right.
I suppose I might be overestimating the risk that the Republican strategy of obstructionism on this issue will backfire.
There's no chance of it backfiring. Democrats say that their anti-Wall Street legislation is anti-Wall Street. Republicans say that the anti-Wall Street legislation is pro-Wall Street. The media says that they are both half right. Republicans point out that Goldman Sachs donated to Obama and is represented by Schumer. Democrats don't hit back with anything. Republicans are inevitably swept into power, mostly because of the economic situation and partially because of the media.
21:The one I keep hearing so far is the line about "creating loopholes for later bailouts" (which widget and helpy-chalk mentioned), which is, AFAICT, complete and utter bullshit. (You're all making me feel even more naive than I usually do.)
All Holes and No Cheese ...Naked Capitalism
The Dodd bill has unlimited executive bailout authority. That's something Wall Street desperately wants but doesn't dare ask for. The bill contains permanent, unlimited bailout authority....Brad Sherman
Sets Up America For Another Crisis ...Huffington Post
Bored now
Baseline Scenario ...is a blog to read. The Republicans are simple playing their usual role as tools of mass distraction.
The extent of protection provided to management and boards in 2008-09 was excessive, but what really matters is the protection perceived and expected by creditors going forward. And this is all about whether you can credibly threaten the creditors with losses. This, in turn, is about a simple calculus - if a firm is in trouble, will it be saved?
Creditors. Bond holders. The squids put their tentacles everywhere, kind like face-monster Alien, where killing the beast will kill the patient. The question last time and next time is:"Will we let the Republic of China, Bank of France, and Texas Pension Fund to eat billions in losses when a bank loses its bets?"
Of course we won't. It isn't about saving banks but about protecting the creditors. Who the creditors are and how much they are owed will be embarrassing even if comprehensible.
Generally speaking, I think Republicans get virtually no political feedback from how the general public would react to the implications of their positions. Part is that most of the public that's not activist or partisan doesn't care; the other part is that the media doesn't have the decency to pretend it does.
really, the only way this could possibly backfire for republicans is that it pisses off senate democrats enough that they make some procedural changes
so, maybe 1 in 10 or so.
also, the 'free market' position is that derivatives shouldn't be traded on a public market, but that is somehow not the most orwellian gop talking point.
The Dodd bill strengthens the biggest Wall Street banks relative to smaller banks, and sets them up to become even bigger. As long as the Fed can open its discount window only to the biggest Wall Street banks, their borrowing costs inevitably will be lower than those of smaller firms because their debt will be safer. (This, incidentally, is also a problem posed by the liquidation fund.) So at a time when we ought to be ought to be trimming the sails of the giants on Wall Street, the Dodd bill puts more wind in them.
Remember when GM was about to go under, and all the Republicans could do was bitch and moan about how the poor bond speculators were getting screwed? Good times.
29:
Robert Reich
The Dodd bill now being considered in the Senate is a step in the right direction. Yet despite the hype, it's a very modest step. It leaves out three of the most important things necessary to prevent a repeat of the Wall Street meltdown:He then list those items 1) all derivatives on open markets 2) resurrect Glass-Steagall in its entirety and 3) cap the sizes of banks. Is the current bill so limited as to be actively harmful? Folks can decide on their own.
Is the current bill so limited as to be actively harmful?
I agree with Reich that it mostly misses the point but I don't see how it would make things any worse than the current regulations, really.
Folks can decide on their own.
No, they can't. I'm waiting for smarter people than I to tell me (not because I'm lazy, but because I just don't understand.)
32: Well, I think that scenario would be where everyone metaphorically dusts off their hands and say, "Well that's fixed", so the political problem of appearing to have done something is solved and everyone becomes dangerously complacent and no furhter steps are taken.
One of my favorite points apo made during the health-care debate was that the health-care industry wasn't crying foul. Wall Street is crying foul on this one, and that seems promising.
Chief Deputy Art Mullen:"You don't like rich people do ya Raylan"
Raylan:"Art, Nobody likes rich people."
"Art, Nobody likes rich people."
Especially the ones that talk like they earned it through 'hard work' and not so much with the pure luck.
m, cf lottery winners
I think there's a bit more truth to the "unlimited bailouts" claim than some on the left are allowing, but that doesn't mean it's not totally disingenuous. What the bill does (among many other things) is give the government the authority to step in and take over (pursuant to an orderly resolution) a much wider range of financial companies than it has been able to do in the past - pretty much anything systemically important, subject to some checks and balances that are likely to be more or less cosmetic in practice. Now, in principle, that resolution will be funded by the financial sector - preferably ahead of time, but around the world banks have lobbied furiously against pre-funded resolution funds, so I wouldn't be surprised to see that dropped. But in practice, the fund is "only" $50bn. You only have to look at AIG to see that $50bn isn't going to be anything like enough to cover a serious crisis. So in that sense, yes, it does give the potential for taxpayer funded "bailouts", whose costs will be recouped from industry after the fact. In reality, though, bailout is a rather absurd term for what the resolution regime would involve - nobody calls the FDIC's bank resolutions a bailout, and they're basically the same thing. The government would have the power to wipe out shareholders (and possibly some classes of creditors), repudiate contracts, get rid of the management and, if necessary, liquidate the company. To the extent that anyone gets bailed out, it's going to be senior creditors and/or depositors, given that usually that's the "systemically important"bit (simplifying dramatically). But again, the whole lesson of this crisis is that the government won't and almost certainly shouldn't let systemically important financial firms just go bankrupt. So what would have happened without the bill would have been a true bailout, ie an emergency loan or a capital injection. The status quo is a recipe for unlimited bailouts, especially given that other aspects of the bill are designed to reduce the number of systemically important firms.
I've got a lot of problems with the Dodd bill, and the House bill, but this isn't one of them.
Sorry for the wall of text, guys.
38: To clarify, is that the same part of the bill people more charitably call the "wind down" provision? Still trying to wrap my head around this thing.
Also, if this can double the bank-hating thread, allow me to spew some venom in the direction of Wells Fargo/Wachovia. No, Wells Fargo, when that credit card I never use happens to have a balance due of $28 for some random purchase, I don't think it's very wise for the default setting to have me pay the minimum due of $10, so that you may earn interest on the outstanding $18. And yes, you look like an asshole when you do shit like that.
38: So they won't be unlimited, and they're not bailouts, but there's more truth to that claim than some on the left allow? Who? This is the description i've gotten from the (small) sample of blogs I read.
I've
Curse you, autocorrect, you fickle bitch.
If they stockholders can lose all their money and all of management can be fired, it is not a bailout. The only thing that might be left of the original company is the name. If it will satisfy the Republicans, we can demand that that be taken away, too, so that it looks like a full liquidation.
44: it still could be a bailout of the creditors, right? (Creditors were the primary focus of the bailouts last year, and everyone was comfortable calling those "bailouts".)
> If they stockholders can lose all their money and all of management can be fired, it is not a bailout.
It can still be a bailout for creditors. If the government is paying Goldman Sachs to cover shitty bets they made with AIG, its a bailout. Which is why its super important that the Goldman Sachs' of the world be taxed heavily to pay for this upfront.
Like I say, it's totally disingenuous, especially given that the status quo is even more of a recipe for unlimited bailouts. But that doesn't mean there won't be potentially unlimited bailouts (at least of senior creditors) under the new bill, and that taxpayers will inevitably have to foot the bill in a serious crisis. It's not like the government's going to stop using its resolution authority when the fund runs dry and let, say, Citi, go bust.
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Yesterday my boss told us that if the various grants we've been awarded don't actually deliver the money soon we'll be on half pay until they do (the other half being delivered when the money arrives). Today two of the grants delivered the money. Yay!
The ironic thing is that the delay was due to the stimulus money sucking up all the time of the grant monitors, leaving the unstimulated in danger of layoffs. Why do you not stimulate me Barack? Why? Am I not stimulable? Do I not please you?
|>
He's concerned about being seen to dally with fellow Africans.
resurrect Glass-Steagall in its entirety
Repealing Glass-Steagall probably ties NAFTA for the worst thing Clinton. (Cue the reminders of the other shitty things he did.)
The Federal Reserve had already shot Glass-Steagal full of holes by the time it was finally put out of its misery in 1999. It's not like Wall Street in 1998 was really under control.
It's not that fighting for Wall Street wouldn't be bad press, or that Republicans don't realize it. They probably just figure that the die is already cast on the 2010 elections*, so the bad press won't significantly hurt them, so in the meantime why not fight for plutocracy? It's what they genuinely believe and it gets them more campaign contributions. One more two more pundits calling them out, a dozen or so more candidates not getting endorsements from their districts' newspapers, won't make up for 10 percent unemployment.
50: What's your beef with NAFTA? I'm just pissed we don't have Ameros yet.
39: Sorry for the wall of text, guys.
I liked the Wall of Text. It's true, for one thing.
m, behind the wall of sleep
BEHIND THE WALL OF ARMED AND CRAZY.
45,46: Isn't there some authority granted to give these people haircuts? I remember hearing it discussed, but, come to think of it, not recently.
Isn't there some authority granted to give these people haircuts?
Yes and no. In theory there is, but it is a constrained authority. I can go into more detail on that if you like, but it's pretty boring. More importantly, it's questionable whether this would be used in practice, at least to any significant extent. The whole point of the government receivership is to minimise contagion. What causes the most contagion? Creditors' fear that they will lose money, and creditors' creditors fears. See the AIG example for a situation where the government could have imposed effective haircuts if it wanted to, but chose not to for systemic (and arguably some other) reasons.
There's a lot of wording in the bill about shareholders and (unsecured) creditors bearing the cost of failure, but it's a lot more plausible when it comes to shareholders than it is with creditors. And in no circumstances can the government impose larger haircuts than the claimants would have received in a traditional bankruptcy.
Oh yeah, and to back up my point about the size of the resolution fund, the IMF has just proposed to the G20 that such funds should total between 2% and 4% of GDP, with more if the financial sector is larger relative to the economy than average.
So basically the US fund is 10 times too small.
Marginally semi-related, should this be getting more press?
Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.
After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would "provide an important check on unjustified premiums."
Mr. Harkin praised a bill introduced by Senator Dianne Feinstein, Democrat of California, that would give the secretary of health and human services the power to review premiums and block "any rate increase found to be unreasonable." Under the bill, the federal government could regulate rates in states where state officials did not have "sufficient authority and capability" to do so.
The White House offered a similar proposal in the weeks leading up to approval of the health care legislation last month. But it was omitted from the final measure, in part for procedural reasons.
Karen M. Ignagni, president of America's Health Insurance Plans, a trade group for insurers, said Congress should let the new law work before piling on additional requirements.
Mrs. Feinstein said her bill would close what she described as "an enormous loophole" in the new law. And she said health insurance should be regulated like a public utility.
I included the paragraph about Ms. Ignagni only because it's hilarious.
60:I lost track, but Massachusetts tried capping rates, and the insurance companies stopped offering plans. That was a couple months ago. The articles discussed monopolistic practices by providers, only hospital in town, as a cause.
Here's Hamsher on Goldman gaming the reform.
So, just as drug companies and insurers used Republicans to kill the public option before using Democrats to mandate insurance and subsidize drugs, big banks are using Republicans to kill a bank tax while using Democrats to erect barriers to entry, to institutionalize bailouts, and to restore confidence in Wall Street.He's right, of course. They carve up all the stuff they don't like, and task the GOP with demagoguing "socialism" and "fiscal irresponsibility" The Democrats get "regulation" that freezes out competition. Whoever has the "majority" gets to pick up the check.
1st paragraph Tim Carney, 2nd Jane Hamsher.
bob you should look up these peopl http://tpmmuckraker.talkingpointsmemo.com/2010/04/rent-a-front_stop_too_big_to_fail_fights_reform.php and see if you could get a blogging fellowship.
bob---They stopped offering policies through the connector, but they were threatened with fines and went back. I think that there was a judge involved somewhere.