Belfast Telegraph

Friday 1 August 2014

When foes back the banks, Obama has reason to smile

Republicans are set for big gains in November’s mid-term elections. But financial sector reform could be their downfall, writes Jim Dee

As Republicans continue to fight tooth and nail to delay Democratic-sponsored legislation to curb the Wall Street shenanigans that triggered the 2008 global economic meltdown, one could imagine Barack Obama lifting his head heavenward to whisper, “Thank you!”

Last month, the Grand Old Party was riding high. Sure, Obama and Co had passed a diluted version of their healthcare reform dream.

But Republican obstructionism and scaremongering succeeded in gutting its most progressive facet — a government-run public option — and the year-long battle had bruised Obama politically.

And, with its base seemingly re-energised by the fight, many pundits have been predicting that November’s mid-term elections are shaping up to be a harvest of plenty for the Republicans.

But the party of big business has already blundered en route to the winner’s circle.

With 15 million people unemployed — 8.5 million of them having lost their jobs since December 2007 — Americans of all stripes remain furious about Wall Street’s toxic culture of greed. They want heads to roll — particularly those of the Lords of Finance who reaped mountains of riches both during the good times and during the government bailouts in the meltdown’s aftermath.

So why on earth would Republicans be so foolish as to appear to be carrying Wall Street’s water on Capitol Hill?

Only their strategists know for sure, but the answer could lie in good old fashioned arrogance.

Having spun many Americans’ heads around to great success with false claims that ‘Obamacare’ was the thin-edge of the socialist wedge, they may now see the masses as theirs for the moulding.

Yes, John Public hates big bankers. But, if Republicans cleverly craft their message, he’ll vent his anger on the Democrats and Obama at the polls.

Hence, reading from a script |prepared by Republican talking-points guru Frank Luntz, the GOP has employed ‘day-is-night’ rhetoric to paint Democrats as eager to keep the bank bailout button primed and ready for the pushing for years to come.

To make matters worse, Republicans claim, Democrats will further balloon the already massive federal deficit in order to enforce the reams of new regulations. And, |Republicans warn, small businesses could be fatally smothered by any new consumer watchdog.

The proposed raft of financial reforms is indeed complex. But the key proposals include: bolstered oversight of the $605 trillion derivatives market; a fund to help dissolve big institutions on the verge of collapse; and a new consumer protection bureau to police lending in areas such as credit cards, home mortgages and car loans.

Last month’s Republican filibuster in the Senate must have seemed like a great idea when it began, but then a Washington Post/ABC News opinion poll showed that Americans favour tighter Wall Street restrictions by a 63% to 29% spread and the proposed new consumer watchdog enjoyed 59%-38% support. Oops!

So, in spite of the assurances of svengali message man Frank Luntz, maybe Americans aren’t as malleable as Republicans think.

For example, a Gallup poll released last month showed that 75% of Americans still blame George W. Bush for the dire state of the economy. Importantly for Obama, 63% of independents — on whom his 2012 re-election bid may rest — blame Bush as well.

Over the last 50 years, if a president’s approval ratings are below 50% (as Obama’s now are), the opposition party usually gains ground in the mid-term elections.

As such, the Republicans’ gaffe hasn’t sunk their prospects by any means.

But November is still a long way off. And, rest assured, there will be plenty more opportunities for Republican own-goals yet to come.

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