GOP Gives Itself a Black Eye on Wall Street Reform

This morning, the Rothenberg Political Report moved 44 seats to the GOP. "Substantial Republican gains are inevitable, with net Democratic losses now looking to be at least two dozen," they say. "At this point, GOP gains of 25-30 seats seem likely, though considerably larger gains in excess of 40 seats certainly seem possible." Democratic gains in the last two election cycles give a healthy buffer zone -- 254 Democrat to 177 Republican -- so even Rothenberg's worst case scenario wouldn't change control of that chamber. But still, if it pans out to anything even close to that number, that's huge.

For their part, Democrats are described as "giddy" -- not over the prospect of losses, but at the fact that the GOP seems determined to limit their own gains through boneheaded, kneejerk obstructionism.

[Talking Points Memo:]

About a week or two. That's how long Republicans have to decide how they ultimately want to play their hand on financial regulatory reform. According to numerous Democratic aides and key senators, the GOP will either have to join forces with Democrats on a bill that hews very much to the White House's demands, or they'll have to do their best to block a bill that enjoys wide popularity. But as much as Democrats want to change the rules that govern Wall Street quickly and smoothly, they also love the politics of moving the bill forward without GOP support and letting Republicans publicly justify their decision to protect hated financial institutions from the regulations they oppose.

"We are ready to go forward. The bill's ready...if I have to go it alone, I'll go it alone.... I'm ready to go to the floor tomorrow if they want." said Senate Banking Committee Chairman Chris Dodd last night, after a brief meeting with his counterpart, Sen. Richard Shelby (R-AL).

House Republicans are signaling that they're more than willing to follow the lead of their Senate colleagues. "Democrats are beginning a new season of spending on Capitol Hill and a new season of bailouts," Rep. Mike Pence, chairman of the House Republican Conference, said. "This so-called financial services bill is nothing more than a permanent bailout, creating a massive multibillion dollar fund that will take the bad ideas of TARP one and turn them into the permanent ideas of TARP two." It's this kind of talk from Senate minority leader Mitch McConnell that has Senate dems so giddy. Imagine how happy House dems must be to hear it from Pence.

Adding to the GOP's problem here is the Tea Party. This teabagger thing has gotten out of the party's control and, as recent history shows, tea partiers aren't very hesitant about screwing Republicans. Polling shows that teabaggers -- like pretty much everyone else -- don't really like Wall Street bankers all that much. They may hate them some big gummint, but it's great when it comes to regulating (or punishing) big bankers.

"[R]ecent polling has shown that Wall Street bankers are almost as unpopular with Tea Party types as President Obama," reports strategist Robert Creamer.

"In fact, the upcoming vote presents traditional Republican defenders of Wall Street with a serious political problem," he continues. "It's not just swing voters who could be alienated by their defense of Goldman Sachs, JP Morgan Chase, CitiCorp and the like. Their votes could substantially diminish the enthusiasm of their base."

Democrats couldn't wait to capitalize on Republicans' love for the same companies that so recently blew a huge hole just above the waterline of our economy, nearly sinking us all. McConnell's stated reason for opposing Wall Street reform -- that it institutionalizes bailouts -- is pretty much insane. So Democrats went out of their way to show that it was based more on focus-grouped fearmongering than anything close to truth.

It had to happen eventually and it's surprising it hadn't sooner; a strategy of opposing everything is a strategy of opposing good ideas. It's also a strategy of doing nothing in the face of very serious problems. It absolutely had to blow up in their faces sooner or later. Republicans have been complaining a lot, but other than that, what have they got? What have they done?

For their part, Democrats seemed to have learned the lessons of the healthcare reform debate; that Republicans are shameless liars, that they have no interest in addressing the problems facing Americans, and that if you don't shoot down even the most ridiculous lies, the media will repeat them over and over until enough people believe in crap like "death panels." And move fast. Where the healthcare debate took about a year, the Wall Street reform vote is expected as soon as next week.

As a result, GOP opposition to Wall Street reform already seems doomed to failure. Democrats will score a victory with popular legislation, while collecting video clips of various and sundry Republicans saying completely insane things about that legislation. Those clips will come back in campaign ads -- not only as an example of lying GOP goofiness, but as an example of how they defend a corrupt and anti-competitive status quo.

The bad news here is that Republicans are still probably going to take a lot of seats. The good news is that they won't be enough to change control of congress and that Republicans are trying their damnedest to screw up even those gains.


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