But mass opposition has been the staple of the Republican strategy towards Obama so far, and early indications are that they won’t be any more helpful with the plan to reform the banks:
SEN. JON KYL (R-AZ): Let’s not be finding a bogeyman so that we can turn public attention away from what they’re doing wrong in the administration.
REP. SCOTT GARRETT (R-NJ): If we want the banks to lend, and we all do, if we want the economy to expand, and we all do, do you really want to start confining the banks and their ability to make profits in order to generate more capital to lend out to the people?
SEN. JOHN THUNE (R-SD): They think if they can create enough animosity toward Wall Street and corporate America, they get into this traditional sort of Democrat rhetoric and tap into the populist anger out there. For Democrats to be successful they’ve got to create a sense of class warfare and an us versus them mindset.
The names being thrown around the most as potential Republican targets for the administration are Sen. Richard Shelby (R-AL), who was the only Republican to vote against repealing Glass-Steagall in 1999, and Sen. John McCain (R-AZ), who along with Sen. Maria Cantwell (D-WA) has introduced a bill reviving Glass-Steagall.
But Shelby already toyed with the Democrats about approving the creation of a Consumer Financial Protection Agency (CFPA), only to lambaste the idea later as “folly and dangerous.” McCain responded to the Obama plan by saying “it seems to me that a number of the proposals [Obama] has move in [the right] direction, but I haven’t had a chance to examine the details.”
Garrett’s statement, meanwhile, basically implies that a profit earned in any fashion — whether its by ripping of unknowing consumers or gambling with federally insured money — is alright by him. But it’s not really the level of profits that we’re talking about here at all — it’s the way in which they were earned. Profits of the sort Wall Street has been seeing in recent years are only achievable by amassing a huge amount of risk, which is backed by American taxpayers because the institutions involved are systemically important. It’s the merging off traditional deposit banking and commercial lending with a hedge fund mentality that is the problem Obama’s plan seeks to address.
“There’s no denying that banks have made a significant move from traditional commercial lines of business, like individual and small business lending, into higher-risk/higher-return investment banking lines like proprietary trading,” said Sen. Kirsten Gillibrand (D-NY). “If we hope to avert the type of catastrophic meltdown we witnessed last year, we must contain the levels of risk and activities the big banks undertake.” And if the GOP wants to play defense for Wall Street, let them do it, so long as they actually have to take votes affirming that position.