The new memo instructs opponents of financial reform to simply lie about reform legislation, and to twist economic anxiety resulting from the recession into fear of any government effort to fix the underlying cause of the financial crisis. The most dishonest argument is that financial reform would “punish” taxpayers while rewarding “big banks and credit card companies.” In reality, top financial industry lobbyists are not only fighting proposed oversight regulations, but have said recently that they are opposed to “any regulation” at all.
Luntz, ever the publicity hound, leaks his memos out to the media to claim credit for the Republican charge against reforming Wall Street. While he is certainly a driving force behind much of the GOP misinformation, a closer look at his client list reveals that he is in fact being paid by the finance industry:
— Luntz client Ameriquest Mortgages: The proposed Consumer Financial Protection Agency (CFPA) would eliminate predatory mortgages. Ameriquest, America’s “sub-prime leader,” has been prosecuted by Attorney General Richard Blumenthal for inflating property values so borrowers could get bigger loans, imposing upfront fees without reducing interest rates as promised, and intentionally deceiving lenders with hidden penalties and interest rates on final loan documents.
— Luntz clients Merrill Lynch and Bear Stearns: Under proposed financial reform, big banks, like Luntz clients Merrill Lynch and Bear Stearns, would face a new structure designed to police financial products, prohibit predatory ones, and require clear forms and disclosures. The CFPA would also help regulate hidden bank fees and other bank abuses.
— Luntz client American Express: The CFPA would regulate the credit card industry, preventing predatory interest rates and fees.
Nearly every attack recommended by Luntz is not grounded in reality. For instance, he calls for opponents of reform to label a CFPA head an “unaccountable” “czar.” But the legislation clearly states that the CFPA’s Director would be appointed by the President, and then confirmed by the Senate. Luntz also charges that reform advocates are behind “lobbyist loopholes” in the bill. However, the most controversial loophole was inserted by Rep. John Campbell (R-CA), whose amendment allows an exemption for auto dealers. Of course, Campbell still tried to kill financial reform once it arrived on the House floor.
Confusing the public is the point of Luntz’s work. In an interview explaining his smears against health reform, Luntz told the New York Times last year that it did not matter what the actual policy offered — he would still call it a “Washington takeover.”