Back in January, Frank Luntz wrote a memo saying that the best way to defend Wall Street from any new regulation was to spuriously characterize efforts at regulatory reform as leading to “endless bailouts.” Then earlier this week, GOP Senate leaders Mitch McConnell and John Cornyn met with leading bankers and promised to defend their interests, asking only for huge sums of cash in exchange. Today, all 41 Senate Republicans have signed a letter promising to oppose the Democrats’ Wall Street reform bill with none of them offering any alternative proposals of their own.
They claim that the bill “allows for endless taxpayer bailouts of Wall Street and establishes new and unlimited regulatory powers that will stifle small businesses and community banks.”
Of course the status quo already allows for endless taxpayer bailouts. The point of the new regulatory powers it to (a) prevent the need for bailouts and (b) provide an alternative process to bailouts. The banks aren’t paying McConnell to put a stop to bailouts, they’re paying him to prevent the regulations that might stop bailouts.
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