David Dayen wrote a very annoying article over at The American Prospect yesterday, Banks Are Too Big to Fail Say… Conservatives? The problem is that it totally accepts that conservatives care about what they claim to care about rather than looking at what they actually do. In this case, he notes that those on the left and the right claim to be upset about banks that are too big to fail. There is a fundamental problem with this, of course. The main reason that the banks weren’t broken up is that conservatives were hysterical in Obama’s first year that he was going to destroy capitalism by nationalizing the banks. Dayen even mentions Glenn Hubbard as one of the conservative economists who want to end too big to fail banks. Yet Hubbard has been one of the biggest enablers of our corrupt banking system, and no one can serious suggest that he would ever do anything that would hurt bank profits or power.
At one point, Dayen writes, “The Tea Party’s sole prescription for solving Too Big to Fail was to simply let banks collapse.” This is flat out wrong. There was no Tea Party movement following the bank bailouts. It was only when the government started to look at helping out distressed homeowners that the Tea Party burst into existence. It is true that at that time they claimed that we shouldn’t have bailed out the banks. But it was the bailout of ordinary homeowners that really got them going. They couldn’t very well go around complaining about homeowners and maintain that that banks should have been helped.
And even that early phase of the Tea Party is gone. At that time, they were at least interested in economic matters. Now they seem to be nothing but the right flank of the Republican Party. What’s more, their primary issues are opposition to reproductive rights and opposition to immigration. These are not people who care very much what the banks are doing, as long as they aren’t loaning money to pay for abortions.
Dayen then discusses Sherrod Brown working with conservative loon David Vitter to increase bank capital standards. They are presented as “strange bedfellows” who are working for an objective good. Unfortunately, as we know only too well, if their effort gets any traction, the bank lobbyists will come in and Vitter (like John McCain and many other Republicans before him) will turn on a dime against his former bill which will then be socialist and a direct attack on everything that makes America great.
What’s more, let’s not forget just how extreme Vitter is on pretty much any issue you can mention. I’m sure his concern about capital standards is just an excuse to complain about the Fed. His real problem is more along the lines of wanting to see the Fed limited and even destroyed. He is a golden example of the faux-free market conservatives who want small (or nonexistent) government when it comes to individuals and huge government when it comes to corporate welfare. Note also: he was a leader in the fight against the Franken amendment, that said that employees who were raped by other government contract workers didn’t have to submit to arbitration to get justice. That tells you pretty much everything you need to know about Vitter or pretty much any Republican.
The article repeatedly attacks the very weak Dodd-Frank bill. But no mention is made of the endless ways in which the bill was weakened by amendments offered by Republicans who always intended to vote against the final bill—and who did. In theory, there are lots of conservatives who are for a better banking system. But the moment any real changes happen that might hurt a single banker, they will turn on it. Of course, the same can be said of most professional Democrats. And that brings up an obvious question: if Republicans are really for fixing the banking system, why are they united in opposition to campaign finance reform? If we got that, then we could get real banking reform.
Liberals are constantly giving conservatives a pass on what their real intentions are. This is most evident in the belief that conservatives are for small government. Conservatives are for big government. It is just that they want all the government going to the rich. They are against safety net programs for poor families. But they are all for safety net programs for billion dollar corporations. David Vitter and the Tea Party caucus are among the very worst in this regard.