So the Senate is preparing for a vote to debate financial regulation legislation, and a partisan slugfest with potentially large electoral consequences is fully underway.
Democrats hope they have gotten Republicans into a tight space that will finally make them accountable for the contradiction between pro-corporate policies and populist rhetoric. The GOP, with its anti-bailout rhetoric, has already worked hard to make voters forget that TARP and other financial community bailouts were their own party’s idea, imposed by their own president and supported by their own party’s congressional leadership. But since their opposition to tough regulation of the financial sector is a lot less ambiguous than their opposition to bailouts, its opposition to the present legislation poses more than a small problem, since even voters who aren’t crazy about government regulation of the private sector generally are largely in favor regulation of the financial sector.
The GOP’s solution has been to oppose regulation as–surprise, surprise–bailouts! That’s why the White House is reportedly pushing for the removal of a “liquidation fund” from the bill that was the only real connection in reality to the Republican claims that it would create “endless bailouts.” Moreover, Democrats have made a lot of hay out of meetings between Wall Street potentates and GOP Members of Congress, who have created a more-or-less united front against the regulatory initiative.
The latest twist and turn in this war of words is also pretty interesting: instead of denying their strategerizing with Wall Street, Republican congressional leaders are simply claiming that Democrats take money from Wall Street, too! The fairly transparent aim here is to muddy the waters, reinforce preexisting public perceptions that both parties are in bed with Wall Street, and then count on general anger with “Washington” to give them victory in November.
It’s a pretty cynical but rational strategy, but it’s not clear it will survive a Republican filibuster against the main tangible effort to regulate Wall Street since the financial collapsse, much less a protracted fight between now and November. Certainly Democrats have a big stake in blowing away the smoke and exposing the real positions of the GOP on financial regulation, and needless to say, in going the extra mile in keeping their own political petticoats clean and starchy on this subject.