New Lie On Bank Reform

Dave Johnson

Opponents of financial reform, after huddling with banking lobbyists, are now circulating a story that the reform bills are nothing more than more bailouts for the big banks. In fact the bills do the opposite, and have a mechanism for shutting banks down instead of bailing them out in the future.

But the bank lobbyists and their paid-for allies in the Congress understand that the public just hates the bailouts, so they are trying to direct that hatred to try to kill a bill that would … prevent bailouts. Here’s how it works: If focus groups showed that the public overwhelmingly loathed green cheese, the reform opponents would be circulating a story that a bill to regulate green cheese actually forces everyone to eat it. Until the public catches on that this is how lobbyists and their allies work, this is how the game will be played.

From yesterday’s story, House Democrats Defend Effort to Rein In Wall Street,

Republicans, trying to emphasize an issue that strikes a chord with conservatives, said the creation of a new $150 billion fund to dissolve failing businesses would mean a continuation of the bailouts that have sparked public anger.

The fund is for use dissolving banks, not bailing them out. It helps get rid of the idea of too-big-to-fail. But the bank lobbyists don’t want their too-big-to-fail perks to go away, so they want to kill this bill. To do this they spread lies, tell the public the bills do the opposite of what they do, grease the palms of corrupt legislators, and generally degrade the idea that we have a democracy and rule of law.

Why are these huge, corrupt financial corporations allowed to lobby using taxpayer bailout dollars? And why do we have a system that allows corporations to get anywhere near the rulemaking process for regulating corporations? Obviously the big corporations will change the rules to give themselves further advantage, and then use that advantage to further change the rules, giving themselves even further advantage – rinse and repeat forever.

This is one more example of certain members of Congress hiring themselves out for a corporate marketing campaign, like when they ran that coordinated “drill baby drill” campaign with the oil companies. (Read a great joke at the link.)

As I wrote above, this will continue as long as it works for them. But once the public catches on that this crowd will say anything – really anything – to trick people into letting them get away with their low-wage, everything-to-the-top economic schemes maybe nonsense like this won’t work anymore.

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