Of course, in the beginning, health care reform was a political winner for Democrats as well. Then, as the debate progressed, it turned toxic for Democrats. This one is not as clear. That's because neither side really has a clue on financial reform. On health care reform, Democrats presented a government expansion for health care reform. Republicans presented a free market solution. That will win every time.
On this debate, it's not clear what either side is doing. So far, the debate is entirely in soundbites. Furthermore, while Republicans presented clear alternatives on health care reform, so far they've only presented criticism on financial reform. Both sides run risks in presenting nothing but soundbites. For instance, Republicans have fixated on the $50 billion fund as proof that this is nothing more than more bailouts. Well, what if that fund is removed?
In fact, the biggest problem with this bill is that it allows the Treasury Secretary to come into any financial institution and take it over if the Secretary deems said institution too big to fail.
If the financial regulation bill that passed the House last year becomes law, President Obama and his Treasury secretary will acquire the right to take over any financial institution they wish to, provided that, in their sole opinion, it is both "too big to fail" and on the brink of insolvency. The House bill provides for no judicial review and does not require any objective evidence of imminent failure to trigger the takeover provisions.
Once the government takes over such a company, it will acquire the right to replace the entire board of directors, fire the management of the company, wipe out stockholder equity, and even sell off divisions of the company.
If the Republicans are to oppose anything it is this provision. That's a stunning increase in power and yet it is Dick Morris leading the charge against this provision. Opposing this would continue with a larger theme that President Obama is dangerously increasing the scope and power of the federal government. It also continues the theme that Obama is engaging in behavior that is not rooted anywhere in the constitution.
Yet, Republicans have become fixated on a fund that can easily be removed. Meanwhile, Obama simply says that anyone opposed to his bill is siding with Wall Street. He says that our current regulatory structure is not sustainable. Yet, he's never once explained or analyzed what is in the bill itself.
He tried a similar argument in health care reform and failed. He said we had to pass Obamacare because health care was broken. Just because health care is broken doesn't mean Obamacare is the solution. He gives Republicans an opportunity to pick apart his proposal.
For the most part, Republicans have not taken advantage of this opportunity. That's because financial reform is frankly above all their heads. The recent Goldman Sachs civil indictment is a great example. Goldman Sachs is charged with fraud. Yet, Democrats think this is timely for financial reform.
With the Senate scheduled to begin debate on a financial overhaul bill this week, the fraud suit against the Wall Street titan Goldman Sachs has emboldened Democrats to ratchet up pressure on Republicans who oppose the Obama administration’s proposal.
Once again, Democrats have given Republicans an opening and Republicans aren't smart enough to figure it out. Goldman Sachs is charged with fraud. That's already not legal. There needs to be no new financial reform to curb this behavior. Instead, there needs to be better enforcement. More rules only makes it more difficult to enforce. Goldman Sachs is yet another example of the fact that our bureaucracy failed to enforce the rules we have not that we didn't have enough rules.
In fact, financial reform is infinitely more complicated than health care reform. That was easy. This is very hard. Because in fact both sides are equally clueless both their soundbites will be effective. Neither will be anywhere near the truth. Neither side will likely be able to explain their side in a way the public can understand. That will leave the public confused and distrustful of both sides. That will make it a political loser for both. So, Republicans may as well oppose it. They won't get hurt opposing it because Obama won't be able to get past soundbites in explaining it. Without that, the public isn't going to jump on board.