Friday, April 23, 2010

Why is the right wing noise machine so quiet on financial regulatory reform ?

Jonathan Chait and Kevin Drum are puzzled.

I have some thoughts

1) the proof that they are wrong is recent and dramatic.

Their claims about a) health care, b) climate change and c) taxes are disproven by data on a) health spending health and coverage b) global temperatures etc and c) Tax revenue changes following tax reforms. All of the proof is slow to accumulate, boring and not directly related to dramatic changes in ordinary people's experience. This time the proof that they are wrong was dramatic, recent and accutely painful. It's easy to convince people that global temperature hasn't risen (we aren't all over the globe). It's impossible to convince people that the deregulated financial system worked fine.

2a) Luntz. He is the intellectual leader of the Republican party and the conservative movement. He doesn't care about reality, policy or the issue being debated (he said "I'm a language person not a policy person" on TV). He finds out which claims convince focus groups with complete indifference as to whether they are true. The problem is that he also doesn't check if lies can be definitely proven to be lies. The claim that the resolution fund is a bailout fund is such a lie. Luntz let them down this time.

On health care reform they said "government takeover" again and again following his instructions to the letter (if my claim about what they said isn't what he instructed to the letter it's a typo). This time he handed them a pistol full of blanks.

2b) they showed their hand. People who follow politics knew that the Luntz talking point was "bailout bill." That includes the people writing the bill. They knew that their main goal had to be to make absolutely sure that the bill couldn't be described as a bailout bill. Hence the rules that the resolution authority must give nothing to shareholders and must fire top management. It is extremely bad strategy to criticize a bill before it is written. The bill was written to make it obvous that Luntzians are shameless liars.

3) there is a limit. Conservative policies have been a disaster, but none as dramatically as their approach to financial regulation (note I typed Republican and corrected it as Clinton signed the bills). Bankers who pay themselves huge bonuses and whine and complain after being rescued just can't be defended. The bankers are furious with Obama and Dodd and the claim that they are really on the same side is absurd. Sometimes reality is just to real to deny.

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