Say it: ‘Permanent TARP bailout.’ Now repeat. 

I would just like to piggyback on Michael Barone’s earlier analysis of the Dodd financial reform bill. There’s a line of common wisdom that Republicans, having shown a bend-don’t-break opposition to health care reform, would be pushing it too far to unite against the next item on President Obama’s agenda: reform of the nation’s financial regulations.

There is merit to this argument. Moreover, many of the worst aspects of the financial reform bill from the business perspective (such as “plain vanilla”) have been removed. The problem on Wall Street is real, and the public is aware of this, so resistance to reform might seem like resistance to needed change.

This is why Republicans would do poorly to oppose the Dodd bill by merely arguing — for example — that nothing is being done to solve the problems at Fannie and Freddie, or that a consumer protection regulator would be at odds with a financial soundness regulator. At best, that kind of talk puts people to sleep. Instead of trying to resist or ameliorate the public’s anger with the financial world, Republicans should be harnessing it.

As Barone alluded, the Dodd bill creates a $50 billion slush fund to “reorganize” — read: “bail out” — large institutions that are failing. Republicans, if they are wise, will oppose this version of financial regulatory reform on these very grounds. It calls on the Main Street taxpayer to bail out the Masters of the Universe (and their European creditors) yet again. What they really need is to go bankrupt. The Dodd bill — call it “TARP III,” if you like — sides with big business and against free markets.

And please, please, do not use the words “too big to fail” when you talk about this bill. Most people don’t understand what that means — they’re just as likely to take the phrase literally as they are to know it really means “too big to let fail.” Just call the Dodd bill what it is: a permanent TARP bailout.

As in: If the permanent TARP bailout is not removed from the bill, Republicans should not support it. Don’t let the Democrats get away with demonizing their Wall Street backers and bailing them out at the same time. Give no quarter — as they retreat from their pyrrhic victory on health care, pursue and rout them.

About The Author

David Freddoso

David Freddoso came to the Washington Examiner in June 2009, after serving for nearly two years as a Capitol Hill-based staff reporter for National Review Online. Before writing his New York Times bestselling book, The Case Against Barack Obama, he spent three years assisting Robert Novak, the legendary Washington... more
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