I can’t even pretend to know what all the hubbub regarding Goldman Sachs is about right now. I know they’ve been accused of somehow profiting from the collapse in the housing market but, frankly, my eyes start to glaze over at the word “shorting.” I also know that after ten hours of a Congressional colonoscopy yesterday, it was revealed that to the best of anyone’s knowledge Goldman Sachs didn’t do anything illegal. Maybe immoral…maybe…but nothing against the law.
But while the finer details of this brouhaha are merrily sliding over my only slightly interested head, I’ve seen enough of the world of politics to know a witch hunt when I see one.
Questions have been raised about how neatly the Goldman Sachs affair ties into the Senate’s push for financial reform, and without any insider knowledge, I’m guessing the questions are legitimate. To me it just brings to mind the decision to make a huge fuss over the weapons being housed at a religious nutjob’s compound in Waco, Texas at the same time that the Clinton administration was all over the television talking about the need for stricter gun control. The timing of these events is a little too good to be coincidental. Fortunately, yesterday’s hearing ended only with a metaphorical roasting of the Goldman Sachs representatives.
So really, this is nothing more than bread and circuses for people looking to blame someone, anyone, for the fact that the economy’s been in such a deep recession. The Democrats, not without some justification, have handed the pitchfork and horns to Wall Street while the Republicans, not without a great deal of justification, are placing the blame on Congress…well, on the Democrats in Congress. The Dems are trying to portray the Republicans as being in league with the devils of Wall and Broad, while the Republicans are trying to portray the Democrats as being power hungry bureaucrats looking to regulate and control everything. Kids, kids…you’re both right!
They’re also both wrong. The Democrats are being amazingly disingenuous because, as Michael Franc reveals on NRO, they’re even more beholden to Wall Street than the Republicans are. Barack Obama got nearly a million dollars in campaign contributions from the fine folks at Goldman Sachs, and Goldman Sachs has come out in favor of the Democrat financial reform package. If you need to ask yourself why an industry would be in favor of sweeping new rules, regulations, and oversights from the Feds it’s because that industry stands to benefit enormously, at taxpayer expense, further strengthening the already too-strong bonds between Big Business and Big Government.
For the Republicans, it’s all well and good for them to point out that the biggest culprits in the collapse of the housing market were the government-run Freddie Mac and Fannie Mae (both oddly exempted from the financial reform bill), and that government is the real culprit here. But then the Republicans were in charge for years and, aside from occasional lip service, never even attempted to fix a system that was badly broken. Their inaction is just as culpable as the Democrats’ direct action.
For the issue of financial reform, I’m inclined to believe that some type of reform is necessary and will be beneficial. However, I am absolutely opposed to any more sweeping, “comprehensive” reform packages. After the debacle of health care reform, do we really need to pass a 1400-page bill that overhauls our entire financial system, establishes new government agencies, and imposes copious amounts of rules and regulations on business? A 1400-page bill that I’m willing to bet almost nobody in Congress has actually read?
Politically, this is currently a loser for the Republicans. America is looking for a witch and Congress is supplying us with one, even if the only proof turns out to be that Goldman Sachs weighs the same as a duck. The more the Republicans block the financial reform bill from coming up for debate, the more they get painted as obstructionists, fat cat friends of Wall Street, and the Party of No. The Democrats meanwhile get to portray themselves as the champions of the little guy, socking it to those mean old businessmen. It’s all theater, and it’s all pretty absurd.
Having said that, the Republicans are right to filibuster the bill at this time. There are poison pills in the bill (National Review has an excellent editorial about the bill), and health care reform has proven that the Democrats will not let anything stand in their way if they can get the bill onto the Senate floor. The Republicans know that their best chance of changing this bill so that it is less toxic to Main Street is to change it in committee, because any amendments they propose on the Senate floor will be summarily voted down.
Eventually the Republicans will fold on this and a bill will be debated and passed. Politically, there’s too much heat on the Republicans in a too-important election year for them to do the right thing for too long. But that doesn’t mean this bill is worth passing, at least not in its current form.
UPDATE: Well, that didn’t take long. Within a few hours of my writing this the Republicans collapsed like a bunch of broccoli and the bill will now appear before the full Senate for debate. Courage!