Tea Smarty: The Real Reason Michele Bachmann is Attacking Dodd-Frank
Rep. Michele Bachmann wants to reform Wall Street by -- wait for it -- snuffing out financial reform. The Minnesota Republican and chief House Tea Partier today introduced a bill to rescind Dodd-Frank, the bill President Obama signed into law this summer re-regulating parts of the banking industry.
Bachmann said in a statement:
I am proud to work towards repeal of Dodd-Frank because Congress must protect the taxpayers, instead of handing out favors to Wall Street.And what better way to protect the taxpayers forced into bailing out the financial industry than by repealing a law aimed at averting future bailouts?
Laughable? Well, it would be if leading Republican lawmakers hadn't also painted a bulls-eye on Dodd-Frank. Rep. Spencer Bachus, R-Ala., among other GOPers, has repeatedly pledged to roll back financial reform, including rules being developed to control the use of credit default swaps and other derivatives implicated in the financial crisis. Other Republicans are pushing to cut funding for the federal regulatory agencies charged with enforcing Dodd-Frank.
Rep. Barney Frank, whom Bachus is replacing as head of the powerful House Financial Services Committee, swiftly fired back in response to Bachman's bill. Said the Massachusetts Democrat in a statement:
Michele Bachmann, the Club for Growth and others in the right-wing coalition have now made their agenda for the financial sector very clear: they yearn to return to the thrilling days of yesteryear, so the loan arrangers can ride again â€"- untrammeled by any rules restraining irresponsibility, excess, deception, and most of all, infinite leverage.Afraid so. As I've argued ad nauseum, Dodd-Frank certainly could've been tougher on Wall Street, and I'm not at all convinced it will do much to prevent another disaster. But if Bachman and other pols gunning for the law feel it's too weak, the obvious solution is to strengthen it by encouraging regulators to pass stringent rules and by getting behind other reform legislation.Their effort to repeal the new financial reform law reveals the hypocrisy of right-wing claims that they are concerned with ending uncertainty in the economy. Now that we have put in place a set of rules that allow financial markets to function but which also curb their excesses, Representative Bachmann and her allies want to reintroduce uncertainty by going back to exactly the situation that led to the financial crisis in the first place.
So what does Bachman really want? In all likelihood, a little pub to bolster her potential presidential campaign in 2012. Attacking Dodd-Frank as the work of "Washington bureaucrats" is, of course, red meat to anyone inclined to blame government for the housing crash (and everything else).
And since Republicans lack the congressional votes to actually overturn the law, railing against it is an easy way to fire up constituents and score a few headlines without having to take responsibility for repairing the financial system. If this is what the Tea Party sees as the best way to rein in Wall Street, then as a political movement it's already irrelevant.
Image from Flickr user Gage Skidmore; thumbnail from Andre Karwath via Wikimedia Commons, CC 2.5
Related:
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- Why Wall Street May Yet Win the Derivatives War
- Inside Wall Street's Secret Plan to Bore Holes in the Volcker Rule
- Funny Business: Why the Financial Reform Bill Has Become a Joke