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Will health-care reform change the politics of financial regulation?

I got some questions about this in my chat, and various senators are making the argument, so here's my bold take: yes and no.

In the "yes" category: If health-care reform had failed, Democrats would've been desperate going into financial regulation. And desperation is never a good negotiating strategy. Democrats would've either been desperate to take any deal they could get or would have just abandoned the substantive effort so they had something, anything to hit the Republicans with in the 2010 election. Meanwhile, Republicans just lost a big one, and for what? There might be a few of them who want their fingerprint on financial regulation, particularly if it doesn't look like their party is going to take back Congress in 2010.

In the "no" category: The rhetoric on financial regulation is a bit like the rhetoric early in the health-care reform debate. Of course there'll be bipartisan support! Of course this'll get done! I'm skeptical. As time goes on, Republicans will come to realize that whatever compromised proposal Democrats are pushing is in fact the end of the world as we know it, and they don't feel fine. People keep saying this isn't health-care reform, but it's just not health-care reform yet. When it becomes a big issue and Republicans realize that they can't let Democrats get onto the right side of FinReg, I'd bet it starts looking a lot closer to health-care reform than to something that's actually bipartisan.

By Ezra Klein  |  March 25, 2010; 1:49 PM ET
Categories:  Financial Regulation  
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Comments

"As time goes on, Republicans will come to realize that whatever compromised proposal Democrats are pushing is in fact the end of the world as we know it, and they don't feel fine"

Your prediction is breathtakingly obvious, though that won't stop the GOP from claiming that they really want to pass FinReg if only the Dems weren't trying to install a one-world socialist government by taking over the wealth and capital of Wall Street....blah, blah, blah.

It will be interesting to see how long it takes the GOP to abandon the obstruction fetish they have developed. At some point, they will want to come to the table and deal in good faith.

And I haven't been able to remove that REM song from my brain for a week now. Thanks for the reminder.

Posted by: danimal1 | March 25, 2010 3:35 PM | Report abuse

The question is, will Democrats have learned their lesson? Or will they, once again, let Lucy (from Peanuts) hold the football?

My money's on the "Lucy" scenario. Democrats just don't learn. I'm still dumbfounded they were actually able to get HCR done. Nancy Pelosi's my new hero. :-)

Posted by: JERiv | March 25, 2010 3:38 PM | Report abuse

Aren't the politics of financial reform much different, though? Do the Republican's really want to campaign on having prevented anything being done about the evil greedy bankers? I would think the "oppose everything" strategy plays much worse on this than on health care. I almost think setting financial reform to be the last big fight before the election was a brilliant bit of strategy.

Posted by: srb4 | March 25, 2010 4:12 PM | Report abuse

Bottomline is that I don't trust Senator Dodd.

Health-care reform changed the politics of financial regulation by making the public attuned to Congress' unsavory legislative sausage factory.

Should Dodd's sellouts to Wall Street be exposed, the Democrats will be toast come November.

Posted by: msa_intp | March 25, 2010 4:13 PM | Report abuse

Isn't there a difference in public opinion? Surely if Democrats create a bill that can be summarized as "taking on the bankers", Republicans are going to have a hard time demonizing it the way they did with HCR.

Posted by: bigmandave | March 25, 2010 4:13 PM | Report abuse

On the "surely they can't demonize financial regulation", I'm pretty sure they can.

Anything from...

"Stifling innovation!", "government takeover of the financial system!", "end of capitalism as we know it!", "they want to shackle your banks", "giveway to the wall street tycoons!", and "they want to kill off my senior citizen banker!".

If you don't think it's coming, clearly you weren't paying attention to the HCR debates. Or need I remind you that almost no big critique from Republicans of the HCR law was based on actual fact?

Posted by: JERiv | March 25, 2010 4:49 PM | Report abuse

The New Republic declares a "Zeitgeist" shift. Great German word, meaning the "spirit of the times", and it is a word that is very much in vogue now. I think the zeitgeist shift exists primarily among the members of the progressive media, who are so relieved that this legislation passed, so that they no longer have to work so hard trying to sell it.

Here's another German word: "Weltschmerz" - meaning "a dark outlook on the world". As opposed to the progressive media, who are relieved, a vast number of ordinary Americans have experienced more of a deepening weltschmerz than a shifting zeitgeist, and it is more enduring than the zeitgeist.

They see gross overspending over the past decades, and a new administration that now greatly multiplies the overspending, and raises the present and future indebtness beyond reason, to give them programs and controls over their lives THAT THEY DO NOT WANT. That is the reason for the TEA Parties, and the reason so many Independents are ready to toss Democrats out of office as soon as they have the opportunities. If you think Massachusetts was an example, wait until you see the "purple" and "red" states.

The Republicans of the early 2000's were not exactly shining example of fiscal restraint, but at least the current Republicans have held firm against the travesty of legislative misadventure during 2009 and 2010. I think Republicans should be given one more chance to have the Presidency and the majority in Congress, to undo this Democratic mistake and head us towards freedom from debt and increased civil liberty.

If they don't take advantage of that chance when it comes, then it's time to turn to a third party.

Posted by: MKS1 | March 26, 2010 9:31 AM | Report abuse

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