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The difficulty of covering the GOP's stance on financial reform

Over the past week, several Republicans have called me out for what they considered a flippant tone in coverage of their messaging on financial reform. It's an interesting criticism and a frustrating problem. I don't know how to cover some of the arguments being made against Democrats without acknowledging that they make no sense. Characterizing the current version of the legislation as a "bailout bill" is simply at odds with the facts.

Let's look away from the rhetoric of Republican leaders like Sen. Mitch McConnell (R-Ky.) and Rep. Mike Pence (R-Ind.) and over to the party's messaging arm. The RNC's research briefings are typically far better on the facts than such briefings from Democrats. On this issue, the briefings make audacious claims and back them up with stories that don't validate the claims. "Senate Dems Fail In Their Attempt To Move Forward With Bailout For Their Wall Street Fat Cat Friends," went the headline of yesterday's release after the vote. The word "bailout" appeared eight more times. Why, Goldman even supported the "bailout bill," and this bit was cited from their annual report to prove it.

Given that much of the financial contagion was fueled by uncertainty about counterparties' balance sheets, we support measures that would require higher capital and liquidity levels, as well as the use of clearinghouses for standardized derivative transactions. More broadly, we support proposals that would improve transparency for investors and regulators and reduce systemic risk, including fair value accounting.

You can stop trying to locate Goldman's support for a "permanent bailout" or "bailout fund." It's not there. What there is, instead, is support for reforms that Republicans support, too. And I'd point to the reporting of Tim Carney, probably the smartest free-market reporter and critic on these issues, who in pointing out that Goldman favors some aspects of financial reform notes that those aspects include pay caps -- a reform that makes the Republican innuendo about Democrats secretly doing the bidding of Wall Street fat cats even more confusing.

Republicans don't like being smeared as doing Wall Street's bidding when they slow down passage of financial reform. That makes sense; Democrats are going overboard when they make that claim, and the public record shows that the party is willing to stage a fight to make Republicans look back. But can't the GOP engage on the merits of the bill without walking up and down the street with a sandwich board that reads "The Bailouts Are Coming"?

By David Weigel  |  April 27, 2010; 8:28 AM ET
Categories:  Financial reform  
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