Given the huge cost to taxpayers for the Financial Bailout[and not just in TARP funds but the much bigger recession costs to governments at all levels due to loss of tax revenues while having to make increased safety net expenditures], Tea Party Members should have meaningful Financial Reform at the top of their agenda. But meaningful reform is being opposed by Republican Senate Leader Mitch McConnell as he is characterizing the current financial reform as providing Washington with more “bailout authority and funds”[PolitiFact, the Pulitzer Prize Winning group at the St. Petersburg Times finds key GOP pronouncements on the issue completely false]. So with GOP leading the opposition to meaningful financial reform, it is not a shoe in because of the GOP’s blunderbuss filibuster policy.
Even with the indictment of Investment Bank Goldman Sachs for securities fraud meaningful financial reform in Washington is not a certain given GOP opposition and two other reasons. First, the banks, now flush with money and more powerful than ever before, are spending more on lobbying + campaign finance against major reforms. Financial firms are the third largest contributors to campaign finances and lobbying after Lawyers [just proxy funnels for industry money] and healthcare contributors. The second problem is that even more money is expected to roll into campaign finance and lobbying now that the US Supreme Court has removed all limits to corporations, unions, and special interest groups contributing to political groups. Now , more than ever, Big Money talks and carries an even bigger political stick. Here is what Nobel Prize Winner Paul Krugman is saying about meaningful financial reform:
For the fact is that much of the financial industry has become a racket — a game in which a handful of people are lavishly paid to mislead and exploit consumers and investors. And if we don’t lower the boom on these practices, the racket will just go on.
Interestingly, even big financial funds are worried about loss of federal regulation of investments, and so they are spearheading efforts to get companies to disclose exactly when and where campaign funds are going.
So Tea Party members, if they are true to their cause of less spending and waste, should be following the financial reforms, identifying the false objections, and supporting simple, easy to monitor and therefore low cost financial regulations. If instead they just mime the GOP false bailout line, then Tea Party members will have lost a chance to make deep and meaningful cost and deficit reductions – as the US has had to pay mightily for financial excesses in the past 15-20 years: TARP for Failing Banks, Recessionary Payments for the DOT.COM bust, and Resolution Trust for the S&L fiasco of the mid 1990’s. Seeing how deep Tea Party members understand and contribute to financial reform will be their own litmus test for true commitment to financial and government reform.
If Tea Partyers just mime the Republican line on financial reform , they will have dissipated their voice and power for true and broader government reform.