Thursday, May 10, 2012

Romney's assignment, if he chooses to accept it - updated

Here's how Romney wins the presidency: He runs against Tim Geithner and the too-big-to-fail banks. He attacks Obama's socialism for the rich, while portraying himself and the rest of the vulture capitalists as playing by the high-risk, high-reward rules of true capitalism: "We at Bain were never too big to fail. If we made bad bets, we were subject to the swift judgment of the market -- which is exactly how capitalism is supposed to work. But President Obama, Secretary Geithner and this Administration stepped in and distorted the market -- making the government of the United States a crony capitalist of historic proportions. I said at the time that the bailouts were wrong -- and we see now how right that was. The corruption of moral hazard continues to this day -- witness the latest outrage from JP Morgan Chase. This isn't what capitalism, or America, are supposed to be about. It's time to restore a true free-market economy, and get America back to work."

As Confidence Men and Frontline's "Money, Power and Wall St." make clear -- and as Krugman, Reich, Stiglitz et al. have noted for years -- Obama aided and abetted the looting of Main St. by Wall St. Romney can have his cake and eat it by singling out the big banks, while continuing to collect contributions from the rest of corporate America. Obama is genuinely vulnerable on this issue, and Romney would get a twofer -- appealing both to the Tea Party and to independents appalled when Citibank, Goldman Sachs and their brethren were made whole.

Will he do it? Probably not. It probably requires more political imagination -- and more acting skill (i.e., the capacity to project convincing outrage) than he possesses. So my guess is he won't accept this mission-eminently-possible. But I wish he would. Even if Obama did win, a debate framed in this way would create a lot of pressure to address financial reform in a more serious way in his second term.

Update: If Obama, Axelrod, Plouffe et al. have an ounce of political sechel, they will seize the opening created by the shaming of Jamie Dimon and JP Morgan Chase. They will forget that they ever had a good word for Dimon and Blankfein; forget that they let Geithner slow-walk the break-up of Citi, as Suskind reveals; forget that they have sat idle while Dodd-Frank was being dismantled before our eyes. They will run hard against the banks, starting right now -- and cutting off Romney's potential winning play at the pass. They will whip the Senate to ensure that none of these eviscerations of Dodd-Frank make it into law. Obama will talk over and over again about the need for a strong Volker Rule, to accompany his Buffett Rule -- and put out the word through surrogates that Volker would become Treasury Secretary in his second administration.

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