Bedding down with Wall Street



Here's the thing about plagiarism: When journalists do it, they lose their jobs. When politicians do it, they're merely doing their jobs.

In Washington, the pollsters and consultants come up with the talking points, and the politicians duly parrot them. Case in point: Senate Republican leader Mitch McConnell's  ongoing attempt this week to say No to financial reform of Wall Street, with the help of some clever phrases cooked up by a Republican consultant - for the express purpose of carrying water for the GOP's friends on Wall Street.

Before we review McConnell's performance, let's shine the light on the consultant, Frank Luntz. I can attest that he's a nice guy. He's been road-testing GOP talking points dating back to the '94 congressional elections, and has since branched out to corporate clients. He knows that Wall Street has a bad image, so he advises Republicans to steer clear - at least in their messaging.

In his '07 book, entitled Words That Work, Luntz warns Republicans that Wall Street "is seen as global and cold, with sterile glass structures and office cubicles filled with numbers crunchers concerned more with profits than people." The problem, of course, is that Republicans have traditionally been close to Wall Street, vacuuming up more of its donations than the other party. (According to a massive '08 study by the nonpartisan, the GOP collected 55 percent of the financial sector's political donations in the 10 years between 1998 and 2008.) But Luntz had a solution: Republicans, in their messaging, should take care to identify themselves with Main Street. In Luntz's words, "Wall Street is about profit. Main Street is about people...Wall Street is about buyouts and takeovers. Main Street is about family."

Which brings us to the current efforts on Capitol Hill - led by Democrats, with a few participating Republicans - to crack down on Wall Street abuses. Earlier this year, when Republican leaders realized that they would have to serve their Wall Street friends by opposing reform, without somehow appearing to side with Wall Street against the little guy, Luntz went to work on the thorny problem. He came up with a solution. He suggested some talking points that made it sound as if the Republicans, by opposing reform, were actually sticking up for the little guy - and that the Democrats, by pushing reform, were sticking up for Wall Street and screwing the little guy.

Luntz suggested that the Republicans talk about how the reforms would (supposedly) empower government bureaucrats to bail out more banks and pin the tab on the taxpayer; as he said in a memo, "The single best way to kill any legislation is to link it to the Big Bank Bailout (of 2008)." He crafted a phrase for GOP use: "If there is one thing we can all agree on, it's that the bad decisions and harmful policies by Washington bureaucrats that in many ways led to the economic crash must never be repeated." And another: "Taxpayers should not be held responsible for the failure of big (banks) any longer."

So here was Mitch McConnell the other day, on the Senate floor, aiming his Luntzspeak at the little guy: "If there's one thing Americans can agree on when it comes to financial reform, it's this - never again should taxpayers be expected to bail out Wall Street for its own mistakes. We cannot allow endless taxpayer bailouts for Wall Street banks."

And yesterday, McConnell was still in mimic mode. The Democratic reforms would mandate "endless bailout of Wall Street banks," and indeed make it "official government policy to bail out the biggest Wall Street banks."

It's bad enough when a politician talks like he's a ventriloquist's dummy. It's even worse - as in this case - when the dummy talk is so egregiously at variance with the facts.

In truth, the Senate reform effort actually gives federal regulators new powers to dissolve large firms that might be threatening the overall health of the financial system. Large firms would be required to submit plans on how they could be liquidated, if such a move became necessary. And contrary to the assertions of Republican leaders, there would be no "fund for permanent bailouts," supposedly serviced forever by the taxpayers; the truth is virtually the opposite. The feds working to dissolve the bad firms would need to keep the lights on during the liquidation process, and they'd have $50 billion to make that happen - but that money wouldn't be extracted from the taxpayers. The banks would be required to cough up that money.

No wonder Wall Street dislikes this reform effort. No wonder McConnell huddled with a number of Wall Street firms last week, to plot strategy. No wonder he was such a great vehicle for Luntzspeak, given the fact that since 1998 he has reportedly received $4,250,800 from financial industry interests.

The problem, for Republican leaders, is that the Luntzspeak is so transparent; it can't mask the fact that the party in bed with Wall Street is merely pretending to stick up for Main Street. The Senate Democrats don't need a consultant to articulate that fundamental truth.