In recent days, more than 900 cities have hosted protests under the Occupy Wall Street banner. But the enthusiasm for intervening in Goldman Sachs’s affairs hasn’t trickled up to the GOP presidential campaign. There, the candidates want to leave Wall Street alone. And this isn’t just a passive disinterest in the finance sector’s affairs. They want to deregulate -- actively and aggressively.
"I introduced the bill to repeal Dodd-Frank,” bragged Rep. Rep. Michele Bachmann at last week’s Bloomberg/Washington Post debate. It’s true. Her bill is H.R. 87. It repeals the law in 67 words. It says nothing about any replacement. If it passed, Wall Street would be operating inside the exact same regulatory structure it had in the run-up to the crash.
But Herman Cain was not to be outdone. “Repeal Dodd-Frank, and get rid of the capital gains tax,” he countered. Repealing the capital gains tax would make it vastly more profitable to earn a living through investment income rather than wage income. A hedge-fund manager, for instance, might escape income taxation entirely. It would give smart, young college students even more reason than they have now to go into the hedge fund game than, say, medicine.
“Dodd-Frank obviously is a disaster,” agreed Rep. Ron Paul. “But Sarbanes-Oxley costs a trillion dollars, too. Let’s repeal that, too!” Sarbanes-Oxley -- or “SOX,” in congressional parlance -- is the law passed in the wake on the Enron scandals. It sought to make balance sheets more transparent and financial statements more trustworthy. It is not well liked by the financial sector.
Mitt Romney, while not quite as carefree in his denunciations of the financial-regulation reforms, largely agrees with his co-candidates. His jobs plan promises that a Romney presidency would “seek to repeal Dodd-Frank and replace it with a streamlined regulatory framework,” though it doesn’t give much detail on what that streamlined framework would be. He also says that “the Sarbanes-Oxley law passed in the wake of the accounting scandals of the early 2000s should also be modified as part of any financial reform.”
So three years after the worst financial crisis since the Great Depression, the consensus in the Republican Primary is that we should deregulate Wall Street not just to where it was before the bubble burst, but to somewhere nearer to where it was before Enron crashed.
This is the crucial context in which to understand Obama adviser David Plouffe’s prediction that “12 months from now, as people make the decision about who to go vote for, the gut check is going to be about, ‘Who would make decisions more about helping my life than Wall Street?’” It’s not just that the GOP is against Dodd-Frank but that it’s arguing for a fairly broad form of deregulation rather than for a different form of regulation. And the Obama campaign is betting that Americans have had their fill of deregulation and the ideology that sparked it.
It was always easy to see the question that the Republican presidential nominee would lob at a president who has presided over nine percent unemployment and slow growth. Ronald Reagan asked it of President Jimmy Carter in 1980: “Are you better off than you were four years ago?”
It was harder to imagine Obama’s response. But as the Republican Party returns to a platform of deregulation and regressive tax cuts, it’s becoming clearer. “How is your agenda any different than the Bush agenda that got us into this mess in the first place?”