The Return Of Up Is Downism

by digby

The other day I hypothesized that the Republicans were hypocritically turning “bailouts” into a right wing dogwhistle. Unsurprisingly, it turns out it’s a Frank Luntz special.

Senator Jeff Merkely explains:

We may be in the middle of a huge snowstorm here in Washington D.C. but there is another storm brewing on Capitol Hill. Master manipulator Frank Luntz is at it again, with a memo for the lobbyists and their allies in Congress who want to derail financial reform and allow Wall Street abuses go unchecked. The memo lays out an unapologetic roadmap for harnessing Americans’ anger with bailouts and their demand for accountability to … kill any effort to bring accountability to Wall Street. It just doesn’t get any more cynical.

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Say you’re for reform while you kill it

Luntz writes that in order for politicians to remain popular on financial issues, they need to “be an agent of change” and state that the “status quo is not an option.” Of course this advice is included in a memo explaining how to preserve the status quo. Luntz is saying, in short, pretend to be for reform while you work to kill reform.

Call financial reform a job killer

The memo tells opponents of reform to say that financial reform kills jobs. I’m sorry, but have they checked the unemployment rate lately? Failure to enact reform earlier led to the biggest loss of jobs since the Great Depression.

Blame the government

Predictably, given that the goal is to allow the banks to keep doing what they’ve been doing, the Luntz memo advises Republicans to blame the crisis on government instead of the banks. I will concede one point here – the government is responsible for not doing its job and allowing Wall Street abuses to run amok. But it’s a tough stretch to argue that the cure is for the government to continue the same bad behavior and forgo accountability and oversight.

Luntz, by blaming the government, is advocating that legislators ignore many of the factors that created this crisis. Ignore that the banks paid kickbacks to brokers to put customers in high-cost loans they didn’t need. Ignore that credit rating agencies said that lots of risky loans packaged together were a safe security. Ignore that investment banks borrowed billions to gamble other people’s money on dubious mortgage-backed securities. Ignore the explosion of derivatives – bets on future interest rates, currency values, and the price of commodities, stocks and bonds – that linked banks and investment houses in a web of risk.

Threaten that reform will limit choices

The memo tells opponents of reform to say that financial reform will limit consumer choice. What kind of choice do consumers have when credit card companies can unilaterally change the terms of the contract, when mortgage brokers get secret payments to steer borrowers into dangerous loans, when banks reorder the sequence of one’s checks in order to maximize overdraft fees? That’s not choice, that’s tricks and traps. Real choice is clear information and the right to walk away from a bad deal without leaving your wallet behind.

Poison the process

In the memo, Luntz advises Republicans to use the phrase “lobbyist loopholes” when describing a financial reform bill. He suggests, essentially, that any advocacy for reform be characterized as the work of lobbyists seeking special favors. But the fact is, last year the financial sector hired 2,567 lobbyists and spent over $300 million lobbying Congress in an effort to water down financial reform.

The Republicans are going to use the unpopularity of the bailouts to discredit Democrats so that they can cut taxes and deregulate the system even more. It’s actually a beautiful scam — may be one of the most beautiful ever because the Republicans have constructed a truly elegant explanation for their hypocrisy.

Here’s the new GOP Superhero, Paul Ryan, explaining why he voted for the bailouts:

Ryan said his vote for the bailout was influenced by Jonah Goldberg’s Liberal Fascism, a popular book among conservatives that argues that Nazism and other fascist movements were actually left wing in origin, and his belief that a second Depression would threaten capitalism—and rescue Obama’s presidency.

“I’m a limited-government, free-enterprise guy, but TARP… represented a moment where we had no good options and we were about to fall into a deflationary spiral,” he said. “I believe Obama would not only have won, but would have been able to sweep through a huge statist agenda very quickly because there would have been no support for the free-market system.”

He couched his support for the auto bailout in similar terms, saying that he feared the bill’s failure would have led the Obama administration to use TARP funds in order to rescue the industry with less congressional oversight instead.

“A lot of these votes are defensive votes,” he said. “A lot of them are not votes you want to take but under the circumstances they’re the best path forward.”

It’s not far removed from the thesis set forth at the teabagger convention last week-end by the far right fruitcake, Joseph Farah. And I’m sure Ryan and the boys will find no end of clever rationales for why they might need to do it again should the need arise, whether in power or out.

Yes, the Democrats are corrupt and complicit in the face of Wall Street crime as well. We know this. But Republicans are corrupt and complicit in the face of Wall Street crime — and batshit insane about everything else. Empowering this wacko extreme wing at this moment of economic and social instability is a nightmare scenario. These people have already shown that they care nothing for popular opinion, elections or the consent of the governed and they are in the grip of a powerful myth about their own ideology. Any validation of that myth would be very dangerous.

Witness Sarah Palin’s advice to Obama as to how he might win reelection:

PALIN: It depends on a few things. Say he played, and I got this from Buchanan, reading one of his columns the other day. Say he played the war card. Say he decided to declare war on Iran, or decided to really come out and do whatever he could to support Israel, which I would like him to do. But that changes the dynamics in what we can assume is going to happen between now and three years. Because I think if the election were today, I do not think Obama would be re-elected.

But three years from now things could change if on the national security threat —

WALLACE: You’re not suggesting that he would cynically play the war card.

PALIN: I’m not suggesting that. I’m saying, if he did, things would dramatically change if he decided to toughen up and do all that he can to secure our nation and our allies. I think people would perhaps shift their thinking a little bit and decide, well, maybe he’s tougher than we think he is today. And there wouldn’t be as much passion to make sure that he doesn’t serve another four years —

Two of the GOPs most important rising stars believe, respectively, that Liberal Fascism was an important work of political history and that the president could prove he is “tough” by invading Iran or doing “whatever he could” to strongly support Israel. That’s just nuts.

It’s very difficult to deal with the Democrats, most of whom seem to be in some somnolent state of denial about their own political fortunes, and it is vital that the liberal rank and file push them as hard as they can to end this sick, corrupt symbiosis between Wall Street and the federal government. But no matter how feckless they are are, it’s important to also remember that the alternative is worse.

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