Chuck Grassley (R-IA)’s pledge to vote against the financial reform appears to be a bad decision made for good reasons. Read his statement:
I’ll vote against the conference report because of concerns about changes made to the Senate bill, which I supported. [. . . .]
The conference report also waters down important reforms that were in the Senate bill.
I wanted to make the derivatives market transparent. The conference report weakened the Senate derivatives title, which required that banks receiving federal assistance push out all derivatives trading to separate affiliate operations. Instead, the conference report allows certain types of derivatives trading by the bank which puts them in a more risky position. [. . . .]
It’s a bill that most of Wall Street wants passed. And that’s the last thing Iowans expect in any real reform bill.
What passes for Republican “populism” these days, especially in tea party circles, is really anti-elitism — a way of passing off dangerous anti-intellectualism as “grassroots” and therefore somehow genuine, and excusable — or barely-contained mob violence. Real populism can be grassroots or top-down; all that matters is that the target be corporate robber barons, or corrupt, exploitative politicians.
Grassley, believe it or not, nails the message. The financial reform bill isn’t tough enough. Derivatives should be more tightly regulated. An aggressive disclosure regime that subjected off-book, complex instruments to the same disclosure requirements that govern issuers in traditional IPOs would’ve either popped the bubble earlier, saving the American taxpayer and investors billions, or prevented it from forming in the first place. Pushing for tough reforms like these is a task that lies at the very heart of traditional American populism, and if Grassley were pursuing it in good faith, he’d deserve our accolades.
But he’s not. There’s no indication that Grassley will push for, or desires, a stronger bill. He didn’t use his considerable clout to swing his caucus towards the bill he now claims he wants. He didn’t lean on Scott Brown to accept the earlier draft, but sat back and let Democrats dilute the bill just to acquire his swing vote. In short, he suborned the very process that produced the ineffective bill he’s now complaining isn’t effective enough. Now he’ll let the reform process die, having acquired the political cover he needs to look like a reformer, while still serving his corporate interests.
I hope he proves me wrong, but he won’t. For his strategic genius, the man deserves our respect. I only wish he didn’t use it to undermine his country’s recovery.