Spitzer-Matalin on Chase Chastened & Bain Targeted
While Zuckerberg had a better week than Ricketts, Both Sides Now eats its spinach and discusses the Political Economy. After Jamie Dimon's apology, it's harder for the GOP to use Dodd-Frank as a four-letter word. And it's game on a) on Romney's record at Bain and b) Obama's vulnerability on the national debt. And if credit default swaps bore you, the loss of 8 million jobs in 2008-2009 due to Wall Street manipulations plus a bursting Housing bubble is worth talking about.
*On Dimon and Bank Regulation. Eliot explains in two succinct minutes the history of banking regulation from the New Deal through Gramm's assault on Glass-Steagall to today's fight over the Volcker Rule. There's a conceptual consensus that commercial banks shouldn't speculate with taxpayer-insured depositors' money... but Mary also agrees with Romney-Fehrnstrom that Morgan's losses were no big deal and the in-process Volcker Rule is hard to write and creating "uncertainty." But isn't it now harder to cavalierly condemn regulation in general and bank regulation in particular? Mary adamantly denies Republicans believe any such thing, leading to head-scratching by the Host. "But I saw all the GOP debates."
Eliot condemns the GOP for opposing sensible regulations and Dimon for his conflict of interest in sitting on the NY Fed Board that writes rules that affect his bottom line. "Tim, just tell him to resign. Period!" And as he's consistently argued for years, he attacks how big banks are incentivized to invest in high-risk bets because of weak federal regulation. With a market cap of $189 billion and annual revenues of $20 billion, J. P. Morgan will survive this big loss. "But if you survive a heart attack that doesn't mean you shouldn't find out what caused it so it doesn't kill you the next time."
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*On the Pain of Bain. The Obama campaign airs an ad that quotes workers who lost their jobs after Bain Capital invested in their firms. Fair game to imply (like Gingrich and Perry before] that the presumptive Republican nominee is a heartless corporate raider? Mary says "bring it on" since voters will understand that there were also other firms which added jobs -- Romney claims a net 100,000 jobs -- so these one-sided attacks won't work. But didn't they work when used by Ted Kennedy against Romney in their 1994 Senate race? "That was in another era, in Massachusetts, and it was Kennedy's seat!"
Since Romney's running largely on his business experience, Eliot agrees that his Bain performance is a legitimate subject for debate and is not the "character assassination" that Romney implies. But. "Swing voters like opportunity more than fairness so Obama needs to be careful. A better argument is, 'hey, we're on the way back and have created 4 million jobs."
Then the Sheriff of Wall Street and the Engain' Cajin debate what "fairness" means -- everybody paying their share or the rich doing more? (But there's agreement that nothing rhymes with Spitzer.)
*On the Politics of Debt. We listen to Speaker Boehner tell Pete Peterson's fiscal summit that "it's irresponsible to default on your debt but even more irresponsible to raise the debt ceiling without reducing the debt and reforming the debt process." In front of a big debt clock always clicking higher, Romney says that he "worries about "prairie fire of debt... getting closer to our children" -- which combines a lot of inflammatory visual and verbal rhetoric.
All agree that long-term the projected debt would be "unsustainable," but in the aftermath of the Great Recession of 2008-09 and slow growth now, is it sane to slash social spending to reduce the deficit or would that risk a double dip recession. Imagine Ryan debating Krugman. Ms. Matalin embraces the Romney-Ryan budget (which doesn't reduce the deficit because of no revenues and no military cuts) because it would convey confidence to investors. The former governor agrees that austerity based on the 'confidence fairy' isn't working in Europe now and won't here.
Why would Boehner want to threaten a return to the debt ceiling fight of last summer that downgraded our credit and tanked GOP poll numbers? Is this just a negotiating ploy/bluff intended to get talk shows talking about The Debt, as we are? Mary goes on offense: "Thank you President Obama for the S&P downgrade" and Republicans "can't chicken out again -- go ahead and close down the government."
Eliot dismisses such talk especially the possibility that America wouldn't pay its bills -- though worrying about the "taxmageddon" at year's end when the automatic sequester kicks in and Bush tax cuts end. There's consensus that S&L downgrade hurt the rating company more than the U.S. since interest rates didn't rise and foreign money keep pouring into the country.
*Quick Takes: Arianna on Greece. Those Time & Newsweek Covers. Our "Greek correspondent" (as the Daily Show might put it) discusses how the continuing impasse in her native country "has no good ending" but the best of the worst would be for Greece to exit the Euro. Mary and Eliot agree that the Time cover of a woman breast feeding her 3-year-old son and Newsweek putting a halo with a rainbow of colors on the head of America's "First Gay President." Two "ridiculous" covers, they agree, a reflection of how desperate traditional media are becoming in this new media environment. "I don't want to moralize here," says Eliot, "but to sell a few more ads... ?"
Mark Green is the creator and host of Both Sides Now, which is powered by the American Federation of Teachers.
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