November 16, 2015
Here is what Hillary Clinton is going to say about Republicans over the next 12 months. It will be one of her most effective attacks: The GOP is the party of bailouts. They care more about big corporations and Wall Street than they do small businesses, the little guy and Main Street.
Never mind that both Hillary and Barack Obama supported the bailouts. Republicans ran the White House and the taxpayer aid was George W. Bush’s idea.
Why are Republicans having such a hard time coming to grips with this issue?
Why can’t they just come clean and admit that they did the wrong thing back in the midst of the financial meltdown of 2008? Why can’t they pledge that they will never do it again?
The issue was rightly highlighted in last Tuesday’s Fox Business News debate.
When asked about the bailouts, here is what Ohio Gov. John Kasich said: ”When a bank is ready to go under and depositors are getting ready to lose their life savings, you just don’t say we believe in philosophical concerns. Philosophy doesn’t work when you run something.”
He later added: “I would not let the people who put their money in there all go down.” It got worse: “When you are faced,” he sermonized, “with banks going under and people who put their life savings in there, you’ve got to deal with it. You can’t turn a blind eye there.”
The audience roundly booed. That should be a warning to Republicans that bailouts are intensely unpopular.
Ted Cruz and Jeb Bush also flunked the question. Bush argued for more capital requirements on banks. I thought he was for less business regulation? Cruz started out strong, saying he would never bail out a company, but then backtracked and said, well, if it’s a major crisis, I might ask the Federal Reserve to step in and lift them up as the “lender of last resort.” Excuse me – that is a bailout.
Here are a few "bailouts for dummies" talking points the next time this come up, and it surely will:
1. Bailouts didn’t work. They rewarded bad corporate behavior. They gave us the worst recovery from a recession in 75 years. They created too big to fail banks. They hurt smaller competitors. They aren’t constitutional. Never again.
2. Stupid government policy created the crisis–not tax cuts or deregulation. Everything from easy money from the Fed that created the financial bubble in the first place, the federal rules requiring banks to make bad loans (the Community Reinvestment Act) to Fannie Mae and Freddie Mac providing 100 percent taxpayer guarantees on loans that should have never been made in the first place.
3. Fannie Mae and Freddie Mac should be privatized and lose their umbilical cord to the federal Treasury. Fannie and Freddie lost $150 billion and have never been held accountable.
4. The Fed and Fannie and Freddie are setting the stage for another financial collapse. The Fed is continuing to over-inflate a financial bubble with its zero interest rate policy and its flood of cheap money. Fannie and Freddie are back at it, guaranteeing 3 percent down payment loans. They have learned nothing from the last meltdown.
5. Dodd-Frank regulations are creating more and more “too big to fail” banks. Community banks are getting squashed when we need them to be lending to small local businesses most.
6. The best way for Republicans to deflect the attack that they are the “party of big business” is to stop being the party of big business. End the Export-Import Bank and sugar subsidies. Shut down Fannie and Freddie. End all corporate welfare. Get every candidate to sign a pledge never again to use taxpayer money to bail out a private company.
Is that so hard?
This article originally appeared at Forbes.com.