On the evening of Scott Brown’s election, I wrote that among the reasons for his victory was resentment of “a host of actions to prop up Wall Street firms at the expense of taxpayers.”
Who would have thought that less than six months later Brown would cast the decisive vote in favor of legislation that institutionalizes Wall Street bailouts, and whose sponsors — Christopher Dodd and Barney Frank — played key roles in bringing on the meltdown, not to mention representing everything that is sleazy and corrupt about Washington. If Brown wasn’t running against Barney Frank when he railed against the “machine,” then what was he talking about?
I can only assume that even though Brown knew how to ride the wave that swept him into office, he now fails to understand it. He seems to have reverted to the traditional strategy of “moderate” Republicans in Massachusetts, which is to make common cause with liberal establishment and then somehow claim to be “independent.” The financial regulatory “reform” bill is an odd opportunity to pursue such an outmoded strategy.
Brown did not bring people out to foot-stomping rallies in the final days of his campaign because he offered a fresh, new brand of William Weld Republicanism. Instead, he successfully got on the right side of the elitist/populist divide. With the possible exception of the monstrous spending and debt, nothing feeds this division more than the Wall Street bailouts. Votes in favor of TARP have become an unexpected (to incumbents) flashpoint of anger in primary elections all over the country and have ended a score of political careers.
The elitist/populist divide transcends political party. TARP and the auto bailouts were initiated by a Republican administration. Although Brown was considered a “moderate” in the Massachusetts legislature, it really didn’t matter. His election represented a primal scream by ordinary people who recognized that they were getting screwed by the professional political class, which in Massachusetts is even more entrenched than elsewhere. Brown has allied himself with these corrupt elites.
Judd Gregg, another New England Republican Senator who talks a good game about fiscal responsibility, on Tuesday claimed, “TARP did what it was supposed to do.” Oh really? In October 2008, then-Treasury Secretary Henry Paulson told Congress that if it did not pass the 3-page TARP bill to buy toxic assets from banks, the entire financial system would collapse.
But then Paulson turned around and used the money to buy preferred stock in banks to bolster their balance sheets. Not one cent was spent to purchase toxic assets. If getting the toxic securities off the bank balance sheets was the absolute key to avoiding total catastrophe, TARP was unnecessary because no such purchases were ever made. In fact, a lot of this junk is still right where it was in October of 2008.
If Congress knew that the money would be used for other purposes, TARP would have never passed. When Obama came into office he could scarcely believe his good fortune. Tight-fisted Republicans like Gregg left him hundreds of billions to spend on things like bailing out the United Auto Workers. Gregg has the good sense not to run for re-election, and thereby avoid all the pesky TARP questions. Scott Brown is up again in two years.