Unemployment will remain high, and so will resentment against the banks -- a volatile combination that will encourage savvy members of Congress to continue to fight for meaningful reform of the financial sector. While a major reform bill is winding its way though Congress right now, it only addresses aspects of the problem, leaving loose ends for reformers to pick up and pursue in 2011.
Groups for and against the current financial reform bills have already conducted their polls, polished their messages and are starting to engage in ad-war skirmishes that foreshadow the deluge of big bank spending to come, as Wall Street fights to elect candidates who will protect their interests and privileges.
In February, Americans United for Change -- a media group associated with the Democrats -- released two hard-hitting ads in support of bank reform, not attacking Republicans, but Wall Street itself. The first portrayed bankers as, well, snorting pigs. ”When big banks went hog wild on Wall Street they left behind one fine mess on Main Street," the ad begins.
Their second ad, blames derivatives and “reckless gambling” on Wall Street for the loss of 7 million jobs and the collapse of the economy. The message of both ads is simple: “Tell Congress to hold big Wall Street banks accountable.”
On the flip side, the "Committee for Truth in Politics" started running television ads that frame current bank reform bills as the project of "fat cat lobbyists" and "special interests," not to mention “one big bailout” for banks. The idea is to link public anger over the banks bailouts (designed by the Bush administration) to the substantive Democratic reform bills in an effort to discredit those reforms.
You will recall the oddly-named Committee for Truth. They started in 2008 running anti-Obama ads falsely accusing presidential candidate Barack Obama of supporting early release for sex offenders. The Committee’s attorney is famed anti-abortion, anti-campaign finance reform activist James Bopp, Jr., who refused to disclose the Committee's donors, and filed a preemptive suit against the Federal Election Commission (FEC) alleging that the FEC's longstanding reporting and disclaimer requirements for electioneering communications were unconstitutional.
The ads utilize language proposed by Republican pollster Frank Luntz in a memo he wrote to Republicans suggesting key phrases they could use to get the public to oppose financial reform. Want to kill reform? Call any and all reform measures the "next bailout bill." Want to kill the proposed Consumer Financial Protection Agency which would be authorized to police deceptive banking, mortgage and credit card practices? Call it a "bloated bureacracy" filled with "lobbyist loopholes." Not surprisingly, Luntz's client list includes banks and credit card firms, desperate to prevent the creation of a Consumer Financial Protection Agency.
The ads are running in 35 districts and target banking committee members, moderate democrats and Senators up for reelection. Montana Senator Jon Tester properly called the ads false and misleading, and called on the Committee to reveal who they are and where their funding comes from.
Brace yourself, but ads with these themes will be cut and re-cut over the next year as the election cycle gets underway. In a sign that they will be willing to spend big bucks to defeat reform, financial companies gave $450,000 to support Massachusetts candidate Scott Brown in the last few days of his successful race to replace Ted Kennedy in the U.S. Senate. Brown ran as a populist against big bank bailouts, while at the same time holding positions against reform and against the Obama proposal to recoup bailout funds with a small bank tax. Brown found it easy to walk these contradictions right into a new Senate seat. The big banks will as well.
The Supreme Court's recent "Citizens United" decision blew the lid off direct corporate campaign spending in elections and the American public will soon be the beneficiaries of the most deceptive campaign ads in history. Come November, the airwaves will be awash with ads against big bank bailouts and special interest lobbying, funded directly or indirectly by Goldman Sachs, JP Morgan Chase, Bank of America and other institutions who took the bailout money and have broken all records lobbying against reform this year. These banks have a lot to lose if ambitious members of Congress continue to pursue meaningful reform that might curtail their distorted pay structure and fraudulent business practices.
When big Wall Street starts pumping out the ads, we can only hope that average Americans will be savvy enough to see through the static, because there is simply no way that genuine bank reform advocates will be able to compete in this high-dollar arena.