GOP's free-market populist opportunity

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Politics,Beltway Confidential,Timothy P. Carney

It’s not hard to sense the populist mood across the country today, which is punctuated by the realization that the game is rigged in favor of the rich, powerful, and politically connected.

President Obama is trying to tap into this distrust and anger. Will the GOP try the same?

If the GOP went all free-market populist on Obama, he has tons of vulnerabilities, such as his closeness with General Electric, his General Motors and Chrysler bailouts, all the Solyndra-type green corporate welfare in the stimulus, and more.

Notably, this spring and this fall, Obama will fight to reauthorize and expand the Export-Import Bank, a federal agency that subsidizes U.S. exporters and their Wall Street lenders at U.S. taxpayer risk – a Fannie Mae for exporters, as the Wall Street Journal put it in an editorial over the weekend. Boeing gets most of the loan-guarantee dollars. Yes, a majority.

Imagine if congressional Republicans decided to unite and oppose this reauthorization – and if the GOP presidential nominee did the same. You would have an election-year fight over corporate welfare with Obama taking the side of Boeing and GE. This would at least confuse journalists enough to stop them from parroting the Obama line that he’s the scourge of the special interests.

Wall Street’s subsidy-suckling provides another opportunity for a free-market populist attack on Barack O'Bailout. The Obama-Wall Street revolving door has been busy. Obama is raising a higher portion of his cash from Wall Street than even in 2008. And Obama’s venture socialism, including Ex-Im and the green-energy financing, all involves U.S. taxpayers underwriting banks’ risk.

And Jim Pethokoukis at AEI has a specific idea for Romney on this score: join Jon Huntsman, Arnold Kling, Bill Kristol, Charlie Gasparino, and other free-market types in calling for the break-up of the Big Banks. Pethokoukis, who also cites Dallas Fed Chair Richard Fisher’s recent call for a Big-Bank-Breakup, makes the political case:

 if Romney is looking for a big idea with populist oomph—one that might actually make some economic sense—he should call for breaking up America’s biggest banks. It seems like a perfect “Nixon goes to China” sort of play for the former banker … I mean, private equity investor … I mean, venture capitalist … I mean, conservative businessman. It’s actually kind of surprising Romney hasn’t already made busting up the mega-banks the 60th idea of his 59-point economic plan.

I argued for going after the big banks here and here.


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