Banks are lobbying to extend a special crisis-born bailout, today’s Wall Street Journal editorial explains. The Transaction Account Guarantee socializes banks’ risks by extending unlimited government guarantees to checking accounts, in effect. The Journal explains how some of those progressives who posture as enemies of banks are the champions of this bailout:
TAG has largely flown under the media radar because some of its most prominent backers have often postured as opponents of the giant banks. Congressman Barney Frank (D., Mass.) promised “death panels” for too-big-to-fail banks, but his 2010 Dodd-Frank law quietly extended TAG for two years.
Today, one of TAG’s most ardent champions is Senator Sherrod Brown (D., Ohio), who is running for re-election as a champion of the little guy. Give him credit for nerve. His website proclaims that a bill he recently drafted “would eliminate government subsidies enjoyed by trillion-dollar megabanks.”
This bash-and-bailout is standard Democratic banking politics. Recall the mortgage bailouts in 2008 and 2010. Think of the unanimous Democratic support for the Export-Import Bank, which guarantees private-bank loans to foreign buyers. Or all the Solyndra-style loan guarantees for unproven green-energy companies. Or the loan guarantees for nuclear power. Or the taxpayer lifelines for Fannie & Freddie. Or the sweetheart Freddie settlement with Bank of America.
Obama’s words may be hurting bankers’ feelings, but many of his policies are helping bankers’ bottom lines.