Republicans blame government, not Wall Street for economic collapse
For almost a month now, protesters around the country have gone to the streets to decry excessive corporate profits as wages stagnate and the middle class is shrinking. The movement got its start and at ground zero for the U.S. economy: Wall Street. Americans on all sides of the aisle are angry at Wall Street, the banks and corporate America, and former House Speaker Newt Gingrich said Tuesday they have reason to be.
But there seems to be a disconnect between the protestors and the politicians.
"Banks got bailed out, we got sold out," "Wall Street has got to go," "the rich are getting richer and the poor are getting poorer," "corporate greed is everywhere, you know we are losing our middle class," were just some of the chants heard from protestors around the country.
The conservative tea party movement got its start, in part, as a reaction to President Bush's $700 Billion bank bailout. And many of the protesters today, from the other side of the spectrum, are upset that wall street has put profits over people - unemployment is high as corporate profits soar and banks are on their way back to financial health that they saw before the market collapse.
Some have asked if the protest movement has a greater reach, and could it become a liberal answer to the tea party? Those questions may not be answered anytime soon, but one thing is certain: listening to many of the Republican presidential candidates that there is a striking disconnect going on in the country about Wall Street.
"Anti-American" is how businessman Herman Cain described the protests on Face the Nation last Sunday. "The free market system and capitalism are the two things that have allowed this nation and this economy to become the biggest in the world. Even though we have our challenges, I believe the protests are more anti-capitalism and anti-free market than anything else," he said.
"I regard the Wall Street protesters as a natural outcome of a bad education system teaching them really dumb ideas," Gingrich said on the broadcast. "They're not angry about other people being successful, they're angry about an Obama administration stopping them from having the chance to be successful," he added.
At last night's Washington Post- Bloomberg presidential debate, the talk about Wall Street and the bailout showed even more of the disconnect.
When asked if Wall Street executives should be locked up for their financial crimes, the Republicans candidates uniformly blamed the federal government instead.
"I think if you look at the problem with the economic meltdown, you can trace it right back to the federal government," said Rep. Michele Bachmann, citing a 1977 law aimed at helping ensure access to credit for inner city neighborhoods that is frequently cited by conservatives as the cause of the financial crisis. Federal Reserve Board Chairman Ben Bernanke and federal regulators have repeatedly debunked that claim.
For his part, former Speaker Gingrich also ignored the question, instead attacking some of the protesters themselves, and yes, the federal government. "The fact is, in both the Bush and the Obama administrations, the fix has been in. And I think it's perfectly reasonable for people to be angry. But let's be clear who put the fix in: The fix was put in by the federal government." He suggested that the people who should be put in jail first are the two Democrats who authored last year's rewrite of Wall Street rules, former Sen. Chris Dodd and Representative Barney Frank. "Let's look at the politicians who created the environment, the politicians who profited from the environment, and the politicians who put this country in trouble," said Gingrich.
Representative Ron Paul, also not answering the question, hit on his favorite target, saying the Federal Reserve was to blame.
So while tens of thousands of Americans are in the streets screaming about Wall Street, top Republican candidates are screaming about government. That's really nothing new, in a sense. In his first inaugural address thirty years ago, Ronald Reagan said government is not the solution to the problem, government is the problem.
In last night's debate, Bloomberg's Julianna Goldman asked the candidates pointedly, if there was another financial crisis, what would they do differently.
"If you think the entire financial system is going to collapse, you take action to keep that from happening," said frontrunner and former Massachusetts Gov. Mitt Romney. "But I can tell you this -- I'm not interested in bailing out individual institutions that have wealthy people that want to make sure that their shares are worth something. I am interested in making sure that we preserve our financial system, our currency, the banks across the entire country. And I will always put the interest of the American people ahead of the interest of any institution," he said. Romney also said he supported the actions taken in late 2008 to keep the economy afloat, though he said that some institutions shouldn't have been bailed out and the implementation was far from perfect.
Romney said the new regulations on community banks are hurting small business job growth, while Texas Gov. Rick Perry said regulations are "strangling the American entrepreneurship that's out there." Cain and Bachmann advocated the repeal of the Dodd-Frank bill.
As did Representative Paul, who made what may have been the most honest assessment of the anger in the streets.
"I think one the reasons we're not getting anywhere and we're not getting anywhere in Washington, it's a partisan fight. It's a fight over power, because Sarbanes-Oxley [The legislation passed after the Enron and other accounting scandals aimed at preventing accounting abuses], which was done by the Republicans, it cost a trillion dollars, too. Let's repeal that, too. I mean, if you look at what we have done as Republicans, we have caused a lot of problems. To say it's all in these past two years, I mean, I think that is so misleading. And that's why the American people are sick and tired of listening to the politicians," he said.
