Well, this is going to be fun. Chris Dodd is headed toward a tough reelection campaign. So he stays at the head of the Banking commitee instead of moving to Health since a) that is where the action will be in 2010 and b) it is a great place to raise tons of money. He wants a non-Fed superregulator while the WH wants the Fed in that role. And now the Blue Dogs are cooking up their own reform plan. The whole thing will be at the epicenter of a white-hot lobbying campaign. And then there are the personalities; Dodd, Frank, Bair, Bernanke, Geithner. The politics are every bit as treacherous as those of healthcare.
Politics and policy from inside Washington
OK, here is what the front runner (at least according to the online betting markets) for the 2012 GOP nomination said at the Value Voters summit over the weekend:
When government is trying to take over health care, buying car companies, bailing out banks, and giving half the White House staff the title of czar – we have every good reason to be alarmed and to speak our mind!
Now that does sounds like a repudiation of TARP. And here is what Mitt Romney told me in March:
The TARP program, while not transparent and not having been used as wisely it should have been, was nevertheless necessary to keep banks from collapsing in a cascade of failures. You cannot have a free economy and free market if there is not a financial system. … The TARP program was designed to keep the financial system going, to keep money circulating in the economy, without which the entire economy stops and you would really have an economic collapse.
Now that does sound like an endorsement of TARP. If Romney liked it then and doesn’t like it now for policy reasons, I think that is OK. But if that is the case, he should explain is reasoning and change of mind.
Of course, the cynical explanation is that Romney now realizes that among many conservative GOPers, endorsement of TARP is almost a disqualifier for the 2012 nomination. So he is trying to muddy his support a bit. Probably the best way to approach it is to say that while TARP was better than doing nothing, there were better alternatives — asset auctions, debt swaps — that should have been planned for after Bear Stearns and executed. In any event, his criticism of TARP is fairly mild here — though it certainly does raise the issue of serial flip-floppery.