Obama escalates his War on Wall Street
Obama’s plan to limit risky activities at big banks is more about forcing Republicans to take tough votes than preventing another credit meltdown.The Volcker Plan was already rejected by the WH econ team (Summers, Geithner) and this is being pushed by the political team (Rahmbo, Axelrod) in the wake of the Massachusetts Meltdown. (In fact, this may help tamp down pressure from congressional Dems to dump the econ team.)
The WH can’t trumpet the economy, can’t trumpet healthcare, so Plan C is to go after Wall Street and make the GOP look like its best friend. Who cares that some of the worst problem children of the financial crisis were relatively small and undiversified? Wasn’t it regulator pushing for Wells Fargo to absorb Wachovia, and BofA to absorb Merrill? But I think the Dems will be surprised at how many GOPers might go along with this, starting with John McCain who has already advocated the return of Glass Steagall. But he will be far from the only one.