Wherein We Cut Some Frank Luntz Crapola on Wall Street Reform

You know, while many people look upon Frank Luntz as a political genius, most of the time, he’s little more than a right
wing con man. And now, he’s set his sights on the financial services reform that
sits in the Senate; you know, the one that Republicans tried to block debate on
for several days.

In a post
on today’s Huffington Post
, Luntz tries to tell everyone how bad the Dodd
bill is for all Americans, and how it will absolutely backfire on the Democrats come this fall. In other words, everything Democrats accomplish is bad for us. After eight years of complete incompetence and sloth, the Democrats pass an economic stimulus that's working, collects bailout money BACK from the banks and car companies we lent it to (and be serious; would Bush have even asked for repayment?), passed a health insurance bill that allows 30 million people to pay their medical bills, and passes a bill that reforms Wall Street, and he really thinks swing voters will choose to return to incompetence and sloth?

And every
reason he gives is made of classic right wing talking points that have no factual basis whatsoever. 
I am curious of one thing, however; given the Republican
track record on major legislation during this session of Congress, if this bill
is so bad for Democrats, why would they block it? It seems to me that, if it
was so incredibly bad, Republicans wouldn’t block it; they’d want
it passed, so they can be elected in 2010 on a promise of “repeal and replace.”
They seem to love that term, don’t they?

No, this bill is great for consumers, and it’s about to get
even better with some of the amendments that are being proposed. In fact, it’s
so good, Luntz, who is one of the greatest bullshit artists of all time, can’t
even produce a solid reason why this bill is actually bad for Democrats. Instead, he lists three incredibly lame rationales for why it's bad for Democrats, and then goes off on another health care rant.


dirty secret of the Senate financial reform bill is that some of its biggest
supporters work on Wall Street. Recipients of taxpayer bailout money have no
concerns about the bill — in fact, the CEOs of Citi and Goldman Sachs have
publicly endorsed it, and several of the other big banks have expressed
support. It keeps the "too big to fail" guarantees in place for
another generation of financial services companies.

This is classic Washington Republican double-speak, and it’s actually
beneath someone with Luntz’s pedigree. The entire populace wants financial
reform, and like it or not, the CEOs of Citigroup and Goldman Sachs need to
clean up their reputations in order to make money going forward.  In my memory, only health insurance companies
are stupid enough to pull a PR stunt that actually makes them worse in people’s
minds. Of COURSE big banks SAY they want financial services reform.  But Luntz is also wrong, at least with regard to the Goldman CEO. Check out this exchange between Sen. Tom
Coburn, who voted against even debating this bill, and the CEO of Goldman Sachs
just two days ago:

Goldman Sachs CEO:
 “I Listened To A
Speech By Barack Obama At Wall Street, And One Of The Points He Made Resonated
With Me Because I’d Said It Myself. He Said That The Biggest Beneficiaries Of
Reform Will Be Wall Street Itself.”

 “Let me ask you a few questions about
the bill that's being proposed. Your Executive Vice President and Chief
Financial Officer said you embrace it, you’re generally supportive of the Dodd
bill. You've been fairly high profile in your support for it. Do you still
maintain that support for this bill? Do you think it solves the problems that
caused the problems that we got into?”

BLANKFEIN, Goldman Sachs CEO:
 “I think execution – well, first of
all, some aspects of the bill, I think have morphed over the last – maybe even
over the last few days, I’m just not sure.”

COBURN: “I don't think so. The vote was turned
down again. I don't think we've gotten there.”

BLANKFEIN: “I see, right. I'm generally
supportive. To be sure, there are details of it that I think I'm less sure of,
but I think, on the whole, financial reform is, absolutely is essential and I
will say that last week, in New York, I listened to a speech by Barack Obama at
Wall Street, and one of the points he made resonated with me because I’d said
it myself. He said that the biggest beneficiaries of reform will be Wall Street

the Homeland Security & Government Affairs, Permanent Subcommittee on
Investigations, U.S. Senate, Hearing, 4/27/10)

Oops.  You see, Luntz
would have done well to pay attention the last few days, because while the CEO
of Goldman thinks the idea of reform is a great idea in the abstract, he's not too crazy about this bill. And if he's not too crazy about this bill, well, doesn't that undermine Luntz's main premise, which is that this must be a bad bill because bank CEOs love it? At least one of the two he mentioned doesn't love it at all.

Then, Luntz turns to one of the most-used rhetorical weapons
in the right wing’s arsenal; the incredibly lame argument that corporations don’t pay taxes,
people do.

(…) The Democrats supporting the current legislation have
assured an anxious electorate that whatever funds are used to create whatever
regulatory scheme created will come from the banks, not the taxpayers. Let me
emphasize that so that even casual readers will catch it: the Democrats promise
that you won't pay for their legislation, banks will.


Since when have
corporations ever paid taxes, fees or penalties? Employees end up paying in the
form of lower salaries and benefits. Customers end up paying in the form of
higher costs.

And in this case, every
account holder will be forced to pay higher fees on their checking account and
savings account. That's you, my friendly reader. Can you say "checkbook
tax"? I can, and I think lots of candidates will be saying it come
November. Is that what you really want to do to your constituents, Senator
Lincoln? Is that what you really want to explain on the campaign trail, Senator

The sophistry in the above can’t be over-emphasized.

If corporations never pay taxes, fees or penalties, then
please explain why the largest ones have such huge legal departments in order
to fight these things? I mean, all they're going to do is pass it all on to consumers, so why fight it?

As I said, this is a common argument for right wingers to
use against any sort of tax increase on corporations and it’s actually pretty
easy to explode. If you're going to take the position that corporations don’t
pay taxes, then you have to stop bitching about your own taxes, because you don’t
actually pay them, either; your employer does. Of course, that’s not true,
either; your employer can’t possibly pay your taxes unless someone pays them
for the goods and services they provide. But wait; someone paid the people who
paid your employer, so that won’t work, either…

See what I mean? Based on the ludicrous concept that corporations don't pay taxes, the reality would have to be that no one actually pays taxes. The entire economy works based on the
premise that money circulates through it, and the concept that a corporation
simply passes on all of its expenses to its customers depends entirely upon
their competition and their customers’ willingness to pay for their product or

The way the Dodd system works is, banks pay into a fund, and
if a bank fails, that fund decides whether or not to bail out the bank, or kill it and sell
off the pieces. This concept works on roughly the same principle as the FDIC. When a bank
fails, the money to rescue it and make depositors whole doesn’t come from taxpayers; it comes from the FDIC
trust fund. And banks pay into that fund, and have been paying into that fund
since the 1930s. Yet, they all offer free checking, and free ATM use; go
figure. Of course, that's not to say that banks don't charge outrageous fees on some "services." But if the fees are so high now, does Luntz really think people will notice an increase to pay for

Ah, but Luntz isn’t finished. He’s used the “Wall Street
likes it, so it must be bad” argument, which wasn’t true. Then, he switched to
the “checkbook tax” argument, which is complete crap, but the word "tax" sends right wing clowns and teabaggers into a major frenzy. Let’s just eliminate the
FDIC and FSLIC, while we’re at it, based on "Luntz Logic"? Now, he’s about to use the “scary lobbyists”

You’ve seen this "evil lobbyists" argument from both sides, but while the
left uses it, the right excels at manipulating people with it. Check this out:

Regardless of what side you're on, the financial reform bill
is special interest heaven — a bill written by lobbyists, for lobbyists, and
will probably be implemented by lobbyists. The Dodd bill has carve-outs right
from the get-go. Real estate agents, title companies, the Farm Credit system,
even Fannie Mae and Freddie Mae are exempt from its onerous and costly
provisions. And for everyone else, it's been a special interest feeding frenzy.

More than 130 companies
have publicly hired lobbyists seeking their own loophole. Mars Candy wants to
continue to use derivatives to hedge against price hikes in sugar and
chocolate, so they've hired a lobbyist. Harley Davidson wants to protect dealer
financing of their bikes, so they've hired a lobbyist. And eBay wants to not
harm its subsidiary, PayPal, so they've hired … well … a team of lobbyists.

But most average Americans
— the ones who bailed Wall Street out in the first place — cannot afford
lobbyists, and won't be exempted from the legislation.

If the bill is a “special interest heaven,” then why
are Republicans trying to kill it? I mean, if they wanted “better” financial
services reform, they had more than enough opportunity when they held both the
House and Senate and the White House. And what was about to happen to the
financial services industry was pretty well known by 2006, when they were in
charge, and could have "saved the day."  Yet, while the Republicans spent
the last 30 years removing regulations that had served to turn us into an
economic superpower, we’re suddenly supposed to worry because there are (GASP!)
lobbyists in Washington?

But this argument falls flat on its face even without all of that.

The man who crafted this particular bill is Christopher Dodd. Forget
the fact that Chris Dodd is one of the more honest politicians in Washington,
which is not a high bar, admittedly, but the fact is, Dodd has
announced his retirement. He’s not running for reelection. Therefore, the
initial bill was crafted by a guy who just wants to reform Wall Street, who has
no need to raise money or to court voters.

Luntz’ implication is that the mere presence of lobbyists in
Washington should signal to voters that this is a bad bill, which is wholly
ridiculous. It also demonstrates just how weak Frank Luntz’ arguments are when
he tries to claim this bill is bad for Democrats. Seriously; we just
experienced six years of Republican Congresspersons employing lobbyists to
WRITE bills, and eight years of a Republican administration that not only put
lobbyists for moneyed interests into key positions in its own administration,
but let lobbyists write administration policy. Why would any Republican  even want to mention lobbyists at this
point in time?

By the way, did you notice the lobbyists he mentioned? Look at the list again. The lobbyists he mentioned — the ones we should
fear – are all for industries that have direct contact with the public. They are
lobbyists for companies and industries that have direct contact with
consumers.  Think about that a moment.

And that’s pretty much his entire argument against the
financial services reform bill. Go read the rest of the article, where he goes
off on another rant about the health care bill, because that's so relevant to
Wall Street reform.

And now you know just how good a bill this is. When an
uber-Republican can only bring out three extremely lame and generalized
arguments, you know they’re out of ammunition and they’re forced to throw the

Oh, and about the health care rant; all summer, we’re going
to hear all about how bad health reform is. But the fact is, about the time swing
voters actually start thinking about the coming election, millions of people
will be signing up for health insurance who haven’t been allowed to for years.
Good luck, Republicans.

Comments are closed.