The Washington Post reported this morning on GOP efforts to portray financial regulatory reform as a bailout without giving any indication as to whether this criticism was based in reality. In so doing, the Post helped the GOP push a talking point formulated by Frank Luntz, who advised that linking the bill to bank bailouts is the best possible way to derail reform.
Pushing a false Republican talking point, Fox Business Network's Eric Bolling claimed that Democrats' financial reform bill includes "a $50 billion slush fund so that if a firm, company is too big to fail, maybe they can tap into that and maybe not allow it to fail." In fact, the "orderly liquidation fund," which would be paid for by financial institutions, would be used to dismantle a failing firm and "is anything but a bailout," in the words of Republican Sen. Bob Corker.
Following the announcement that the Security and Exchange Commission is investigating the investment firm Goldman Sachs for fraud, an April 19 FoxNews.com article reported that the "White House...strongly denied any involvement in the timing of the high-profile fraud case against Goldman Sachs," after Republicans and their media acolytes suggested the charges were timed to help pass financial reform. Fox News reported that "Republicans also accused the administration of biting the hand that fed it, since Goldman Sachs was President Obama's top Wall Street contributor during the 2008 campaign, with employees donating nearly $1 million, according to the Center for Responsive Politics," and went on to quote Rep. John Boehner as asking "just whose side is President Obama on?" Pause for reaction. First of all, the SEC is a non-partisan body that is operating independent of the White House. Secondly, the accusation that the President is "biting the hand that fed it" makes absolutely no sense. Wouldn't the real scandal be if Obama interfered with a SEC investigation because the subject of the investigation was a large campaign contributor of his?
Fox & Friends and guest Glenn Beck falsely suggested that a $50 billion liquidation fund in Sen. Chris Dodd's financial regulation reform bill would "save" failing financial institutions and "keep them in business." In fact, the fund, which would be paid for by financial institutions, would be used to dismantle a failing firm and "is anything but a bailout," in the words of Republican Sen. Bob Corker.
Wall Street Journal columnist John Fund lambasted Wall Street reform legislation for setting up a fund to pay for future bailouts -- an utter falsehood -- and for allowing the government to liquidate failing firms, which is the opposite of a bailout. Thus, in fewer than 40 words, Fund managed to expose right-wing attacks as completely hollow efforts to derail efforts to strengthen Wall Street regulation.
After the Security and Exchange Commission accused Goldman Sachs of fraud, numerous right-wing media figures have accused the Obama administration of attempting "to destroy Goldman Sachs" in order to "shift public opinion" in favor of financial reform. Simultaneously, conservative media have also falsely claimed that the financial reform legislation creates a "permanent bailout fund," which is "the payoff" Wall Street "has been waiting for."
John Fund falsely claimed that financial regulatory reform "sets up a $50 billion fund for future bailouts." In fact, a provision currently in the legislation would create a $50 billion fund paid for by the financial services industry to provide for the orderly liquidation of failing firms and would in no way bail them out.
From the April 14 edition of Fox News' The O'Reilly Factor:
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Conservative media have attacked financial reform legislation under consideration in Congress by stating that it establishes a "permanent bailout" or "bailouts forever" -- echoing language recommended by Republican strategist Frank Luntz to derail the bill. But far from encouraging "bailouts" for failing financial firms, the bill would establish the government's authority to liquidate them.