At this still, admittedly, early date, Claire McCaskill, Missouri’s Democratic Senate incumbent, is running eight points, 44-52, behind wet-behind-the-ears AG Josh Hawley, who is probably her best known challenger from among the GOP primary lineup. How can this be, you ask? McCaskill’s got the money, she’s been working hard to make sure that out-state Missourian’s know that she understands rural “Missouri values,” trekking from one town hall to another, tacking carefully and skillfully to the center in an effort to cultivate those famous moderates we keep hearing about – although we rarely seem to see them nowadays.
But recent events leave me wondering if McCaskill’s might have honed in on the wrong issue in order to prove her non-partisan bona fides. I’m referring to her support for a Republican bill that would once again deregulate banks. As Garry Rivlin and Susan Antilla of The Intercept describe it:
… the Economic Growth, Regulatory Relief, and Consumer Protection Act, […] represents the greatest threat to the Dodd-Frank financial reform law since its passage in 2010. The bill would relieve all but the country’s largest dozen banks of increased scrutiny and ease mortgage rules imposed after the financial crisis. It would undermine fair lending rules designed to counteract race discrimination and weaken the Volcker rule, which limits a bank’s ability to make speculative trades with federally insured deposits. …
In spite of the fact that bank earnings have continuously surged since 2010, proponents speciously insist that, due to the act, banks “are suffering and so, by extension, are consumers, businesses, and the economy at large.” Part and parcel of the GOP belief, reinforced by the Liar-in-Chief in the White House, that if you say it, it will be so, reality be dammed.
Many of the red-state Democrats who support the bill, like McCaskill, purport to buy into the argument that Dodd-Frank needs to be revised to help suffering community banks that the law has, they assert, disadvantaged. However, as Rivlin and Antilla report, “A 2017 FDIC report shows that deposits in community banks have grown in each of the past six years. Another report showed that 96 percent of the country’s 5,294 community banks were profitable, as of the third quarter of 2017.” If you’re interested in learning more about the problems with this legislation, including the effect on community banks, noted economist Jared Bernstein spells some of them out here in greater – but not too lengthy or ponderous -detail.
The issue for McCaskill, though, could go beyond pandering through bad policy, and might actually cost her politically. Consider, for example, the speculation that banking champion GOP Rep. Ann Wagner may be vulnerable this time around. It’s true that there are several reasons other than her dedication to fighting for the banks that so generously fund her that might leave her in a little shakier position than in the past. Her district has changed somewhat, she plays shy with her constituents in an effort to avoid controversy – and dim any potential sunlight on her priorities. There is, of course, also some indication that the hard-core Trumpies may not totally buy her Trump-MAGA conversion and are likely put off by her coy country club Republican aura.
But it’s equally true that there’s somewhat louder discussion than in past years about Wagner’s single-minded efforts to gut the financial rules, the fiduciary rule that protected investors from dishonest financial advisors in particular. People aren’t always as stupid as politicians think they are, particularly when it involves financial survival issues. And don’t forget, lots of Trump’s so-called populist voters were motivated by anger at Wall-street and the big banks – and there are those among them who are feeling a bit disillusioned right now.
McCaskill should take care – linking herself with folks like Ann Wagner and Blaine Luetkemeyer, big-time Missouri shills for the banking industry, might just prove to be the proverbial millstone that could harm more than it helps with contrary voters. Oh, and there’s always the damage the actual policy may do to all of us. Don’t any of these Democratic fools playing the bipartisan game remember 2008?
ADDENDUM: Kevin Drum points out that the Dodd-Frank roll-back will also gut provisions that prevent racial redlining, voicing his – and my dismay – that any Democrats – are you listening Senator McCaskill – are supporting this piece of drek.