BAIR REJECTS MCCONNELL TALKING POINTS…. Finding a credible figure who agrees with Senate Republican talking points on Wall Street reform is proving to be very difficult. Senate Minority Leader Mitch McConnell (R-Ky.) is not only lying, he’s doing so in such a way as to make it obvious.
Consider FDIC Chair Sheila Bair’s comments to American Banker yesterday:
Would this bill perpetuate bailouts?
BAIR: The status quo is bailouts. That’s what we have now. If you don’t do anything, you are going to keep having bailouts. Bankruptcy doesn’t work — we saw that with Lehman Brothers.
But does this bill stop them from happening?
BAIR: It makes them impossible and it should. We worked really hard to squeeze bailout language out of this bill. The construct is you can’t bail out an individual institution — you just can’t do it.
In a true liquidity crisis, the FDIC and the Fed can provide systemwide support in terms of liquidity support — lending and debt guarantees — but even then, a default would trigger resolution or bankruptcy.
Asked specifically if reform will end the “too big to fail” phenemenon, Bair told the truth: “I think it will go a long way.”
And who’s Sheila Bair? She’s not exactly a liberal activist — she’s a Bush/Cheney appointee to the FDIC, a former assistant Treasury secretary in the Bush administration, and a former aide to Bob Dole.
I know the political world likes to put on airs, and pretend that it’s impolite to expose a high-ranking official as a dishonest hack. But this week, no one wants to defend Mitch McConnell’s abject nonsense.