On the Republicans’ vote against cloture on the financial-reform bill:
The president had said . . . he’s dismayed.
[On the contrary:] He is joyful. He couldn’t be more happy about the vote. It was engineered precisely by the Democrats to produce the effect it did, which is to get the Republicans to appear to be standing in the way of reform, which the president has said, in the speech he made last week, you either are in favor of reform, which means my bill, or, you’re against it, so you’re a Wall Streeter. …
The problem is that for the Republicans: Unless they produce a bill quickly — which they should, they’ve got to have an alternative — they are going to get hit in November, because it’s very hard to explain in a sound bite or in a 30-second ad what’s wrong with the [Democratic] bill.
I’ll give one shot at it, and the weakness of my attempt will show you how hard it is: Juan talked about this is just like the FDIC guaranteeing all the banks. Yes, but it guarantees all the banks equally, so nobody has an advantage.
In the bill here, it’s only the big guys — the guys who pose a systemic risk — who get the bailout, which means that instantly you‘ve got a two-tiered system.
The president said in the speech in New York: Unless your business model is to bilk the consumer you won’t be afraid of this. [But] If you are a smaller institution lending you won’t like the bill, not because you bilk your customers, but because the big guys will be able to borrow and to lend at lower rates because they now have an implicit [federal] guarantee.
And secondly, that increases the chances of a bailout because, unlike in October 2008 when you had to get the Congress on board for the TARP, under the bill the Treasury acts unilaterally. . . .
There are very strong arguments why it [the Democratic bill] does exactly what the president is saying it does not, but it’s hard to make that case in a sound bite, which is why he likes the political outcome [of a Republican filibuster].
On the Democrats’ sudden push for an immigration bill:
I think Republicans are rather overconfident and complacent about how well they’ll do in November. They assume the electorate will be same in January when they won Massachusetts. But Obama is not stupid. He ran a great campaign in 2008 and this is all about the campaign for November 2010.
There is an old adage in Washington, sometimes you can choose a bill or you can choose an issue. The Democrats know they are not going to get an immigration bill out of this. They want the issue and they want it now.
And Harry Reid wants it personally because he thinks it’s a Hail Mary that might help him in Nevada where he is way behind, and it might. And Obama wants it because he thinks it will galvanize his base.
He said over the weekend he wants a renewal of the coalition that elected him, and he said young people, African-Americans, Latinos. And that is his constituency which up until now has not been really enthused about his presidency. This bill is a way to rile it up in the way that conservative elements have been riled up over health care and all the other over-extension of the government.
This is smart, tactical politics — cynical as policy, but we shouldn’t underestimate how smart tactically he is. . . .