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Morning Jay: Wall Street Protest a Sign of Things to Come?

6:00 AM, Oct 7, 2011 • By JAY COST
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What to make of these anti-Wall Street protests? The Democrats seem to think they can tap into the anti-banking sentiment these protesters embody … to attack the Republicans:

Will this work? Not in the short term. For two reasons.

First, the Democrats have more or less been making the same charge against the Republicans since the populist-infused candidacy of William Jennings Bryan in 1896. Since then, the GOP has won a majority of presidential elections, meaning the charge of Republican corporate cronyism is not a sufficient condition for Democratic victory. This attack only works when times are tough (which they are) and Republicans are in charge (which they aren’t).

Second, the GOP’s connection to Wall Street is more strained now than at any point since perhaps JFK’s presidency. Let us recall that it was Obama – not McCain – who picked up the most money from the banking, hedge fund, and securities sectors. It was a majority of House Democrats – not Republicans – who voted for TARP. And it was the Democratic financial reform bill – not the GOP’s – that ignored Fannie & Freddie and watered down the Volcker Rule to irrelevance. Tim Geithner's financial bailout plan prompted even John Heilemann (no GOP partisan!) to declare that it was “strikingly favorable to Wall Street.” So, if there was ever a cycle that the charge--“The GOP is a tool of fat cats!”--won’t stick, it is 2012.

Over the long term, however, it’s a different story, and Republicans should pay close attention to what’s happening. The protests on Wall Street this month are only a taste of what will come should the GOP win the White House in 2013.

The experience of Richard Nixon is instructive. The Democratic party tore itself to pieces in Chicago at its 1968 convention, and Nixon won a narrow victory that year by saying extremely little about Vietnam, promising only an “honorable end” to the war. The anti-war left only gave Nixon a nine-month grace period before the massive, nationwide anti-war protest known as the Moratorium, held in October 1969. Worse, the Nixon administration soon suffered hig -profile leaks that undermined the president’s bargaining position vis-à-vis the Communist East, as well as harsh criticism from the mainstream media for the progress being made in Vietnam. All of this began within 20 months of his first inauguration, and by the end, as Nixon advisor Daniel Patrick Moynihan said, “Half the country seemed to think he started (the war)!” The rise of the anti-war left pushed the Nixon team to extreme, often illegal ends – most infamously with the plumbers, who plugged the leak of classified information, and of course the Watergate burglary.

If the Republicans inherit the White House amid continued economic weakness, they’ll be lucky if the left gives them the nine months they gifted Nixon. The better bet is that we’ll hear a cacophony of “Romney’s recession” (or some appropriate alliteration should Perry win) from the liberals at the first hint of bad economic news in 2013. The mainstream media won’t be very far behind. All in all, it could be worse than it was for Nixon in the late 1960s. And to put the idea of “worse than Nixon” into perspective, it’s worth remembering what Charles Colson once said about being at the White House in the 1960s – “like living in a bunker.”

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