The Financial Reform Kabuki
Posted on April 20, 2010
I think there will be a deal on financial services reform, or Wall Street reform as the White House now calls it.But first there has to be the requisite Kabuki dance.
According to Wikipedia, “in common English usage, a Kabuki dance is an activity or drama carried out in real life in a predictable or stylized fashion, reminiscent of the Kabuki style of Japanese stage play.”
Unlike in health care reform, where the Kabuki theater pointed towards conflict, this play leads, in my estimation, towards resolution.
It started with Mitch McConnell, the Senate minority leader, firing a warning shot about the true nature of the Administration’s proposals. He said it was an effort to give Wall Street a permanent bailout. The language was carefully constructed and highly stylized to achieve three goals: To put the administration on the defensive, to achieve unity within his own caucus, and to take care of the concerns of his own community bankers.
This Kabuki thrust achieved its purpose. The Administration reacted defensively, the Republicans stayed united, and McConnell’s home state bankers were pleased that the Minority leader was taking a leading role.
The President reacted in an equally predictable fashion. He is going to Wall Street’s backyard to give a tough speech about the evils of the industry and the attributes of his proposal. For an additional bit of drama, his Securities and Exchange Commission filed a lawsuit against the top Wall Street firm, all in perfect timing as a way to put one of the biggest Democratic political contributors on the hot seat to show how the Democrats can play hard ball too.
There are other players in the drama. Bob Corker, the Tennessee Republican Senator, plays almost a Hamlet role. First, he is going to get a deal. Then, he can’t get a deal. Then, he is going to try to get a deal again.
Susan Collins, in another dramatic moment, announces that she will support her leader in his efforts at unity, not necessarily to filibuster, but rather to get the best deal possible for the Republicans.
All of this stylized thrust and parrying is happening in foreground. In the background, the real deal is getting done, between the Senate Banking Chairman Chris Dodd and his counterpart, Ranking Member Richard Shelby.
There are a lot of moving parts in this particular Kabuki Theater, and to the untrained eye, it can seem to be quite boring, just like the real Kabuki Theater. I went to one once in Japan, and I could barely keep my eyes open.
But if you look closely enough, you can see that eventually, this will lead to a bipartisan bill. At least, that’s how I see it.