Argle-Bargle? Or Foofaraw? (Financial Reform Edition)

Levity aside, today’s papers are full of stories about the state of financial reform. In particular, the focus is on yesterday’s meeting at the White House between President Obama and Congressional Leaders. Unfortunately, not everyone emerged singing Kumbaya:

“As Republican leaders left the White House, they called on Democrats to restart bipartisan talks about the overall shape of the legislation. Senate Minority Leader Mitch McConnell (Ky.), echoing comments he made Tuesday, said the bill amounts to an ‘endless taxpayer bailout for Wall Street banks.'”

The Democratic leadership and President Obama obviously disagreed, according to Press Secretary Robert Gibbs:

“[The President] reaffirmed his belief that we must end taxpayer bailouts, end “Too Big To Fail” and that he would not accept a bill that did not pass that test…As he has with other opponents of reform, the President also encouraged attendees to stop the campaign of misinformation being run by financial industry lobbyists and representatives of trade groups.”

But really, who can you trust when it comes to these matters? I like to look to the experts, and fortunately, Sheila Bair (the Republican head of the FDIC) gives an interview in today’s American Banker (subscription required) in which she’s asked repeatedly if different mechanisms in the Senate bill could lead to bailouts, some of her answers:

“The status quo is bailouts…If you don’t do anything, you are going to keep having bailouts.”

“This bill makes [bailouts] impossible and it should”

“It’s resolution or bankruptcy, no questions. It is mandatory…It’s a terrible incentive not to default and that’s what you want.”

“No, [there’s no way left for the government to bail out a bank] and that’s the whole idea.”

“Foofaraw.”

Ok, I made the last one up. But Chairman Bair seems pretty clear on the bailout question and it seems to me that she’s in a position to know.