This morning, a monumental sea change occurred in the world of American politics. The SCOTUS, in a vote of 5-4, struck down some of the key provisions of the nation's campaign finance laws.
A friend of mine told me shortly after the ruling came out that "someone needed to scan the Supreme Court parking lot for brand new Bentleys with 'Romney45' license tags."
All jokes aside, and while I haven't had time to read the decision, it appears far-reaching, but just how far-reaching remains unclear. Justice Kennedy, writing for the majority, states that the "government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether."
The impact of this ruling will not be known until we understand how far those government restrictions can go but the timing is incredible.
This morning the President is due to present a new wave of tough regulatory restrictions on large financial institutions with Paul Volcker, former chairman of the Federal Reserve, standing by his side. Volcker has been drumming up support for the re-institution of Glass-Steagall on Wall St. for months now. Volcker is also chairman of the President's council of economic advisors. There have been many reports that he had been frozen out of economic policy making at the White House but today was to demonstrate Volcker's growing influence as the President proposed tough restrictions on prop trading at large banks.
Obama himself told ABC News yesterday that he was getting ready to have "a big fight with the banks." News of the new restrictions and his hard new line have sent the FTSE Global Banking index and the S&P 500 tumbling. Goldman, which announced stellar earnings today, is down nearly 3% on todays' news. It seems, or seemed, that Wall St. is in for a tough one.
Wrong.
With today's SCOTUS ruling, Wall St. all of a sudden is back in the fight against the restrictions. Money is the mother's milk of politics and Tuesday's election results in Mass. show that the Democrats are vulnerable. Already, the healthcare bill has been scaled back. Today's ruling means that large corporations and banks can pour money into tight races. They can influence decision-making in Washington in ways they haven't been able to for decades. What seemed like a sure fire bet at tough restrictions last night, all of a sudden doesn't seem so sure as of this morning.
We don't know the full extent of the ruling yet but with so much new money flowing into this year's midterms, I suspect the President's "big fight" just got a lot tougher.
What I'm reading:
Stocks tumble as Obama takes on banks, the Financial Times.
Francois Obama, Shawn Tully, Fortune.
Court decision opens floodgates for corporate political spending, Kenneth P. Vogel, Politico
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