Campaign 2012: Jon Huntsman bids for the Occupy Wall Street vote
Here's a question on at least a few GOP voters' minds (or maybe just a few): Where was Jon Huntsman Tuesday night? Because he certainly wasn't on stage in Las Vegas for the 712th Republican presidential candidates' debate. The former governor of Utah declined an invitation to participate, in apparent protest of the Nevada Republican Party's threat to hold its caucus ahead of New Hampshire's presidential primary. He may not be invited to many more of the debates; the most recent CNN/Opinion Research Poll showed him attracting only 1% of the vote, half the support needed to appear on stage (and one-sixth the support of "None of the Above.")
But Huntsman stayed busy, stumping in New Hampshire and penning an op-ed for the Wall Street Journal about ... bank regulation. Now there's a topic dear to the heart of tent-residing Americans! After blaming the government for the financial crisis (presumably because Fannie Mae invented "liar" loans and the Community Reinvestment Act made mortgage brokers go all in on subprime loans ... what, they didn't?), he warned that the new regulations ordered by Congress set "the outlines of the next financial crisis and bailouts."
Huntsman may be trailing badly in the polls, but he recognizes a good opportunity when he sees one. Unlike Herman Cain, who's been oddly tone-deaf on this issue, Huntsman recognizes that the average American shares Occupy Wall Street's resentment of the bank bailouts, even if most of us still have jobs and prefer indoor plumbing to port-a-potties. And Republicans are united in their denunciation of the Dodd-Frank law enacted in the wake of the subprime meltdown.
In short, there's a convergence of left and right around the issue of bank rescues. In his op-ed, Huntsman argues that Dodd-Frank provides a "backstop" to banks that are too big to fail. That reassurance enables these institutions to borrow money at lower interest rates than their competitors, tilting the playing field. The right response, he writes, is to remove that backstop and make sure big institutions can fail without taking down the whole U.S. economy.
That's a common position among conservatives, although Democrats argue strenuously (and, I think, persuasively) that there is no backstop in Dodd-Frank. Where Huntsman veers off the GOP line, though, is in his suggestions for what to do in lieu of Dodd-Frank. One idea he floats is to impose a new tax (gasp!) on banks above a certain size "to cover the cost they would impose on taxpayers in a bailout." That fee would help level the playing field, while also giving banks that grow too large an incentive to get smaller, he argues. Another Huntsman idea is to eliminate the tax break (gasp!) for interest payments, which encourages businesses to raise money by borrowing instead of selling shares.
Charging fees on banks that are dangerously big or engaging in unusually risky activities makes a lot of sense. Becoming too big to fail should be too expensive to manage. And the tax code's preferential treatment for debt is mystifying, especially where big business is concerned. I mean, why should the government encourage companies to take on more risk, which is what borrowing represents? Still, advocating a tax increase on banks and borrowers doesn't seem like the right note to strike in a GOP primary. Maybe that's why Huntsman is still trailing "None of the Above."
[For the record, 4:42 p.m., Oct 19: The initial version of this post suggested that Huntsman wasn't at the Las Vegas debate because of his low poll numbers. As alert reader Amos Rothstein pointed out, however, Huntsman met the requirements for being on stage and was invited to attend, but chose not to. The current version makes that point clear.]
-- Jon Healey
Credit: Jim Cole / Associated Press