Matt Yglesias is just wrong here. He thinks it’s a bad thing that the House Financial Services chair will be a Republican who said, “Washington and the regulators are there to serve the banks.” I think it’s terrific, and given his propensity for making statements like this, it was a huge mistake for Boehner to let him serve in the role, and one that will likely keep helping Democrats once the 112th Congress gets sworn in. Bachus isn’t one to cloak his protect-the-rich antics in platitudes about Burkean caution, he just states it baldly, in the finest tradition of corrupt politicians. What’s more, if his threats to cut funding to regulators aren’t just bluster, then I think it would be crazy for regulators not to force a confrontation with Bachus and even if Bachus won the battle, it would be the sort of loss that would ensure he loses the war.

A lot of liberals have fretted over Republican hypocrisy on TARP and the auto industry bailout, which were devised and initially implemented by a Republican president, and subsequently portrayed as voluntary ideological maneuvers on the part of Obama. There’s the additional matter of their harnessing the public’s anger at the banks while sucking up to the finance industry. It’s just not fair that this should not cause an uproar, and I have personally felt that frustration too. But the fact is that a confrontation with Bachus is win-win–either he backs off and regulators get to do their thing, or he makes a mistake and cuts funding, which would infuriate Democrats and lend itself to a real populist case for the left that is so obvious I scarcely need to elaborate on it (high points: record profits, Wall Street bonuses, campaign contributions, etc.). Such a move would obliterate the populist posturing of Republicans in a single stroke, and that would redound to the Democrats’ favor.

That’s my theory, anyway. Let’s be honest: while there are good things in the Dodd-Frank Bill, things that will give the feds the tools to deal with another Wall Street meltdown when it happens, many of the best provisions were watered down, dropped or included only in embryonic form. I’ve heard it described as a “B” bill on a scale from A-F, and I think that’s a fair approximation of its value. But Yglesias seems to be fretting over keeping the only partly-adequate measures instead of fulfilling the bill’s promise. The only way that happens is if public anger forces politicians to make it stronger. And with Republicans in the majority, Democrats will have partisan and populist reasons to push in that direction, especially with the Blue Dogs–those incipient defenders of finance–largely gone. The smartest course for the Republicans would be to keep themselves from getting too vulnerable to the very populist anger that got them in power in the first place, probably by largely accepting Dodd-Frank in exchange for dropping a few provisions they don’t like. It does not appear they want to do that, and Democrats should absolutely capitalize on any mistakes that are made.