Jamie Dimon's $3 billion-and-counting blunder at J.P. Morgan comes at a bad time for Mitt Romney. At a time when Bain capitol diminished as an issue, the fiasco at another bank on the derivatives front suddenly puts vigorous regulation in a positive light. What was dismissed as a "tempest in a teapot" suddenly seems bigger than first reported.
During the Republican presidential primaries, Newt Gingrich raised the specter of Romney's firm engagement in essentially job-destroying practices. It backfired with Republicans blithely dismissing any criticism with a "that's capitalism" explanation. Indeed, Gingrich was practically dragged through a renunciation ritual where he would vow not to sway or deviate from GOP fundamentals. No compromise with the mythical little green books of Ron Paul or the libertarian approach to economics.
But J.P. Morgan demonstrated just how unwieldy the system has become when a buccaneer trader in London was essentially fleeced by two enterprising hedge fund managers. Apparently, the bankers in New York were too nonplused at where their money was heading. Too fast a process for too slow a system. Suddenly, Dodd-Frank does not appear as intrusive, and Barack Obama can posture as being merely prudent instead of an overage strangler of entrepreneurial dreams.
Certainly the G-8 meeting at Camp David underscored the shift away from Paul Ryan's austerity agenda and return to stimulus. Francois Hollande's election as France's second socialist president and Angela Merkel's CDU defeat to the German SPD in a major state signaled that the voters have given a second thought to Daddy Warbuck's style of belt-tightening -not to mention the chaos in Greece.
Certainly Obama thrust himself back onto center stage as a jobs creator by vowing "that more must be done to promote growth and job creation right now." Not unlike Richard Nixon in 1971 when he shelved years of GOP orthodoxy in favor of wage and price controls, Obama has challenged the notion that it is all about deficits and strong currency. Suddenly, Ryan's bite the bullet approach seems like Ebenezer Scrooge's lament on why he failed to give more to help the poor: "Are there no prisons, are there no workhouses?" Obama, like Nixon, is placing himself in a position of being the only barrier against social catastrophe.
Moreover, Romney's approach to Obama, at least on economics, is becoming reactive. His claim to have created 100,000 jobs through the ostensible munificents of Bain has been widely discounted. As well, his assertion that 100,000 auto jobs were lost on Obama's watch has been equally spurious. Slowly, Romney is becoming the heir to George W. Bush's worst legacy, which was a hands-off approach to high finance. With a trust more theological than economic, Mitt is being slowly backed into a corner.
Perhaps he might remember his moderate-to-liberal record as governor of Massachusetts before it is over. Romney's tilt to right-wing orthodoxy may have gotten him through the primaries, but augers for a tough transition to the center in the general election. As Ronald Reagan, he is simply not credible - if not on style points alone. But he might make it as a "compassionate conservative," hard-headed, but soft-hearted as well. But he seems to lack the DNA for graciousness. When Jimmy Carter praised him - Mitt attacked the former president.
If Obama becomes the defender of shared sacrifice, he might make himself St. George versus the Republican dragon. Certainly, Franklin Roosevelt declaring "he welcomed the hatred" of his enemies, turned it on the GOP. Meanwhile, Romney squanders an opportunity to declare, as Nixon did in 1972, that the contest was about "change that will work versus change that will not work." Thanks to his high finance buddies and Republican idealogues, he cannot seem to shake his image as the status quo candidate.