Via Matt Yglesias, here is Gillian Tett arguing that a populist backlash against bankers could be headed our way when we have to start getting serious about cutting deficits in 2011-13:
Perhaps that will occur when income taxes are hiked above 50 per cent. Or maybe when hospital budgets are cut, or military spending slashed….“Don’t the bankers realise what could be coming?” I heard one senior western finance official tell a room full of bankers this week, as he argued — with passion and a sense of desperation — that it would be a mistake for banks to pay big bonuses.
Well, stranger things have happened, I suppose, but here’s my guess about who will get the blame if we raise taxes or slash spending a couple of years from now: Democrats. End of story. By then, bankers will be yesterday’s news, but Republicans and the media will still be eager to haul out the liberal-tax-and-spend narrative and lay into it with gusto. The fact that the financial meltdown happened under a GOP president, the bank bailout was championed by a GOP treasury secretary, and monetary policy was controlled by a GOP Fed chairman won’t matter a whit. Democrats will be in power and Democrats will get the blame.
Does anyone seriously want to argue that this isn’t how things will play out?