In a vote that is both more and less significant than it’s been portrayed in the media, Senate Republicans held together to deny Harry Reid and Chris Dodd the single Republican vote they need to begin full debate on Dodd’s financial regulatory reform bill.  One Democrat, Ben Nelson of Nebraska, sided with the GOP.

Dodd’s bill is full of big-government “solutions” – which is to say landmines of unintended consequences of the same sort that caused the housing and economic meltdowns and Republicans are right to oppose it.

All the talk by Democrats will be about how Republicans are siding with investment banks – with the greedy, fraudulent Goldman Sachs as  characterized by criminal charges and leaked emails suspiciously timed to coincide with the Dems’ push for this bill.

While it is understandable that Republicans would be wary of being seen as “obstructionist” and “in the pocket of the banks", the fact that they’re already signaling that a financial regulation bill will pass “by a wide margin” is troubling and massively weakens the impact of their voting as a block yesterday.  It’s like a poker player calling a bet while saying to his competition, “if you raise, I’ll almost certainly fold."  And that player isn’t known for bluffing very well.

Dodd’s bill contains a $50-billion fund which will make bailouts a permanent fixture of the American economy.  It contains a consumer protection agency which will over-regulate and micro-manage everything from credit cards to mortgages.  It attacks the profitability of banks by limiting their ability to trade on a proprietary basis but does nothing to limit the destructive influence of Fannie Mae and Freddie Mac which have burned through tens of billions of dollars of taxpayer money. And it will allow government to shut down and break up firms which they suspect might pose “systemic risk” and it eliminates the right of a court to review the government’s actions.  No chance of political shenanigans there, right?

National Review has a somewhat more detailed analysis of four major problems with Dodd’s current bill HERE .

This is the sort of analysis we’re seeing in the mainstream media (from a Bloomberg News article ): “It’s a lose-lose for Republicans,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia. “Anybody who votes against this, it will be used against them in any election coming up.”

Republicans should take a page about Barack Obama’s book and say “bring it on".  The people who matter in electoral politics in this country, which is to say the independent voters, no longer give Democrats the benefit of the doubt in terms of the honesty of their rhetoric.  Independents know that the Democrats are now given to lying as a standard tool in their legislative toolbox.  They will be receptive to at least hearing the arguments by Republicans about how the bill will limit their freedom and increase their costs with extremely little benefit to consumers and investors.

In any case, the fact that Republicans don’t seem willing to fight the rhetorical battle dramatically reduces their bargaining leverage going forward.  One thing which could make a difference in regaining some of that leverage would be if Republicans proposed their own bill and tried to force Dems to use that as a starting point.  It might not get too far, but it would show a good-faith effort (even if that effort is the usual misguided attempt of politicians to say they’re “doing something” well after the horse has left the barn and without learning the consistent lesson that entrepreneurs are always a step ahead of regulators.) There have been rumors of a GOP bill, but I won’t believe it until I see it.

So, in the sense of actually getting a decent financial regulation bill (yes, I realize that’s essentially oxymoronic) or preventing the eventual passage of a bill that’s just slightly less bad, the Republicans’ vote is less important than it seems.

On the other hand, I think the important story is the ability of Senate Minority Leader Mitch McConnell to keep the party’s driftwood (with names like Snowe, Collins, Brown, and Graham) from drifting to their usual “anything to get along” position. It’s at least a hint that such solidarity could be reconstituted in the future on other legislative items and that the election of Scott Brown really was nearly as big a deal as it was portrayed at the time.

Back to the electoral impact: Republicans must not fear being portrayed as the Party of No.  Sticking together bolsters a valuable reputation (at least valuable at this time) as the Party of “Hell NO"!  Politicians of both political parties have a tendency at one time or another to cave in because they believe that Americans are in large numbers stupid and uninformed.  While you’ll never get rich betting on the political erudition of the average citizen, an activated and well-informed electorate is a friend of conservative principles and legislators who impede the growth of government.  This is of course in direct contrast to the last election season which was filled with activated but uninformed – even brainwashed – citizens, many of whom, at least many of those above the age of 30, feel guilty either for being so uninformed or for having helped bring this current tyrannical regime into power.

One last thought, from the “if it’s good for the goose…” files:  Barack Obama ran on a platform of not just bipartianship but post-partisanship, along with being “post-racial"; both have turned out to be not just wrong, but outright lies.  He is the most partisan president, in charge of the most racist administration this nation has seen in generations.  When a single Republican, Joseph Cao of Louisiana, voted with the Democrats on the House’s health reform/takeover bill, Nancy Pelosi puffed that the bill was “bipartisan".  Therefore, it would seem fair for Republicans to point out that the bipartisanship on the final health care vote as well as the bipartisanship on the first financial regulation bill was on the side of the “No” votes.  In both cases, there was at least one Democrat voting with all the Republicans, and not one Republican voting ‘’Aye".  The GOP should keep reminding the public of that fact; it’s a strong antidote to the charge of obstructionism.

Oh, one more really last thought:  I actually wrote most of this article before the Senate vote. For me to have that level of faith that not one Republican would jump ship says, in my view, a lot more about the positive turn the GOP has taken than it says about me.  It’s a great start – or rather a great continuation from the health care vote – for a party that has a hell of a lot to prove.