The Republican attack on the economy appears to be failing.
The JP Morgan Chase trading loss of $2 billion changed everything.

The banks and the Republicans are now clearly to blame if the economy and the stock market decline.

You know, I've been thinking about the stock correction in progress. The terms of trade reversed recently. Up until now, the Republican Congress was set to reap its investment in misery. Over the past few years Congress has repeatedly blocked Obama's requests for additional stimulus investments.

As planned, it looks like the economy is starting to sputter and turn nose down into an double dip recession. The slow pace of job growth and the current wobble were engineered by the Republicans so they could regain the White House. They wanted American to stay unemployed, underemployed, evicted and hopeless so they could hang Obama with it. And it may have been working.

The change came with the revelation that JP Morgan lost $2 billion in stock market speculation. JP Morgan has now lost 20% of its market valuation since March. This revelation puts the Obama administration in the driver's seat in terms of financial regulation.

More importantly, this catastrophe puts the financial industry front and center just as the economy and the market appeared headed for another downturn. Republican strategists were aiming for this precise outcome when they met more than three years ago to plan their resistance to Obama's stewardship of the economy.

Now, if there is a crash, the blame will hang squarely on the banks and their Republican protectors. The traders have been betting against the market for months now, piling up leveraged bets on a stock market plunge. Yet if the market plunges, the world will know it is the fault of the banks and the Republicans.

The resulting economic disaster would provide the foundation for a meaningful reform of the financial services industry that will muzzle the industry for a generation. The only way out is for the banks to reverse course. Now that the banks are the ones holding the bag, they will need to throw their immense resources into averting the disaster that they have orchestrated. For their part, Republicans will either have to cough up some stimulus money before the election or face the voters empty-handed.

I am going to go pop some popcorn. This is going to be fun to watch.
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