So the horse trading over Dodd’s financial-reform bill’s begun in earnest, and we have to wonder what will be left of the reforms by the time the lobbyists, special interests, bankers, conservatives, liberals, assorted Tea-Party sympathizers and the random community organizer are done reforming it.
A pair of stories on A2 in the Journal illustrate this. Fed Chairman Ben Bernanke is going up to Capitol Hill today to argue that the Fed shouldn’t have its oversight powers stripped away.
Under the proposed bill, the Fed would lose its oversight of smaller banks. The Fed apparently isn’t exactly in a giving mood, and doesn’t want to give up any of its current responsibilities.
The Fed chairman will argue that having its feelers in the community banks allows it to get a better picture of conditions out there, which in turn allows it to maintain a better monetary policy. Expect turf battles like this to attend the entire process.
But, to our eyes, recent history doesn’t exactly back up the Fed’s case, because it doesn’t seem like their ability to look into the smallest cracks in the banking system helped them to do anything more effectively, but whatever. He’s the Fed chairman, and he gets his say.
Then there’s this little bit about proxy votes and nominating directors that somehow got slipped into the bill. Listen, it’s a good issue. Corporate boards in far too many cases have become little more than rubber stamps for the executives, rather than the voice of the shareholders that they’re supposed to be. Any moves to bolster the selection process is a good move. But is it really needed in a financial reform bill?
You wonder if Dodd slipped this one in there expecting it to raise objections. He can then strip it out, and say, hey, look, I gave you something, now what are you gonna give me? Maybe that’s too Machiavellian to expect of Chris Dodd. After all, he really got swindled on that Irish cottage.