So, now that the big, noisy fight over healthcare is over, sort of, we can finally move on to focusing fully on financial reform, and not a minute too soon, either.
This Senate plan of Chris Dodd’s moved past the committee yesterday. Republicans, led by John Boehner and his punk-staffer fighters, are still bitterly griping, and the Treasury Secretary is trying to sound a rather populist note, “Listen less to those whose judgments brought us this crisis,” he said.
But we wonder if anybody in Washington has really learned any valuable lessons from our little object lesson in financial Armageddon.
For all the talk of a consumer finance protection agency and a oversight council, can we just have some rules? You know, rules, like the ones that keep the financial industry on an even keel for like 70 years or so.
The Dodd bill focuses more on councils than on rules. That’s a mistake. These bankers are clever folks; it took them decades to get around the Roosevelt-era laws, but they eventually did it. It will take them far less time to navigate around some agency or council tasked (and likely underfunded and understaffed) with watching them. Rules, while they can be and obviously have been evaded — we’re talking to you, Lehman Brothers — are still harder to get around.
It’s nice, this idea of some regulators to keep an eye on the shop, so to speak. But regulators have a horrible habit of falling asleep just as the regulated are getting frisky. What I’d much to prefer to see are concrete rules. You wouldn’t need agencies and councils if you had hard laws that governed banks’ behavior.