As I’ve said before, I’m almost ecstatically happy over the Wall Street Reform Bill. I’m puzzled why I’m so lonely in my excitement. My guess is that it’s a combination of a few things.
- Financial stuff is boring and complicated. Even if people are paying attention, there are too many numbers for many people to feel comfortable. WALL STREET = BAD = WHERE’S MY BAILOUT? is a lot easier to comprehend than the intricacies of reserve requirements and what portion of exotic mortgage products must be kept on a bank’s books.
- There’s a lot of noise. Since people don’t have a good grip on what’s good and bad in the bill, they hear one person say it’s good, another say it’s bad, and determine that it must be somewhere in the middle. We didn’t get everything we wanted so we must have gotten nothing.
- There are still some details missing. Or, rather, some details will be put out as regulations rather than legislation. And we’ve seen a lot of stories about how the banks are gearing up their lobbyists to make sure the regulations that come out under the bill come out in their favor. Since people recognize that lobbyists are powerful, they assume that any protections will probably be lobbied away.
The problem with the last assumption is that banks aren’t the only group with influencial lobbyists that lobbies regulatory agencies. We have a fairly potent consumer lobby. Dollar for dollar they’re outmatched—but the consumer lobbyists have a much easier job than the financial lobbyists. They simply need to point out where the consumers are getting screwed. The bank’s lobbyists will try to explain why screwing consumers is somehow a good thing. That’s a tough sell.
And the people the bank will be lobbying at the Consumer Financial Protection Bureau are not simply a group of people trying to cozy up to the industry to get higher paying jobs in two years. They’re going to be, in large part, people who have made a career out of financial protection. In all probability, the banks will be trying to convince Elizabeth Warren that they aren’t doing anything wrong.