Republicans Attack Financial Reform

Is anyone surprised by this?

Republicans Attack Financial Reform, by Jonathan Chait: Republicans look to start rolling back financial reform:

Republicans clearly want to strike at the heart of banking reform with legislation attacking new regulations on derivatives, credit rating agencies and private equity firms. But their piecemeal approach suggests they are trying to do so without appearing to favor Wall Street over Main Street. …

In a two-pronged approach that began with starving funds from relevant federal agencies like the Treasury, Securities and Exchange Commission, and Commodity Future Trading Commission, the GOP now has launched into the symbolic phase of floating repeal legislation favored by the banking lobby. …

…Opponents of the bill are operating in an environment where almost nobody other than the financial industry is paying attention. That’s an environment where it’s easy to, at the least, starve financial reform to death. But if President Obama raises the profile of the issue, the politics will quickly flip. It’s a political and a policy no-brainer. I don’t understand why he hasn’t done so already.

If Obama says unkind things about financial executives on Waaaaah Street, they get their feelings hurt — it’s easy to imagine tears rolling down their cheeks. Can’t have that.

I’d guess Obama believes he is making progress on the charge that he demonizes business. He’s certainly been trying. If he targets the financial sector with tough talk about regulation, he will reopen the charges that his administration is unfriendly to business and, in his and his advisors mind, hurt his chances of reelection.

But whatever progress he thinks he has made with the business community is illusory. The first time that he proposes something against business interests none of this will matter, they will come out once again with full guns against him. They are not an ally, and their interests will always come first. I was disappointed that Obama gave into this in the first place and began courting opponents such as the Chamber of Commerce, and if it’s true that fear of upsetting the financial/business community is causing hesitation to fight back against attempts to undercut regulation, the disappointment is magnified.

About Mark Thoma 243 Articles

Affiliation: University of Oregon

Mark Thoma is a member of the Economics Department at the University of Oregon. He joined the UO faculty in 1987 and served as head of the Economics Department for five years. His research examines the effects that changes in monetary policy have on inflation, output, unemployment, interest rates and other macroeconomic variables with a focus on asymmetries in the response of these variables to policy changes, and on changes in the relationship between policy and the economy over time. He has also conducted research in other areas such as the relationship between the political party in power, and macroeconomic outcomes and using macroeconomic tools to predict transportation flows. He received his doctorate from Washington State University.

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