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There was a good discussion in Kay’s post yesterday, and reader S sent me this thread from Twitter that I thought was pretty good and a bit about Kay’s topic yesterday. It’s by Amanda Fischer, who’s a former aide in the House and Senate and who was chief of staff at the SEC. I’ll just cut/paste it below:
Re Abundance discourse: I work on financial policy not infrastructure or industrial policy but to my mind these “endless studies w/out action” were the provenance of corporate friendly Dems that recognized economic problems but didn’t have courage to tackle them head-on
Take Dodd-Frank: we knew we needed a uniform fiduciary standard for providing retail investment advice but it got whittled down to a redundant “study” of a problem that was already well-known.
Same with mandatory arbitration: instead of just ordering the CFPB to ban or limit it, Dodd-Frank mandated a ponderous study that slowed down the final rule and led to it eventually being CRA’d
Credit rating agencies: lots of well-known problems and financial crisis reports about it, but yet again: Dodd-Frank ordered a study and then nothing substantial really happened
Too Big to Fail studies and foreign exchange swaps studies and on and on. All tactics to avoid addressing problems or taking accountability for actual decisions. The study as the head-fake is a common tactic.
I know Abundance is about like a homeowners association in Berkeley stopping housing construction or whatever & I probably agree with them, but it is just so disconnected from the framework I encountered in a decade of economic policymaking on the Hill.
And @ChopraUSA famously called the Dodd-Frank systemic risk regulator "book report club" because it did so many studies of issues without acting
The general point I’d like to make here isn’t about abundance. Rather, the issue is legislative failure. In the case of Dodd-Frank, the failure is the book report club rather than re-regulation. The moment was there, the Democrats had power, and we failed. We failed to produce meaningful reform. We failed to punish those who caused the 2008 financial crisis. We talked some big talk and followed it up by little action. We were so happy about Obama’s win and so hopeful about Obamacare that we didn’t notice that the bill that was supposed to “fix” the problems that caused the Great Recession didn’t really get the job done.
Too clever by half, like most of the legislation that Democrats produce, Obamacare included. Big issues were kicked down the road for a fix later, a fix that will never happen.
As we’ve seen, Republicans generally have no interest in legislation that does anything but dismantle government. We’re the “responsible” party. We’re supposed to do something. In 2009, the public would have accepted a bill that mandated stringing up Wall Street criminals up by their heels and parading them through every large city in the US. There’s absolutely no argument to be made that the public would have resisted a financial reform bill that went way, way farther than Dodd-Frank — they would have welcomed it. Instead, they got a womp, womp sad trombone of a bill. Voters aren’t stupid. They waited for something, and nothing arrived.
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