Ezra Klein on "the underrated FinReg bill"

[ProSense]

FinReg vs. Wall Street reform

Matt Yglesias calls it "the underrated FinReg bill," and I take that headline as a personal victory of sorts. But is he right? Is it really underrated?

As a financial regulation bill, I think it is. "We’ve tended to focus much more on what’s not in the bill than on what is in the bill," Yglesias says. "What is in the bill is a consumer protection setup that would be considered a major progressive win as a standalone item. What is in the bill is a 'resolution authority' that will let future regulators avoid the bailout-or-crisis dynamic that plagued us in 2008. What is in the bill are regulatory tools that even Simon Johnson likes. The bill clarifies lines of regulatory authority and responsibility and should cut down on abusive 'competitive regulation.' "

I'd add a few more major wins. Bringing derivatives onto exchanges and into clearinghouses is a huge victory. In 2007, the over-the-counter -- and almost entirely unregulated -- derivatives market was worth about $700 trillion in notional value, and regulators had no idea what went where and few firms had serious capital or margin requirements Those days are now over. You often hear activists say that politicians should begin with some hard-line demand and compromise down to what they actually want. That actually happened here, as Blanche Lincoln's proposal to separate derivatives desks from larger institutions attracted all the fury and left the more important reforms to quietly pass into law.

The bill will also force much more transparency from financial firms and provide regulators with reams and reams of information on the financial markets. In fact, it develops the Office of Financial Research to serve precisely that purpose. The presence of information won't stop regulators who decide to explain away what the data is telling them, and history provides plenty of sobering examples. But if the sudden clarity of the picture helps regulators see and stop even one bubble, that's a major victory, albeit not one that we'll ever really know about.

The Consumer Financial Protection Bureau got mentioned, but it's a huge deal, with the potential to become as important to consumers as the Food and Drug Administration is today. As far as structural reforms go, this one, which creates a whole new structure where one didn't really exist before, is the most impressive: We couldn't have had the subprime bubble in the absence of a massive flow of subprime mortgages sold to people who didn't understand them and couldn't afford them. The CFPB would've been in a position to intercede, and though we'll never know whether it would've succeeded -- extending housing credit to working families was a bipartisan priority -- the presence of a regulator with responsibility for the consumer market makes success a lot likelier.

more

[DCBob]

1. Oh dear, Ezra will now be on "ignore" for many DU'ers..

Kudos to Ezra for coming clean and admitting there are some good "progressive" things in the bill.

[Oregone]

4. How many people have stated that there are none?

[DCBob]

5. Not only have they said there are none.. they have said this bill is worse than doing nothing.

I dont have an accurate count but seems like quite a few.

[Oregone]

6. You should write a dissertation on it and round up all the posts

It would be great reading, and its obvious this issue concerns you. Until then, you may be arguing with a straw man as far as Im concerned.

This could only be considered "worse" if it avoids addressing an issue by creating a distraction, that leads to another serious financial crisis. I don't have a crystal ball to determine that, but it would be far off, and I have no proof that appropriate legislation would still exist at that time anyway in the midst of a capitalistic system.

[DCBob]

7. No need for a "dissertation".. just read posts on this board for the past few weeks..

it's not difficult to figure out.

[TheKentuckian]

2. New furniture, a couple of nice appliances, new carpet

all put into a house on fire.

Resolution authority is bullshit, either the big six or so will be bailed out via the back door or they are absorbed by "healthier" institutions and we move closer to corporate monopoly.

There is some good stuff in this bill but it is not going to prevent another 2008 or worse level event.

As usual the celebration wouldn't be so offensive if the attitude was of a hard fought win of a battle rather than victory in the war.
If "pragmatic" Democrats were dedicated and focused on continuing to make progress rather than rolling out the mission accomplished banners and silencing dissent about how much more is critical to get done then I strongly suspect their would be a markedly different tone and much greater unity here.

There are many supposed incrementalists that have no intent of pushing for those next steps because they instead immediately turn to attempting to silence concerns and pretending away and defending flaws and poo poohing calls to run the next leg in the race.

[Spazito]

8. Yeah! Down with the "pragmatists" and the "incrementalists"...

All hail the "if not perfect then status quo" experts!



:eyes:


Edited to correct grammatical error

[TheKentuckian]

9. The claims of a demand for perfection indicate intellectual dishonesty on a near Republican like

level.

The gulf between acceptable and perfect is far greater than the divide between acceptable and "getting something" done.

Perhaps their is something different dynamic in effect, maybe the real chasm is between endgames.

Maybe some folks think Heaven on Earth wasn't too far from the pre-shrub world while others see a much larger can of worms that at best made the salad days of the late 90's at best purgatory?

[Spazito]

10. The presumption that only your perspective on what is "acceptable"...

is acceptable displays an arrogance to the nth degree. If there is any intellectual dishonesty to be found it is in the deliberate refusal to acknowledge the reforms, while not "perfect" are a definite improvement from the status quo.


LOL on your "near republican like level" comment, I can only advise against posting that which can be seen as "projecting".

[TheKentuckian]

11. I don't pretend that people are demanding perfection as a reflexive defense

against criticism of weak policy.

Stop using the lazy bail out of a meme and you'll have less ground to defend.

It is a personal judgment of what is acceptable and it is a personal attack to paint that line as someone else's nirvana and then paint them as unbending perfectionists and extremist babies.

Maybe their is a gap in goals here that needs to be discussed honestly rather than pretending not liking what is served isn't good enough because it is not immaculate or whatever the spin is.

[Spazito]

12. What you find acceptable and what I find acceptable are BOTH

personal judgments, equal in their status, and my criticism was directed at your post and the perspective and projection within it neither of which can be classified as a personal attack. I see a challenge to your perspective is uncomfortable for you but, given this is a public forum where everyone has an equal say, challenges should be expected, imo.

Stating something is not acceptable and assuming that should be accepted without challenge could be considered, to say the least, rather naive.

I hope, upon further research, you will see the legislation is, indeed, much better than the status quo. If not, oh well.

[TheKentuckian]

13. No, my problem is about the declaration of perfection applied to anyone

who says legislation isn't good enough to address structural problems and may make more substantive reform more difficult.

You are utterly incapable of making me uncomfortable with myself or my perspectives.

[HughMoran]

18. It can't be done

Nobody can force another to have a reasonably fair perspective.

[treestar]

25. It is difficult to avoid the "perfectionist" label

when nothing is ever "good enough."

[HughMoran]

17. I've yet to see anything good enough for you

:shrug:

[HughMoran]

16. More garbage

SSDD

I'm tired of it.

[Radical Activist]

3. It's nice to see something more serious than cynical slogans.

[Moochy]

14. HOORAY

[ProSense]

15. Yup,

hooray.

[Moochy]

20. Glad you finally got some people to read your prechewed post

[firedupdem]

19. K&R

Thank you for always bringing 'facts' to the discussion here. I appreciate it.

:yourock:

[Milo_Bloom]

21. It is the best we can expect right now.

There are a million loopholes and the big guys aren't going to be impacted that much... ultimately it is like putting a band-aid on a compound fracture, but given the way this administration and the dems have caved in other pieces of legislation, they had no way to push a real agenda through.

[Spazito]

22. Of course, the real agenda being?

Please iterate, for my edification, what the "real agenda" is, how it should go forward, the steps needed to take it from an idea to the passage of legislation and implementation. That iteration would be ever so helpful to understanding your perspective.

[Milo_Bloom]

23. It would help ever so much if you were able to read properly.

"A REAL AGENDA".

"A REAL AGENDA" wouldn't have the loopholes pointed out in Matt Taibbi's article. (http://www.rollingstone.com/politics/news/17390/96712?RS_show_page=0)

"A REAL AGENDA" wouldn't have allowed "too big to fail" to survive.

"A REAL AGENDA" wouldn't have exempted auto companies from consumer protections.

However, since this administration has, from day one, shown its absolute willingness to blink at the slightest provocation and back off what is right for what is politically expedient, there was no real opportunity to get "A REAL AGENDA" through, so we have to settle for the crumbs.

[Spazito]

26. Providing a link does not, in any way, address my questions posed in my post...

I did, however, read the link and it, too, does not, in any way, address the question of "the real agenda" in any substantive, practicable, step by step manner.

It seems when questions are posed that ask for a substantive process in which to address the identified problem/s, the response is more empty rhetoric citing the "problem" as if citing the problem IS the solution.

[Milo_Bloom]

27. Oh dear god.. are you joking?

First, you fail to address you complete misunderstanding of what is meant by the word agenda.

Then you fail to following the step by step manner that was laid out for you and the speicic holes in the legislation that need to be addressed and why they have not been.

[Spazito]

28. No, not joking at all...

It is not the notation of the "holes in the legislation" as put forward by various parties, it is the glaring lack of attempt to specify a practicable, step-by-step process by which those "holes" can be filled.

Identifying the "holes" does nothing when those identifying the holes can't provide any tools by which the holes can be filled.

It is the lack of any appearance of a "shovel" that I am pointing out.

Edited to add: The "real agenda" is, indeed, being carried out, that being reforming health care, reforming the financial industry, regulating the mining and energy industries. The "real agenda" as defined by those who refer to the "real agenda" as a means of criticism is an agenda based, not on reality, but on pie in the sky what ifs.

[Milo_Bloom]

29. Well... we could try not punching the holes in it in the first place.

You see, the problem here began, as stated very clearly in the post you obviously didn't read, in this administration's ability to flinch everytime the slightest opposition popped up.

Now, we have a house of cards built on a flimsy foundation, filled with thousands of holes (aka, loopholes).

Yes, an agenda is being carried out, just not the one we were sold during the campaign and certainly not one worth all that much. We are now stuck in the world of "well, it's better than nothing, I guess", which is actually a debateable point.

How to fix it... Well, we start with a time machine and go back to February 2009 and convince the administration to stand strong on items they aren't going to get republican votes on ANYWAY, thereby signaling to them that they will not bend over backwards to capitulate to republican whims. Suggest that they use the power of the office EARLY and OFTEN playing on the support of the public to not completely water down items like the credit card act so as to make them basically useless and have them actually MEAN SOMETHING to real consumers. This is called getting the public on your side by doing a good job.

This is why my original message was that this was the best we can expect from this administation... yet another in a long line of weak as water legislation that does little to address any real problems, but was the politically expedient thing to do. YAY!

[Spazito]

30. Well...

"How to fix it... Well, we start with a time machine and go back to February 2009 and convince the administration to stand strong on items they aren't going to get republican votes on ANYWAY, thereby signaling to them that they will not bend over backward to capitulate to republican whims. Suggest that they use the power of the office EARLY and OFTEN playing on the support of the public to not completely water down items like the credit card act so as to make them basically useless and have them actually MEAN SOMETHING to real consumers. This is called getting the public on your side by doing a good job."

Hmmm, given time machines are fantasy, your whole premise after that is.....damn....dare I say, a fantasy and the antithesis of any practicable process to remedy what has been determined, by some, to be the CURRENT problem.

There is nothing, I repeat nothing, in your post that comes close to a process, nevermind a substantive process, to actually fix the "problems" as identified.

Identifying problems does NOT equate to addressing problems/ fixing problems, a concept that some seem to find difficult to comprehend.

It's like everyone standing around a vehicle with a flat tire, identifying the problem as being a flat tire then, instead of actually fixing the flat tire, think that stating the manufacturer is at fault for the flat tire, the highways department is at fault for not ensuring the roadway was clear of debris, etc, is all that is needed while, in the meantime, the tire remains unfixed.

[Milo_Bloom]

31. So, i take it you didn't understand the premise in the first place?

Which is the problem.

My presmise, that somehow you have still failed to read or maybe understand, is that this fairly worthless piece of legislation is the best we can expect. This is it. It's your personal Mission Accomplished moment.

There is no "solution" becuase a majority of our representatives have already resigned themselves to doing what is politically expedient over finding good solutions to problems.

Any real solution involves either going back in time and working harder to convince the administration and our democratic leaders to actually BE STRONG and/or in the next election not voting for them thereby allowing the GOP to take control once again, drive the country even further into a ditch so people will actually do something useful next time, instead of passing fairly worthless legislation and claiming "victory".

[Spazito]

32. I see we are at standstill...

your posts indicate you see identifying problems equating to addressing problems and cannot or will not see they do not equate at all. Referring to "going back in time" or "time machines" as if they are real and are part of any solution, as you have done in your latest post as well as others, indicates it is futile to debate on the issue of practicable solutions.

Good luck with that "time machine", I am looking forward to it's debut!

[Milo_Bloom]

33. Nice strawman you attempted to construct.

I haven't offered any PRACTICABLE SOLUTIONS because there are none and THAT is the biggest problem and what is frustrating you the most. You know this, but want to try and hide it by claiming you are trying to debate "practicable" solutions when my entire premise is that none exists because the tools are faulty. Yet, you keep pretending not to understand this.

It's a crappy piece of legislation that doesn't fulfil the promises it purports to. The people in charge know this, but are trying to sell it anyway because they need a "victory" before an election.

[vaberella]

24. K and R for good stuff. n/t

[Name removed]

34. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Catshrink]

35. To boldly link where no one has linked before.

[ProSense]

36. Are you two attached? n/t

[firedupdem]

37. LOL!

:rofl: