Last week the battle in the Senate over financial services reform took an unexpected twist. The GOP decided to let the Dodd bill pass through the banking committee without a fight and duke out the war on the Senate floor. This personally makes me uneasy because there is a lot to be desired from the Dodd bill. But what is really troubling is the attitude from the White House on reform. TNR reports:
The bill differs in certain respects from the version the House passed in Decemberâ??one difference is the New York Fed provision, which the House bill lacks. But, on Wednesday, Obama told Dodd and his House counterpart, Barney Frank, that he could more or less live with either version, according to an official knowledgeable about the meeting. (Though he stressed that heâ??d like to combine the toughest elements of both, as with an exemption from derivatives regulation for non-financial companies, which is stricter in Doddâ??s bill.) Mostly, he just encouraged them to press ahead, emphasizing the win-win dynamic at work. If Republicans dig in, the president argued, thatâ??s a fight heâ??d welcome. (Administration officials have seen polling suggesting the public will assume Republicans are carrying Wall Streetâ??s water, regardless of their arguments.) And if Republicans want to join in the effort to rein in Wall Streetâ??well, no one at the White House would turn down a big, bipartisan victory.
If this is to be believed, the White House is looking at this completely politically. For Obama, reform isn’t about actually figuring out what happened and then designing a regulatory framework in response. Just pass something. Just give the Democrats something to say they punched Wall Street in the face. Just give the GOP something to say they can be bipartisan. Never mind that the Dodd and Frank bills could dramatically impact the nation’s future economic prospects for the negative.
This is not the way to pursue Wall Street reform.