Yesterday, I mentioned my fears of a dangerous shift towards enshrining deregulation in law.
Today, I am wondering if the bank fellatrix (is that plural?) might take a subtler approach.
Recall that throughout the 1990s and 2000s, the SEC budget was essentially flat. (Attempts to raise their enforcement budget were beaten back). As far back as 1994, Phil Gramm was arguing that the SEC was making too expensive to raise money in the Stock and Bond markets.
Consider this statement from future House majority John A. Boehner of Ohio:
“When it comes to the financial services bill and the 358 regulatory filings required under that bill,” Mr. Boehner said, “it’s going to require a significant amount of oversight — so that not only will the Congress understand, but the American people will understand, just what this bill will do to our financial services industry.” The Republicans will also most likely seek changes to the Consumer Financial Protection Bureau, which they believe was given too much power.”
Thus, rather than try to outright repeal the milquetoast Finreg laws, we are gong to see a 1000 small pushbacks, clipped wings, challenges. We should expect the new “oversight” to include new hearings, new subpoenas, and general harassment of regulators by the House of Representatives.
This was what I was referring to in part in The Tragedy of the Obama Administration. A better leader, one who understood the crisis and responded vigorously to it during early 2009, could have preempted this sort of push back.
I expect this will not be pretty . . .
1994: SEC Budget Debate (August 15 1994)
Congress cuts S.E.C. budget (November 24th, 2003)
SEC: Defective by Design? (March 18th, 2010)
The Tragedy of the Obama Administration (November 2nd, 2010)