What does the future hold for regulating Wall Street?
Regardless of who wins today’s election, both Barack Obama and John McCain have staked out different positions on issues involving economic regulation – and each is very different than the outgoing president.
The Economists’ Voice looks at what we might expect in the post-Bush era:
While the presidential candidates have been diverted by critical issues ranging from Barack Obama’s taste in lettuce to John McCain’s condo, it’s hard to deny that, once elected, serious questions involving economic regulation—everything from housing finance to alternative energy mandates—will be front and center. And here, at least, the divisions are clear: Obama would use a heavy hand to push the economy back on track, while McCain would do his best to put the free back in free markets.
Or maybe not.
Ever since the New Deal, Democrats have largely accepted the label as the party of regulation—defenders of the weak from the vagaries of soulless capitalism. Republicans, for their part, position themselves as the nemeses of the social engineers and do-gooders who would sap the economy of vigor. But once in office, reality bites. Thus, with more than a little encouragement from Detroit, Ike committed the GOP to the biggest public works project in history— the Interstate Highway System. Richard Nixon imposed price controls to contain inflation, while Ronald Reagan protected the swooning steel industry from foreign competitors and the first President Bush championed market intervention in the name of cleaner air and accommodations for the disabled. The second Bush hasn’t stood on principle either, lavishing seniors with heavily subsidized prescription drugs and supporting bailouts for both investment bankers and the giant private mortgage insurers.
Democrats, of course, have been no better at sticking to their script. Carter deregulated airlines and trucking, while Clinton deregulated telecommunications and nuclear enrichment as well as opening the door to cheap Mexican imports.
Thus, while Obama and McCain may both lull true believers with the bromides of an earlier generation, a subtler mix of ideology and interest group muscle is bound to drive the regulatory agenda once elected. Consider just a few of the big choices ahead.
“Regulation after Bush”
Robert Hahn and Peter Passell
The Economists’ Voice: Vol. 5 : Iss. 4, Article 5. (2008)