Monday, June 6, 2011


A couple of articles to update us on financial regulation—first, Geithner declares “no race to the bottom” on the rules; second, there’s the more worrying notion that the financial rules are being distorted and delayed by lobbying:
So far, 28 of the financial overhaul rule-making deadlines have been missed, according to Davis Polk, a law firm that is tracking the rules. Of the 385 new rules to be written, the law firm says, regulators have completed only 24 requirements; they were supposed to have taken 41 such actions by now.

“There’s an attempt to kill this through delay,” said Michael Greenberger, a law professor at the University of Maryland and a former official at the Commodity Futures Trading Commission, which is in charge of writing batches of the rules. “The difference between eight or nine months and 24 months could be cataclysmic here.”

Later in the article we’re treated to the spectacle of lawyers arguing it will take two years to rewrite all of their derivatives contracts, which sounds goofy but I’m sure is simply a tactic to extend the old lawless state for as long as possible so the looting can continue.

This should in no way be surprising: we’ve been seeing the same process unfold for health care. But it’s disturbing in more ways than one: it was a slog to get the laws written in the first place, and the hope was that progressives could get some momentum from that. That presumption might undermine future success, in actuality. Anti-government people might neuter the laws and the rule-making process and then use that success as an argument that regulation can never get the job done, as backwards as that seems. That’s not to mention the missed gains from failing to get the job done, particularly in health care.

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