Questions to Ask as Obama Unveils Financial Regulatory Overhaul Plan « The Washington Independent
Here’s something to keep in mind as President Obama unveils his financial regulatory overhaul plan today. Baseline Scenario helpfully offers a list of questions that the administration will either address or avoid as it rolls out its proposals. How Obama frames the debate will play a big part in how successfully the plan goes forward, as Baseline Scenario points out, so it’s worth looking for issues that the administration will tackle — or not — as it makes its pitch.
Can the President bring himself to state in public the obvious: The extent of political influence in the hands of our financial system – large banks in particular, but small banks also in some instances – is out of control and dangerous? Where is the administration’s reform agenda on this crucial point? To those of us who frequent Capitol Hill, it looks very much like business as usual, albeit with higher political market share for the big banks that remain in business.
That’s an excellent point. As TWI noted, Congress has already stalled on overhauling mortgage lending, despite the predatory practices that led to the crisis. What assurances do we have that Obama’s agenda has a chance of passage, without being totally watered down?
Does he state plainly and unequivocally that the way the financial system has been run – and continues to be run – has damaged the national interest of the United States and pushed millions of people, both here and around the world, closer to poverty?
That’s a point few in Congress or the administration have addressed — the global effect of the U.S. meltdown. I doubt they’ll pick up on it at this point, however. The global poverty argument often doesn’t play all that well at home. People are more wrapped up in their own financial crises. Still, it’s worth thinking about, if only to understand the reach of this crisis and the need for reform.
And finally, there’s this concern, which I just raised:
Most important, does the President stress the need to protect consumers from the financial industry going forward, specifically with a strong Financial Products Safety Commission. Messrs. Geithner and Summers seem, at best, lukewarm to this idea – in fact, we have no clear indication that they buy into the idea of consumer protection at all. The President’s position on this issue will be decisive.
It’s not just making the announcement of the overhaul that’s important — it’s how, exactly, the announcement is made. Look to see whether Obama addresses these kinds of concerns, to decide how serious the administration will be about regulatory reform.