Like I’ve been predicting, it looks like the Senate’s proposed financial “reform” will be, in the words of the cranky old man in the Woodstock documentary, a shitty mess:
As Congress this week inches toward a new set of rules to avert another global financial collapse, it is focused on two conflicting goals: reforming the banking system to protect consumers while still giving lenders the freedom to take risks.
So far the score looks like: Bankers 1, Consumers 0.
More than a year after a wave of risky mortgage bets brought Wall Street to its knees, banks and other financial institutions are still playing by the same rules that got them into the mess.
The banking industry initially lobbied hard to make sure that any new consumer protections were housed within existing bank regulators, such as the Office of the Controller of the Currency or the FDIC.
Analysts who have followed the turf war say the latest proposal gives bankers most of what they wanted.
“This is a bill the industry will love,” said Greg Valliere, chief policy strategist for Soleil Securities.
Wonderful! Hope and change are in the air, baby!
So, look. At this point I’d rather financial reform not pass. Because if the Senate passes a bill that “the industry will love,” then it means we’re heading for another crash no matter what we do. And I’d much rather have the post-crash narrative be, “The government didn’t do enough to rein in the banks” and not “It’s the government’s pesky regulations that caused the banks to fail!”
Just to point out, dudes, I’m not really hoping for another economic collapse. I’m saying that it’s coming no matter what and we’ve gotta position ourselves to win the narrative battle when it comes.