Conventional pundit wisdom suggests that Wall Street may have overreached last week. Yes, they successfully managed to repeal the swaps pushout provision in Dodd-Frank, but in so doing they unleashed Elizabeth Warren and brought far more attention to their shenanigans than they bargained for. They may have won a battle, but with the public now suitably outraged and alert for further mischief, they’re unlikely to keep future efforts to weaken financial reform behind the scenes, where they might have a chance to pass with nobody the wiser.
Then again, maybe not. Maybe it was all just political theater and Wall Street lobbyists know better than to take it seriously. Ed Kilgore points to this article in The Hill today:
Banks and financial institutions are planning an aggressive push to dismantle parts of the Wall Street reform law when Republicans take control of Congress in January.
Fresh off a victory in the government funding debate that liberals decried as a giveaway to Wall Street, advocates for the financial sector aim to pursue additional changes to Dodd-Frank that they say would lighten burdens created by the 2010 law. Among the top items on the wish list: easing new requirements on mortgages, loosening restrictions on financial derivatives and overhauling the Consumer Financial Protection Bureau….Another fight on the horizon is the push for “regulatory relief,” as financial institutions and Republicans seek to require agencies to pursue more cost-benefit analysis when writing rules.
….In the face of loud opposition, financial lobbyists say they have a compelling case for revisiting the law. While the economy is improving, they argue the new rules have made it exceedingly difficult to obtain loans, including mortgages.
Will Democrats in the Senate manage to stick together and filibuster these efforts to weaken Dodd-Frank? Or will enough centrists peel off to allow a few of them to pass? I’d like to think that Elizabeth Warren has made unity more likely, but then again, I have an uneasy feeling that Wall Street lobbyists might have a better read on things than she does. Dodd-Frank has already been weakened substantially in the rulemaking process, and this could easily represent a further death by a thousand cuts. After all, as the Wall Street flacks say, the economy is improving. And who needs a bunch of fussy rules when the economy is good?