All the GOP candidates have come out [NYT] against the Dodd-Frank Act:
Most of the regulations included in the law fall on the big banks that were at the center of the financial crisis — Bank of America, Citigroup, Wells Fargo and JPMorgan Chase. Those names rarely pass the candidates’ lips, however, as Republicans have turned Dodd-Frank into a piñata. Instead, they invoke community bankers — the small-town lenders who are more likely to be seen coaching a Little League team than wearing a pinstripe suit — as the beleaguered victims of overregulation.
I'm a little aghast. Very few people who observed the financial meltdown can possibly believe that the financial industry can be effectively self-regulating. What on earth would it take to pound that point across than the current recession, which emerged from the financial crisis? And yet the GOP's religious doctrines have to be obeyed – even if they have just been spectacularly disproved. Steam pours out of Matthew Boudway's ears:
Some of the candidates — call them the honorable fantasists — have been steadfastly opposed to bailouts: if the bankers run aground again, let them all drown; that’s capitalism. This position is honorable because it’s consistent. It’s fantasy because it fails to acknowledge a basic fact about modern economies like ours: what economists call “externalities.” … When the whole financial industry screws up, everyone suffers.
Innocence offers no protection when microeconomic imperatives cause a macroeconomic meltdown. This is why it makes sense for an institution designed to protect everyone’s interests — namely, the federal government — to force Wall Street to account for Main Street externalities, and that means more rigorous regulation. What about the Republican candidates who aren’t fantasists? Well, they’re also not honorable. The Mitt Romneys of the world want to have it both ways: minimal regulation but also maximal insurance for financiers, to be paid for by taxpayers.
Stephen Grenville concurs:
The financial sector does not yet accept that what went wrong in 2008 reflected fundamental faults. The veterans of 2008 see their survival as vindication and proof of their resilience. They criticise the reforms, one-by-one in isolation, arguing that none of the individual problems can explain all that went wrong. They ignore the wider reality that if government had not assisted large banks such as Citi and Bank of America, interconnectedness and contagion would have brought others down.