Another day, another strange column about regulatory reform from the Post's Steve Pearlstein:
Dodd 2.0, by contrast, reads like the chairman and his Senate colleagues couldn't make up their minds about who or what caused the financial crisis or who could be trusted to fix the system.
This one isn't wrong about the policy so much as the politics -- Pearlstein argues that Chris Dodd's second effort at regulatory reform isn't as good as his first. And in the main, he's right that the bill is messy.
But he never asks why the bill "reads like" it does -- he just points out all of the "political accommodations." Political accommodations, however, are accommodating someone, and those someones are the conservatives on the Senate Banking committee. Pearlstein argues that Dodd should start over, but Dodd already did -- he released his first, and stronger, bill in November to a resounding chorus of opposition from Republicans and the financial sector, and quieter grumbling from moderate Democrats. Dodd entered into several months of bipartisan negotiations to get the bill to the state it's currently in, and though none of the GOPers signed on, he is still hoping to bring Republicans on board.
Writing this column, Pearlstein does his readers a very basic journalistic disservice: He tells them what but not why or who. This bill is convoluted because many members of Congress simply don't support real regulatory reform or don't wish to fight turf battles with regulators -- starting right at the top with Republican Leader Mitch McConnell. Acting like the compromises in this bill came about because Dodd or anyone else thinks they make policy sense just forgets the basic facts of the U.S. Senate. As Dodd told reporters the other day, "You guys know the problem was in terms of votes."
If Pearlstein thinks that Dodd should try to rally Democrats around his original bill and take a partisan reform bill to the floor, he should say so. But airily complaining that bipartisan negotiations between one side that favors moderate reform and another that favors as little as possible produced a convoluted bill? Well, I know, it's shocking.
-- Tim Fernholz
