Secretary of Audit Dean Starkman has often criticized the press for its lackluster coverage of regulation, while acknowledging that it’s gotten somewhat better since the crisis.
Still, there’s a lot that I, for one, didn’t know until reading John B. Judis’s provocative piece in The New Republic headlined “The Quiet Revolution.” It’s nice to see a step-back look at the administration’s efforts, which Judis in some ways convincingly characterizes as a serious transforming of the “fourth branch of government,” as he calls regulators.
But there’s a weak spot with the argument, and it’s a big one: What about financial regulation? Judis gives that short shrift, dropping one “to be sure” paragraph near the bottom:
Of course, there have been shortcomings in Obama’s approach. Some of his appointments have been less than stellar. Mary Schapiro, selected to head the SEC, was formerly CEO of the Financial Industry Regulatory Authority, which was set up and funded by the investment industry–and she appears at least initially reluctant to challenge the Wall Street culture. After boldly proposing last May to conduct 10,000 unannounced inspections of money managers, she eventually settled in December for only 1,600 inspections.
Right as far as Schapiro goes. But what about Tim Geithner? He hasn’t exactly been known to “challenge the Wall Street culture”—unless you consider it challenging to count all the money he’s helped them make. Or what about Ben Bernanke, re-nominated by Obama to lead the Fed for another four years? Is he anyone’s idea of a tough regulator? This is a serious question, especially as Congress debates whether to beef up the Fed’s consumer-protection responsibilities.
Have Obama’s financial-regulatory stances been appreciably weaker than those in other areas? If so, how—and why?
