Barney Frank is quoted in The Financial Times saying this today:
"The big banks didn’t win anything that they shouldn’t have won," said Mr Frank. "Anybody that is looking for a demonstration that when the public is engaged democracy works well . . . look at this bill."
What worries me is that Barney may actually believe this. Politicians, like all people, take on some of the views of the people they hang out with. And, as Chairman of the House Banking Committee in our structurally corrupt campaign finance system, Barney Frank hears from a lot of bank lobbyists. It is almost inevitable that Barney may develop some sympathies for some of the arguments of bank lobbyists.
Yes, the reform legislation is an improvement over what most were expecting a month or two ago. But the idea that the big banks didn't win anything they shouldn't have from a sound public policy perspective is ludicrous. Frankly, statements like this from a liberal icon give additional credence to the oligarchy claim of Senator Bernie Sanders.
Some obvious examples of desirable reforms left out of the legislation (none of which would have struck anyone as onerous as recently as two decades ago):
- No ban on naked credit default swaps
- Minimal controls over financial institution leverage
- No 10% limitation on the percentage of government insured deposits any bank can hold
- No proprietary trading restrictions as Paul Volcker proposed.
I support the reform legislation, but given what we have been through over the last two years, it is sad that this is best our Congress can do.