Free Markets, Free People

financial regulation

Is Financial Regulation imperiled with Byrd’s death?

In a word, ‘yes’.  Byrd was a yea vote.  And Senator Russ Feingold has just announced he’s a nay vote.  It also appears Sen. Scott Brown is heading toward the nay side of things.  And Sen. Maria Cantwell, a Democrat, has been against the bill for some time.

This has all left Kevin Drum unamused:

But seriously: WTF? This is the final report of a conference committee. There’s no more negotiation. It’s an up-or-down vote and there isn’t going to be a second chance at this. You either vote for this bill, which has plenty of good provisions even if doesn’t break up all the big banks, or else you vote for the status quo. That’s it. That’s the choice. It’s not a game. It’s not a time for Feingold to worry about his reputation for independence. It’s a time to make a decision between actively supporting something good and actively supporting something bad. And Feingold has decided to actively support something bad.

What’s more, his reasons for doing this don’t even make sense. This bill won’t prevent another crisis? No it won’t, but voting for the status quo does even less. It doesn’t break up the big banks? The status quo does even less. It suffers from too much lobbyist influence? Well, Wall Street lobbyists are far more enthusiastic about the status quo than they are about this bill. There are only two choices available here, and on virtually every level Feingold is voting in favor of the alternative that does less of what he says he wants.

The old “principle vs. pragmatism” argument.  When Feingold does this when a GOP bill is on the floor, it’s principle.  But when something left is wanting is imperiled by Feingold’s principled stand (whether you agree with his principles or not), they argue for pragmatism, the old “something is better than nothing” bit.

Well, most of the time something isn’t better than nothing.  That’s one of the reasons we’re in the legal hell we suffer under now.  Because bad law has been championed – by both sides – as something which is better than nothing.  Me?  I’ve always been in favor of the “get it right the first time or don’t do it” argument.

That’s not to say I’m in favor of this bill or any of the other attempts to regulate the financial end of things (I’d much rather see the government get its house in order first – probably an impossible task).  But it is instructive to watch the legislative sausage making process proceed and to understand that within that process, “principle” is more of an excuse than a guiding light.