Financial reform is on its deathbed. So says Paul Krugman.
So here’s the situation. We’ve been through the second-worst financial crisis in the history of the world, and we’ve barely begun to recover: 29 million Americans either can’t find jobs or can’t find full-time work. Yet all momentum for serious banking reform has been lost. The question now seems to be whether we’ll get a watered-down bill or no bill at all. And I hate to say this, but the second option is starting to look preferable.
And so says the Times’ news division, too.
Details of part of his plan became public in news reports on Friday. The most hotly disputed elements — the creation of a consumer protection agency to watch for deceptive and abusive terms on mortgages, credit cards, payday loans and other financial products — are a reminder of how intense lobbying and partisan gridlock threaten to significantly weaken what the Obama administration has called a top priority.
“The financial services lobby and particularly the big banks are driving the agenda right now,” Travis B. Plunkett, legislative director of the Consumer Federation of America, said. “They are the ones gaining ground. Their strategy is clear: death by a thousand cuts.”
But there are those, primarily progressive think-tankers and Huffington Post matriarch Arianna Huffington, who have proposed a Move Your Money campaign, one based on a principle that conservatives will remember well — starve the beast.
Remove your money from the global finance casino and invest it in your own community. Find a credit union or local bank. Even our statewide banks like Wilmington Trust and WSFS are community-responsive and do a lot of small-business lending. The best way to reform a “too big to fail” bank is to make them not so big anymore.
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Whenever possible I think it is preferable to enact consumer driven reforms, so I agree with this type of action even if I question the motives of some of the people pushing it. It helps me to remember that the progressives didn’t create this idea, but they have repackaged it and created a marketing campaign that may be more appealing to a large segment of the population that wouldn’t normally listen to the typical libertarian pitch about the evils of the Federal Reserve and banking system. There have been people urging the public to get their money out of the big banks for a long time, they just didn’t present the message in a way that is palatable to many people.
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