If you read Paul Krugman’s blog, you can pretty well guess what his columns will be about. He even says that he uses his blog to work out his thinking. And for the last week, he has been going on a bit about the Dodd–Frank Wall Street Reform and Consumer Protection Act. His argument is that it is the Rodney Dangerfield of Obama successes: it don’t get no respect. And as he shows in his column today, Obama’s Other Success, it actually is working.
He highlights two aspects of the law that are good: the Consumer Financial Protection Bureau (CFPB) and the government’s explicit ability to temporarily take control of “too big to fail” banks if they need to be bailed out. Krugman spent more time talking about CFPB in the column. There was a better discussion of the “too big to fail” part in a blog post last week, Good News on Financial Reform. I basically agree with him. But Dodd-Frank is still like everything from Obama: policies that Republicans would have been fine with had they come under a Republican President.
I think that Krugman made one big mistake in his column, however. He noted:
Not really. It doesn’t say much of anything about the law that Wall Street fought it tooth and nail and continues to snipe at it. Long before the Republican Party learned to “work the refs” by claiming that the center-right policies of Bill Clinton were “Socialism! Socialism I tell you!” the business community had perfected this. That’s why they would claim that a one cent tax on every billion dollars of profit would be the end of freedom in America.
I often get this idea from the Koch brothers’ attacks on Obamacare that they are pleased as punch that they are getting to call this free market healthcare law “socialism” and not actually having to fight an actual socialistic law. It’s like they know they’ve won and they are just going through the motions of outrage as a hedge against anyone getting comfortable enough with the law that they might actually decide to do something that is going to cost the rich some real money. And let’s not forget just how much welfare the Walton family gets via subsidies their employees get because they are paid so poorly. The rich understand they have it very good in America; they just pretend otherwise.
So the fact that Wall Street continues to vilify Dodd-Frank does not indicate that it is that big a deal to them. I suspect it is more to protect against more liberal policies like a financial transactions tax. And that is more what this is about than any real concern about the law. So Dodd-Frank is doing some good and I’m happy about that. But the opposition of the business community to anything is meaningless.