The madness of financial reform

So I’m a lot less invested in this financial reform business than I was with health care reform.  Part of it is simply that I don’t really understand what is going on.  My grasp on economics is rough at best, and this stuff is insanely complicated.  The episodes from This American Life about the crisis are good and everything, but they don’t really prepare you to make judgments about the details of regulatory reform.

As far as I can make out, the bill that’s going to pass will be good-not-great.  That’s in part because (unlike health care where the best case scenario was quite obvious, if politically infeasible) I don’t think there is any clear sense of what is definitely the right way to go.

I’m inherently skeptical of full-throated populism, for two reasons.  First, it can so easily get turned toward anti-intellectual ‘throw all the bums out’ sort of stupidity that does no one any good.  But also because it scares me how easily it bleeds into the kind of destructive nationalism.  Anger is good, but unfocused rage is a dangerous and scary.

That said, I find it hard to figure out if in this particular instance the people who are calling for mobs and pitchforks are really wrong.  My interest in justice is usually pretty cerebral but it’s hard to keep things balanced when you start to understand just how badly these people messed things up, and just how reasonable it was for them to do so, given the constraints (or lack thereof) they were working with.  So while I don’t want to assign excessive blame the particular people in these Wall Street firms and hedge funds and such, I do want to align myself with the idea that there is something seriously wrong in the state of Denmark.

But, as I said, that’s a feeling more than something I can state definitively.  I’m not interested in revenge for its own sake.  If it turns out that the best thing going forward involves a light hand I’m not going to demand more just to ease my feelings of anger.

All of that is a (long) preface to my thoughts on the political elements of this fight–something I do feel confident speaking about.

Yesterday, the Democrats attempted to get the bill to the floor.  Not to vote on the bill, just to bring it to the floor so it can be debated, amended, etc.  And the Republicans filibustered.  Which is just insane, and–even more than all health care shenanigans–clarifies just how absurd our Congressional system has become.

The Republicans, remember, were up in arms just a month ago about backroom deals. So now, they demand…that the Democrats work out some backroom deals before they’ll let the bill even come to the floor for public debate.  Don’t get me wrong–I think the fetishization with publicity in law-making is silly.  That’s not the issue.  The real matter is simply that we have an institutional structure which is premised on the idea that the elements within it will operate in good faith.  And we have a political culture which is virulently opposed to operating in good faith.  It’s a deadly mixture.

People are a flutter with the news that Congress is suffering the lowest ratings in history.  How is this surprising?

As Joe Klein says:

You’d think it would be in everyone’s best interests to get this Wall Street Reform passed quickly, elegantly, overwhelmingly and without games, since it’s something that the American people favor by huge margins. But this Congress is one sick culture.

It’s a great time to be an American, I guess.

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