Can Congress Be Trusted With Financial Regs?

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James Pethokoukis writes today that Congress shares some of the blame for the financial crisis. His bill of particulars, taken from a paper by Ross Levine of Brown University, includes poor regulation of (a) ratings agencies, (b) credit default swaps, (c) investment banks, and (d) Fannie Mae and Freddie Mac. This has become a steady drumbeat over the past few weeks: sure, Wall Street screwed up, but federal regulation of the industry sucked too. So how can we trust these clowns to do the job right this time?

If conservatives hadn’t waited until now to make this argument, I might think it was one of those brilliant Rovian strategies, going straight after your opponents’ strong point and then turning it around on them. You liberals say that Congress was a slave to Wall Street interests? You’re right! So there’s no point in letting them pretend to regulate Wall Street yet again.

But now? This long after the regulation train has left the station, this argument sounds so dumb it barely even needs rebutting. Is the point truly to pretend that no regulation will work? Or that the current proposed regs are actually favors to Wall Street? (A few people have tried to suggest exactly that.) Or to goad Democrats into beefing up their bill so much that it has no chance of passing? Or what? The fact that Republicans and Democrats both bought into the deregulatory fervor of the past three decades doesn’t mean they can’t both unbuy into it if they work up the gumption. And while nothing lasts forever, a decent set of finance regs will improve things for a few decades anyway. If the point of this particular critique were truly to lobby for tighter regs, it would be great. As it is, it’s just juvenile.

UPDATE: Mike Konczal has a more sophisticated take on this game of three card monte here.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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