Several interesting items about financial (re-)regulation, and the unlikelihood of anything approaching adequate regulation getting through Congress, have come across our desk.
First, the business section of Friday's New York Times had a pretty good piece by Joe Nocera on financial regulation, Have Banks No Shame? He partially skewers Barney Frank for watering down the planned regulations, and there are some nice quotes from MIT economist Simon Johnson, a vocal critic of the banking industry. But Nocera ends up endorsing the flawed bill, even with its severely weakened provision for a consumer financial protection agency.
Next, our friends Jane D'Arista and Gerald Epstein and folks at the Political Economy Research Institute have started a new organization of economists pushing for tougher banking regulation:
Economists' Committee for Stable, Accountable, Fair and Efficient Financial Reform
here
Next, the Sunlight Foundation's blog has a great post (with this great graphic) about how members of the House Financial Services Committee are "on F.I.R.E":
One year after the biggest economic collapse since the Great Depression, Congress is still debating new financial regulations to protect consumers and prevent risk-taking in the financial sector. The House Committee on Financial Services is currently undertaking the important first step of writing, amending and voting on some of the pieces of the long-proposed financial regulatory reform. While debating these issues top committee members have been the recipients of disproportionate campaign contributions from the very industry that they are tasked with regulating. Twenty-seven committee members have so far received over one-quarter of their contributions from the finance, insurance and real estate (FIRE) sector. This includes Chair Barney Frank, Ranking Member Spencer Bachus, four subcommittee chairs and four subcommittee ranking members. Of the twenty-seven, twelve committee members received over 35% of their contributions in 2009 from the FIRE sector. Ranking Member Bachus, a crucial decision maker on the committee, received 71% of his campaign contributions from the finance, insurance and real estate (FIRE) sector so far this year. (These numbers run from January 1-June 30.) For his career, the Alabama congressman receives 45% of his contributions from the FIRE sector. Bachus leads the committee in his reliance on FIRE sector campaign contributions. Bachus has taking a position in opposition to most of the regulatory reforms. Bachus recently stated in a hearing, “this is absolutely the wrong time to be creating a new government agency empowered not only to ration credit, but to design the financial products offered to consumers.
Read the rest of the post.
Last but not least, the Buffalo News had an article on the conference of post-Keynesians that was held in the rust-belt city last weekend (with D&S classroom readers available at the book exhibit). The article has its charmingly corny moments, starting with the title (get it?) and the first quotation, but it's nice coverage.
Scholars Are "Keynes" on Regulation
Economists Argue Financial Instruments Need More Scrutiny
Read the original article.