Things That Make Me Go “Hmmm”

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In a post about a spat between the United States and Europe over who’s implementing financial reform faster, Felix Salmon says:

In the short term, the biggest winners in any fight between regulatory authorities are always going to be the banks, who will happily arbitrage differing regional regulatory regimes and take advantage of their parents’ squabbles to stay out drinking all night. In the long term, however, even the banks would ultimately prefer a single global regulatory regime with clear ground rules and a level playing field — something which lets them concentrate on their main job, of banking, rather than expending enormous effort on lobbying and loopholes.

Really? In the long term, I’d guess that clear rules and a level playing field are the last thing that big banks want. Lobbying costs are a drop in the bucket to them and produce returns that make Bernie Madoff look like a piker. What’s more, over the past couple of decades big banks have made it crystal clear that they have very little interest in their “main job” and are instead intensely obsessed with bending rules and discovering clever innovations that will make them trillions of dollars in trading profits. “Banking” is for suckers.

This is why simple, blunt rules are best in the financial industry. Sure, they’ll end up being inefficient in some ways and unfair in others. That’s inevitable. But it pales compared to the inefficiency and unfairness of business as usual. Unfortunately, that’s largely what we still have in the aftermath of Dodd-Frank and Basel III. They’re better than the status quo, but they simply aren’t blunt enough to rein in the rocket scientists of Wall Street for long. And that’s just the way Wall Street likes it.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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