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Voters have 99 reasons for optimism about banking reform
March 26, 2013 - Mike Maneval
James Pethokoukis, continuing to note the importance of banking reform and writing for National Review Online Monday, assessed a unanimous Saturday vote in the U.S. Senate, a 99-0 vote on an amendment to end direct subsidies and other, more indirect funding advantages for “too-big-to-fail” banks. Pethokoukis does a thorough job illustrating both why the measure, sponsored by Republican Senator David Vitter of Louisiana and Democratic Senator Sherrod Brown of Ohio, is good policy and why the odds of the policy being granted any muscle are long.
Pethokoukis allows Vitter himself to explain that the “handouts” to favored institutions create obstacles to competing community banks and credit unions and “create an uneven playing field.” Pethokoukis later approaches the issue from a position of ideological principle, arguing “too-big-to-fail” banking “reflects government meddling and crony-capitalist collusion rather than market forces.”
He also concedes that the amendment is nonbinding and speculates, with sources in finance and punditry concurring, that the chances tougher policies regarding “too-big-to-fail” banks will fully be enacted and enforced are slim. The cautious and politically calculating Obama administration has, in Pethokoukis’ words, “ticked the box” of financial reform on its proverbial to-do list, and along with many in congress will be hesitant to provoke the ire of the well-connected figures leading such institutions.
But good policies usually are the result of dedication and hard work, and the efforts of Pethokoukis to draw attention to an important measure — and a strong policy passing the Senate 99-0 — should invite some optimism, and invite the hard work of voters in ending public subsidies to favored financial institutions and levelling the financial playing field.
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