There have been two salient reactions to the news that Elizabeth Warren is trying to reintroduce Wall Street’s nightmare legislation, Glass-Steagall. One is a big populist high-five, the other is complete and total indifference.
The first is Washington’s reaction, the second is Wall Street’s reaction. Together they perfectly highlight the ultimate difference between how bankers and politicians conduct their affairs.
Of course, there’s the regular noise on this topic too — the normal drone of journalists and lobbyists telling and re-telling the story of a bill that Wall Street killed in 1999, and why separating commercial and investment banks is good or bad. That’s just par for the course.
What they know, what everyone knows is that Warren’s legislation isn’t likely to go far.
For Wall Street’s part, bankers don’t get why politicians would even introduce legislation like this. If it has no legs, what’s the point? Wall Street is a results driven place. A trader would never set something up knowing it’s not going anywhere or just to see how it goes. It makes very little sense to them.
But that’s OK. Wall Street doesn’t play Washington’s game, so Elizabeth Warren’s move may seem futile, but it isn’t. Washington is about the process. It’s about the conversation as much as it is about the result.
Elizabeth Warren was elected to the Senate to ensure that the issue of bank regulation stays at the forefront of national politics, no matter what. It doesn’t matter if the Chicago White Sox win the World Series or we put a man on Mars, Warren is going to want to talk about bank regulation.
That’s why she tacked bank lending rates to student loan rates argument earlier this year. That may have made no sense to people looking for results, the ones that were actually trying to solve the problem, but that wasn’t the point.
The point was, and still is, keeping banks, what they do and how they do it, on the tip of the national tongue. That’s what politicians do, they talk their issues.
So maybe Glass-Steagall won’t pass. Doesn’t matter. Warren’s doing her job, sparking a conversation and seeing if the interest is out there. Reactions from readers on our end, at the very last, say that it is — check out Reddit/Twitter etc. if you want. People still care about this stuff.
Additionally, if people show they care, if a big enough stink is made, the conversation may turn to another reform for Wall Street. It may not be Glass-Steagall, but it might be something lighter.
That can’t happen if there’s no conversation, and this political theatre is a conversation starter.
The questions is how long it can keep going.