After Noam Scheiber’s
The New Republicthis week set off a firestorm of articles on Sen. Elizabeth Warren (D-MA) and a potential 2016 run (it’s not happening), reporters have turned their attention to whether Warren could shift the conversation and bring financial reform to forefront of the next presidential election. The short answer: No.
So what may be the most powerful issue in American politics has lay unused by either party since the crisis. Either party could pick it up. A bill to break up the big banks has the sponsorship of liberal Democrat Sherrod Brown and conservative Republican David Vitter. Warren has a tough regulatory proposal of her own, which has the support of John McCain. A Warren campaign could force Clinton to follow suit, and possibly even pressure the Republican nominee.
Whenever a supposedly politically salient issue is being ignored by both sides, it’s important to ask why. In this case, it’s pretty obvious. Financial reform isn’t sexy. It’s complicated and boring. A policy agenda focused on increased regulation doesn’t bring out voters. That’s part of the reason why many politicians settle on breaking up the big banks as their preferred policy prescription. It’s easy to explain. Rallying support for greater capital requirements doesn’t work.
But Wall Street is a powerful force in Washington. Despite his populist rhetoric in 2008, President Obama accepted huge donations from banks and financial institutions. That was in a year when financial reform was at its peak. As the economy has slowly recovered (emphasis on slowly), the public’s attention has shifted away from financial reform towards jobs and Obamacare. There simply isn’t a strong appetite for the issue. Add in the fact that demonizing the banks will put a candidate at a distinct monetary disadvantage and it’s easy to see why Clinton will likely take a moderate line on financial reform.
No matter how many speeches Warren gives, the fundamental nature of reform is that it is isn’t salient with voters. Few issues have an impact on elections and financial reform won’t be one them.
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