It is heartening that many of the financial institutions that took TARP funds have been lobbying against the Obama administration’s bank reforms.
There is absolutely no reason banks should feel required to support the administration simply because it continued and deepened the bailout policies it inherited from the Bush adminstration.
In fact, if the effect of the government’s intervention in the financial sector were to intimidate bank executives into unquestionably supporting the ideas of regulators and politicians, that would be cause for alarm.
Dissent from the ideas of the reigning politicians is an important part of achieving effective regulatory reform. Bank lobbyists raising important objections to the Obama administration’s proposals should be applauded. It is those who are arguing against the right of banks to dissent that are endangering attempts to fix the financial system.
Many arguments marshalled by the banks will be short-sighted, self-serving, and probably subject to ideological constraints popular among bankers, of course. But there’s no reason to think that the policies favoured by bureaucrats and the Obama administration are any more rational or public spirited.
This competition of idea and policies will not likely produce perfect reforms. But that’s no reason to give the Obama administration a monopoly on setting the reform agenda.