Krugman: Dodd-Frank is better than you think

[pampango]

Half A Loaf, Financial Reform Edition

A lot of the debate over the Sanders insurgency hinges on whether you see Obama-era reforms as trivial, utterly inadequate to the problems, or as a half loaf that’s a lot better than none. I’ve been making the case that Obama energy policy is going to have a much bigger impact on climate change than many people think. But what about financial reform?

Well, it partly depends on what you consider the problem. I’ve been on record since early days saying that too-big-to-fail is not the key issue, so that the fact that big banks remain big is, um, no big deal. The real question — or so I’d argue — is leverage within the financial sector, and in particular the kind of leverage with no safety net that characterizes shadow banking.

Should we have had a stiffer financial reform? Definitely — required capital ratios should be a lot higher than they are. But Dodd-Frank’s rules — especially, I think, the prospect of being classed as a SIFI, a strategically important institution subject to tighter constraints, have had a real effect in reducing risk.

The reality of the Obama era, for progressives, is a series of half loaves. But after all the defeats over the previous 30 years, aren’t those achievements something to celebrate?

http://krugman.blogs.nytimes.com/2016/02/03/half-a-loaf-financial-reform-edition/

Half loaves may be better than no loaf but there is always the prospect that we could have had a full loaf (with the risk of no loaf at all) to dampen enthusiasm.

[Erich Bloodaxe BSN]

1. There seems to be gravel mixed into that loaf. nt

[onecaliberal]

2. We had Frank Dodd after the last collapse, if it's so great, WHY

are the banks two times bigger and even more complicated now, then they were when the collapse first happened?

[mountain grammy]

3. Keep your half loaf, Krugman. I think we can do better.

Also, was the repeal of Glass Steagall one of "all of the defeats over the previous 30 years?" Since Clinton signed it and all. Just asking.

[jehop61]

5. Yes we can

IF we have a complient congress that goes along with a Pres. Sanders' ideas. Without that, all he can do is fight with them.

[TIME TO PANIC]

4. Krugman is groveling for a cabinet position.

[KamaAina]

6. That would explain why he's been in the tank for Hillary lately.

[TIME TO PANIC]

7. Yep, I love how this election is exposing people's true colors. n/t