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Chuck Grassley Has Done Enough.
After spending the last year as the Lucy to Max Baucus' Charlie Brown, Senator Chuck Grassley is now expressing his opinions on Financial Regulation. They don't make a ton of sense, and, unsurprisingly, Grassley thinks the process will take much longer than people believe.
Thank goodness Grassley is not on the relevant committee. This is someone who can say that "The Fed's got a full-time job on monetary policy," so it shouldn't be a systemic risk regulator, and then say that there is no need for a Consumer Financial Protection Agency, since the existing institutions can handle the problem. That's hard to understand, since right now the Fed is the existing institution regulating consumer financial products. Why don't consumers deserve someone whose full-time job is protecting their interests?
And yes, Grassley is worried that regulation would stifle innovation:
"I believe that, in the dynamics of our economy, that it would be just practically impossible to set up an entirely risk-free system without total government regulation," he said.
Sure, but who is trying to set up a risk-free system? All that Financial Regulation Reform is setting out to do is make sure that the right people -- in the private sector -- bear reasonable risk, not taxpayers. Throughout his remarks, Grassley repeatedly defends the status quo and does not mention a single thing he'd change. That's all very conservative, but it's not going to stop the next financial crisis. I never thought I'd say this, but, please, Chuck, stick to health care!
-- Tim Fernholz
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