Barack Obama’s biggest second-term challenge isn’t guns or immigration. It’s saving his biggest first-term achievements, like the Dodd-Frank law, from being dismembered by lobbyists and conservative jurists in the shadowy, Byzantine “rule-making” process.
Finally, there’s no mystery about how to stir up public attention: the press needs to do a better job of covering the regulatory process. Again, that may seem unreasonable, especially in an age when for-profit news has lost its business model. But it needs to be done. Those same editors, reporters, bloggers, and wonky producers at The Rachel Maddow Show who followed the passage of Dodd-Frank so closely two and a half years ago should tune in again.
As of early February, fewer than 150 of the estimated 400 rules from Dodd-Frank had been finalized, according to Davis Polk & Wardwell, a law firm that keeps track of such things. Nearly the same number had not even been proposed yet. All together, almost 65 percent of the law, including potentially significant hunks, like rules on extraterritoriality and systemic risk, have yet to be finalized.
In the next year or so, the vast majority of these new rules will enter the regulatory gauntlet, while agencies and industry will watch carefully as those that have already been finalized are implemented and enforced. Industry and its allies in Congress will scream bloody murder and claim that Dodd-Frank rules are imposing an insurmountable burden on industry, the economy, and the American people. Meanwhile, the agencies either will attempt to hold the line or, without the glaring light of public scrutiny, they will allow industry to take the lead again. What happens in the next year or two will have a profound effect not only on Dodd-Frank, but on the future of our financial industry. “We’re in the fifth inning,” said Kelleher. “The only way to guarantee you’ll lose is if you walk out before the end of the game.”
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