After citing Haley Sweetland Edwards’ article in the March-April issue of the Washington Monthly as “the best single piece on Dodd-Frank implementation I’ve seen,” the Roosevelt Institute’s Mike Konczal (a.k.a. the Rortybomb Blogger) goes on to examine the current lay of the land, and particularly focuses on the counter-intuitive fact that prospects for legislative tinkering with Dodd-Frank are higher than they were before the president’s re-election:
[W]hile the threat of Congress rolling back Dodd-Frank, one of President Obama’s major achievements, with new bills wasn’t on the radar in 2011, it may be in 2013. Isn’t that backwards?
Part of the answer is that the rules are becoming clearer, so financial industry lobbyists have more concrete targets to bring to Congress. But there’s a political dimension as well. The general shutdown and polarization that dominated Congress after 2010 made a congressional threat to Dodd-Frank less likely. And ironically, the rise of the Tea Party within the conservative movement, even with its anti-Obama and anti-regulatory zeal, made bills to weaken Dodd-Frank less likely to pass. One reason is that the Tea Party wanted a full repeal of the bill or to gut entire sections, rather than more targeted interventions. Another is that the biggest losers in the 2010 shellacking were centrist “new Democrats,” those that would be more responsive to the needs of the financial industry than the progressive caucus that gained in relative strength afterwards.
In other words, Congress polarized over Dodd-Frank, and that made strategies to selectively amend it less feasible. But now:
Now that the GOP is realizing that Dodd-Frank is here to stay, we might see more effort to reach across the aisle to dismantle smaller pieces of it in accordance with what the financial industry wants. Health care is facing a similar situation, where conservatives policy entrepreneurs are currently debating whether or not to work within the framework of Obamacare or continue trying to repeal it. Sadly, conservatives will probably do far more damage if they get to the point of accepting that Dodd-Frank is the law of the land and try to do more targeted repeals rather than wage all-out war.
All the more reason for vigilance.