The Obama Administration, through the Treasury Dept., is getting ready to test how far the government can go in regulating American business. Fresh off its victory to reform credit card practices, the next battleground will be Treasury‘s plan for tougher oversight of the financial industry through revamping the agencies that regulate it.
That old phrase about every action having an equal and opposite reaction couldn’t be more apt in this case.
Already the financial industry is pushing back on plans that haven’t even been unveiled yet.
They concede that the economic crisis has significantly weakened their hand. Yet they now say their concern is that the government will overreach, and impose too much regulation.
For the rest of us, the problem is determining what constitutes overreaching? Americans aren’t comfortable at all with big business making that determination. Just as many may be a bit nervous about the point man in this financial oversight reform. That would be Treasury Secretary Tim Geithner. You can include me among the skeptics that he’ll come up with a package that embraces meaningful change.
Is it too much to ask that those charged with changing a failed system not be too cozy with that same system? Geithner doesn’t come off as a sinister, evil bureaucrat. He just seems content to nibble around the edge of real change rather than confronting the financial community and using the power he does have.
No matter what he comes up with (we may see later this week), expect Republicans in Congress and their buddies in talk radio to skewer any talk of regulatory change as another Obama step down the road to socialism. Of course, they know better. Few people, least of all President Obama, want to totally inhibit the financial markets’ ability to operate, and make money. Their excesses, as evidenced by the market meltdown of last fall, must be curbed.
Expect to see and hear much noise if part of Treasury’s plan is to increase the power of the Federal Reserve. The Fed has a long and involved history in terms of its role in the American economy. This we do know, however. Big business has lined up lobbyists galore to make their case once legislation reaches the Hill. While it may take place out of the glare of the media spotlight, this is a battle worth watching as it unfolds in the weeks ahead.
Who do you think will win? Big business, or the government?
And, most importantly, what if anything will the American people get out of it?