Monday, May 3, 2010

How to deal with our lack of understanding of financial reform

The New Republic's Jonathan Chait makes a confession that's rare for a pundit: he doesn't know what he's talking about. Specifically, his "commentary on financial regulatory reform has been somewhat hamstrung by my skeletal understanding of the substance of the issue." He also thinks this ignorance isn't just his own quirky failing but extends to liberals and policy wonks in general:

Other policy commentators have learned more about this issue than I have, but even their opinions are heavily sprinkled with self-doubt. This points to the fact that liberals and the wonk community have a lot less confidence that financial regulatory reform will work than we did that, say, health care reform would work.
So how should they respond to this state of affairs? Chait says:
We could wait a few years until the debate has matured, but the truth is that only is the shadow of an economic crisis and a backlash over the bailouts does the political space exist to impose a reform that actually takes a bite out of Wall Street.
Apparently, the issue has addled his brain so much that he has trouble writing in grammatical sentences.

He continues:
So at this point, the best bet is to pass the toughest, most anti-Wall Street reform possible while the window of opportunity remains open. Then, if it proves too tough, or if somebody comes up with a better way to regulate the system, you can bargain away the too-tough parts of the law for something better.
You rarely see someone argue: we're unusually lacking in confidence about whether our ideas will work; therefore, let's try to exert as much power as possible, as quickly as possible! But just because this is a counterintuitive line of reasoning -- and one that most commentators wouldn't be willing to make explicit -- doesn't mean it's a bad idea.


Jason (the commenter) said...

Maybe he should try reading blogs like Calculated Risk or The Big Picture.

It's not like the information isn't out there if you go looking for it.