Since just after Obama took office, a primary complaint among those pressing hardest for financial reform has been that the White House ceded its leverage over the banks by waiting a year and a half to tackle reform. This argument, which I touched on in my recent profile of Tim Geithner, holds that in the midst of the crisis public anger at Wall Street was so overwhelming--and politicians so fearful of running afoul of it--that truly tough reforms were feasible; but now that the crisis has abated and the anger ebbed, the opportunity has vanished and reform will consequently be weaker.
It's beginning to appear, though, that the White House delayed so long in getting to financial reform that it is actually going to benefit the reform crowd because lawmakers are nervous about the approaching midterm elections. The backroom deals that would ordinarily water down the bill are no longer possible. Reformers have leverage again. As one financial lobbyist told the Washington Post,
You've got an environment, six months before an election, where politicians are acting like politicians. They are viewing any vote as a potential campaign ad. And that might not be good for any of us.
Speak for yourself, buddy.
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