The Delayed Gratification of Wall Street Reform

Once thought of as a given, Wall Street reform took a year and a half to arrive. Now, Obama and Democrats can move on

The broad spectrum of Democratic allies is rejoicing now that the Senate has passed its much anticipated Wall Street reform bill, the fate which languished for months as the bill was chiseled into vague form, passed, re-chiseled in conference committee, and glued together once more after a deal with Sen. Scott Brown fell apart and then was resurrected, all as the massively complicated bill morphed into what the Senate has now approved.

Statements from the party, Organizing for America, individual lawmakers, candidates, and labor groups flooded the inbox moments after passage.

To understand what this bill will actually do (beyond being "sweeping"), read this post by Daniel Indiviglio of the Atlantic Business channel, who has followed the bill through all its committeed incarnations.

Financial reform, as has been postulated before, stands to help Obama's party this fall: it's their response to the crash, and it will supply them with a bragging point on the campaign trail this fall. They passed tougher regulations of Wall Street in the face of Republican opposition. The talking points against financial reform are not cohesive. Some opposed it because, they warned, it didn't do enough to stop "too big to fail"; others simply don't like regulation, and they see it as yet another expansion of federal power. These arguments do not always align, and in the political message war, the advantage, on its face, goes to Democrats.

Make no mistake, this is a big accomplishment for the party and the Obama administration. It's a major thing they wanted to do, and they did it.

But nuance is lost in the description of Wall Street reform as a major part of President Obama's agenda. It is, but it occupied a different place in the president's platform, which was described early in the administration as having three distinct components: health care reform, energy reform, and education reform.

Wall Street reform was not on that list, partly because that list was pushed out in conjunction with Obama's first budget proposal last spring, and Wall Street reform doesn't entail the same kind of budgetary impact as those three reform genres--but partly because Wall Street reform was taken as a given. Of course Obama and Democrats would pass tighter regulations of Wall Street in response to the nation's financial collapse; if they didn't, it would be a massive and idiotic oversight.

The administration's agenda was solidified, after the campaign, during a time of massive populist, anti-Wall-Street upheaval. The financial sector had been villainized--and had villainized itself--to the point where AIG employees were advised not to wear their corporate AIG gear around town, lest they get attacked with shovels. So when Obama's plans for the future were discussed, financial reform was uttered in either the first half-breath or the last. It was mostly thought of as a given; posed as something closer to the stimulus--an obviously necessary response to crisis, something that must be done first, almost before anything else could be gotten out of the way--than to health care or energy.

Surprisingly, it has taken a very long time to accomplish. So when it's measured as an accomplishment of Obama's agenda, it should be looked at as something that has finally happened, letting the administration and the Democratic majorities in Congress at last move on to the true wish-list items.

Just as Obama's fiscal hands were tied by the consensus that a stimulus was needed, putting him in a many-billion-dollar hole to start the presidency, so the legislative business was wrapped up for a year-plus in passing Wall Street reform. Now it's over, and Democrats can both breathe and confront the asperations that had to wait.