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Regulators, mount up!

Elizabeth Warren on Consumer Protection (MMBM) from the Roosevelt Institute on Vimeo.

Reporting my weekend column on the role that regulators will play in the success -- or failure -- of health-care reform and financial regulation left me heavily convinced about the importance of securing strong leadership for these efforts in the first place.

This is particularly true on the financial regulation bill, which punted an enormous amount to regulators. According to CNN's count, the bill calls for 68 separate studies to settle its questions. That is to say, there are at least 68 instances where the regulators are charged both with figuring out what to do and with doing it.

That means that getting the right regulators in place is going to be crucial to making these bills work. And one of my main conclusions on that front is that if you're going to attract serious talent, you need leadership who's attractive to serious talent. Don Berwick, the administration's nominee to lead the Center for Medicaid and Medicare Services, is a legend in health-care circles. You really could imagine the best young people in the field rushing to work with him, particularly when health-care reform is just starting up. Similarly, if you're looking for a way to attract smart young lawyers and financial types who want to stand between banks and consumers, you want to go with Elizabeth Warren (whose presentation on consumer protection I've embedded above), the person who inspired most of them to join that cause in the first place.

But the sad tension of these positions is that the interesting, exciting choices are, almost by definition, controversial. That's how they made their reputations: Taking up a tough crusade and pursuing it with vigor and even flair. But as you see in the resistance to Berwick's nomination, and in the rumors* about Warren, this makes them tougher to confirm. The safe choices -- the bland ex-congressmen who often get called to these roles -- might face easier nomination fights, but what makes them safe also reduces their ability to attract talent, and that makes it less likely that the bills will succeed.


*Democrats aren't seriously considering Martha Coakley -- yes, that Martha Coakley -- to lead the CFPB, are they?

By Ezra Klein  |  July 6, 2010; 4:47 PM ET
 
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Comments

"That means that getting the right regulators in place is going to be crucial to making these bills work"

Lack of straightforward and understandable clarity in said regulations makes them almost, if not entirely, worthless.

Punting so much to regulators is almost the same as doing nothing. Might as well put the Republicans in charge, right? Am I right?

I doubt we're going to find "the right regulators", unless by "right regulators" we mean some folks who know how to party. Then we might do all right. Otherwise, letting the regulators right the laws is . . . well, not much is going to change, and what does change probably won't be for the better.

Posted by: Kevin_Willis | July 6, 2010 5:04 PM | Report abuse

You've got to give Martha Coakley a break - she was a completely incompetent candidate but as an AG she's been nothing but stellar for Massachusetts.

Posted by: sy12 | July 6, 2010 5:52 PM | Report abuse

I have nothing to offer here but my continued support of Warren G references.

Posted by: MosBen | July 6, 2010 5:54 PM | Report abuse

Sy12 is right. There is essentially no positive association between running for Senate and being a strong leader of an agency like the CP bureau. If anything, any such relationship is likely to be negative - a very good politician would likely make a very poor CP director.

Warren would be great, but so would a strong AG, like Coakley or Madigan. Short of Warren, who I don't think will get it, my choice would be Miller of Iowa, who championed lending regulation before most anyone else. If it ends up being an economist (with 2 or 3 exceptions), strong regulation is DOA. If a good AG or perhaps Barr, things will be promising.

Mr. Klein - you are right about the need for strong leadership in agencies - it is crucial. But you have misled alot of folks into thinking that Congress could have written a bill that would NOT have required strong regulatory leadership and NOT have required many important details to be drafted in rule-making. The world - especially the world of finance - is too complicated to write it all down in legislation - even in 2,000 pages. And of course, rule making is able to be more adaptive than legislation. It just cannot be done. Comments to the contrary are simply naiive.

Posted by: idw3 | July 6, 2010 6:24 PM | Report abuse

Sy12 is right. There is essentially no positive association between running for Senate and being a strong leader of an agency like the CP bureau. If anything, any such relationship is likely to be negative - a very good politician would likely make a very poor CP director.

Warren would be great, but so would a strong AG, like Coakley or Madigan. Short of Warren, who I don't think will get it, my choice would be Miller of Iowa, who championed lending regulation before most anyone else. If it ends up being an economist (with 2 or 3 exceptions), strong regulation is DOA. If a good AG or perhaps Barr, things will be promising.

Mr. Klein - you are right about the need for strong leadership in agencies - it is crucial. But you have misled alot of folks into thinking that Congress could have written a bill that would NOT have required strong regulatory leadership and NOT have required many important details to be drafted in rule-making. The world - especially the world of finance - is too complicated to write it all down in legislation - even in 2,000 pages. It just cannot be done. Comments to the contrary are simply naiive.

Posted by: idw3 | July 6, 2010 6:25 PM | Report abuse

"The world - especially the world of finance - is too complicated to write it all down in legislation - even in 2,000 pages. It just cannot be done."

Overwhelming complexity--either by design or by negligence--shouldn't be a mitigating factor. It's part of the problem that needs correction.

Posted by: slag | July 6, 2010 6:59 PM | Report abuse

All "regulators" appointed by Obama and his comrades will be "progressives" (Marxists) ready to help Obama lie, manipulate, intimidate and coerce Americans, mainly seniors, into giving up their health care rights and preparing to die so Obama and his comrades can "save" money.

Posted by: AntonioSosa | July 7, 2010 1:38 AM | Report abuse

@slag-

Good luck with that (correcting the inherent complexity of the financial system). The financial system has been too complicated to regulate (well) via legislation alone since at least the 1930s, and the systems before that were incredibly abusive and available to a very small segment of the population.

Rulemaking processes came with - are inherent in - any meaningful regulatory system. Anything else reveals just an ignorance of how things actually WORK.

Posted by: danimmer | July 7, 2010 9:17 AM | Report abuse

I'm glad I'm not the only one to equate Nate Dogg and Warren G with the regulatory state. Enjoy this hilarious rap song about administrative law from NYU Law's finest:

http://www.youtube.com/watch?v=2k-_TzksYNc

Posted by: sirchimpy | July 12, 2010 4:02 PM | Report abuse

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