By Dan Froomkin
1:03 PM ET, 06/18/2009
I wrote yesterday that it looked to me like President Obama had undershot rather than overshot in his proposals for changes in the nation's financial regulatory system.
David Cho and Zachary A. Goldfarb writes in The Washington Post:
The plan President Obama unveiled yesterday to overhaul the government's oversight of the financial system was not the wholesale remaking of Washington that the administration had initially envisioned.
As the proposal came under intense pressure this spring, its chief architects held firm to a few reforms they deemed the most fundamental to averting another financial crisis while giving ground on nearly everything else.
Time and again, lawmakers, regulators and industry lobbyists pressed their concerns behind closed doors at the White House and the Treasury Department, according to participants.
Joe Nocera writes in the New York Times that:
in terms of the scope and breadth of the Obama plan — and more important, in terms of its overall effect on Wall Street's modus operandi — it's not even close to what [Franklin Delano] Roosevelt accomplished during the Great Depression.
Rather, the Obama plan is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam rather than rebuild the dam itself. Without question, the latter would be more difficult, more contentious and probably more expensive. But it would also have more lasting value....
If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.
Timid as it may have been, however, it still managed to ruffle feathers all over.
Walter Hamilton and Jim Puzzanghera write in the Los Angeles Times:
At its core, President Obama's overhaul of regulations for the financial industry seeks a fundamental change: Make the federal bureaucracy work for consumers, not just Wall Street. And Wall Street, not surprisingly, doesn't like it.
Stephen Labaton writes in the New York Times:
No sooner had President Obama proposed a new regulatory road map for the country's financial system on Wednesday than senior lawmakers expressed reservations about one of the plan's central elements — to broadly expand the reach of the Federal Reserve to regulate financial risk across the entire system.
And Binyamin Appelbaum writes in The Washington Post:
Legislators, regulators and advocates all welcomed the idea of change, but industry groups already are arguing that elements of the plan will hurt consumers or the broader economy, not to mention financial firms.
Opposition is piling up with particular speed against the idea of a new agency with broad powers to protect borrowers and other customers of financial firms, setting up a high-stakes contest between the industry and the White House for the loyalty of a few moderate senators who increasingly hold the balance of power.