Tuesday, September 01, 2009

Super Regulator

One of the more irritable political fights in Obama Washington is the one between Geithner Bernanke on one side and FDIC Chief Sheila Bair & SEC Chief Schapiro on the other. People are used to partisan attacks and counter attacks among Congress members. But Congress members are in the Washington to wage Politics since that is the only surest way of getting done something for people and have some accountability. But 'institutional turf warfare', that is a different matter and that is what is taking place betweenGeithner and Bair. Bernanke is by and large with Geithner in this brawl. But then again he is the smartest among all these players and hence wise enough not to exceed these arguments beyond a point.

That cannot be said for Geithner and Bair. First, there were reports about his expletive laden stormy meetings with all these regulators demanding obedience to White House and Congress. Now, we see SheilaBair's public response to Geithner in a NYT Op-Ed.

There is a ting of 'wise ladies' (rhyming with wise Latina tone of Supreme Court Judge Satomayor) versus 'usually failed men of Money' to all this fight and hence it is natural for the bastion of Feminism, Gray Lady, to give voice to Sheila Bair's arguments. I guess feminists at NYT are making sure that Bair's voice is heard. Something is missing here because it is not like NYT is running a deeper debate about financial regulations for a long time by giving equal representation to all contending parties. NYT does publish once in while articles by Geithner and Bernanke, but those have been more on state of economy than with a sustained focus on regulation. NYT is not Financial Times in this matter, the paper which been producing some of the excellent commentaries on this topic. (The othe one is Economists. Both outlets are British. American main stream Media has not been as incisive here as should have been.)

The problem with Bair's article is it is full of contradictions, totally incoherent and very poorly articulated. Credible blogging demands that I slice and dice it (Greenwald style?). But it is for readers to judge the article since it is not even worth that much of attention for analysis. She argues that singular, co-ordinated supervisory failure as responsible for this financial mess and in the same breath says however it should not result in one institution to regulate it? Why? What is wrong when Geithner argues that in times of crisis, 'committees cannot' act? How do you undermine an argument when Bernanke forcefully argues for a systematic regulatory authority to unwind mess like AIG?

Bair's article does not sound any convincing at all and simply seems to be a poor response by a bureaucrat to defend the turf. It is not that Geithner is all correct in this debate. There are reports even Bernanke is 'going slow' is making Fed to accept all authority. But such shabby Op-Eds and public fights show that overall process of 'financial regulatory reforms' is still screwed up and nothing worthwhile is happening there. Geithner's leadership conduct is not inspiring here too. Some how one feels that it will be the quite handling by Bernanke which only can steady this debate. Of course, even for Bernanke there are quite a few over zealous critics in Congress who do not seem to separate out legitimate concerns about Fed from the politician's need to posture.

All in all a royal mess. It is a long way before anything useful can be yielded for Public. 'Susage making' is way too ugly and counter productive at this point.

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