On September 16, 2008, as the financial crisis was mushrooming across the US economy, Presidential candidate Barack Obama promised, “To get out of this crisis – and to ensure that we are not doomed to repeat a cycle of bubble and bust again and again… we must build a 21st century regulatory framework, and we must pursue a bold opportunity agenda that creates new jobs and grows the American economy.”
Nearly two years since the global economic meltdown, now-President Barack Obama has signed into law financial oversight reform. The Wall Street Reform and Consumer Protection Act is meant to prevent another 2008-type economic meltdown that spent shock waves throughout the world.
The bill includes a new watchdog organization to examine and enforce regulation over banks and credit card companies to prevent them from beating up beleaguered consumers. Financial institutions will have their speculative practices regulated and the government will be able to intervene in firms about to collapse.
So when will we know if this bill is enough to save us from financial doom? Critics have lambasted it from the start – saying it wouldn’t prevent another catastrophe and doesn’t offer the kinds of protections that were dismantled a decade ago. But maybe it was as good as Democrats in Congress could get… and maybe some reform was all that the American public could stomach. Polls show Americans are apathetic about Wall Street regulation and reform in general.
A recent Bloomberg National Poll found 78% of Americans aren’t confident that the bill will make their financial assets more secure. The poll also found Americans split evenly on whether more, less, or the same amount of regulation is needed. Not surprisingly, there weren’t too many bankers in the 400 person audience for the signing.
That’s because the vast majority of them don’t support Wall Street reform and it’s not good politics for Obama to be friends with fat cat bankers. With this speech and signing at the Ronald Reagan building instead of at the White House, Obama is trying to appeal to a wider audience of voters, telling them this isn’t just about Wall Street, it’s also about Main Street. In his speech, Obama said, “these protections will be enforced by a new consumer watchdog with just one job: looking out for people – not big banks, not lenders, not investment houses…” Look for more of that type of populist message as the White House gears up to campaign for Democrats ahead of the critical Midterm Elections in November.
The President has to sell financial reform along with healthcare reform and the stimulus to voters, three watershed legislative achievements that the public has been lukewarm about. To win them over, Obama needs to find a way to fulfill the second half of that campaign promise from 2008, to “pursue a bold opportunity agenda that creates new jobs and grows the American economy.”