Even before the crisis, polls showed that the public overwhelmingly favors regulation to protect ordinary citizens from shoddy products and sharp practices. The spectacle of failure being rewarded during the financial crisis while the rest of us suffered in the resulting economic downdraft has led even people who are cautious about regulation in goods markets to acknowledge that finance is different and needs vigilant oversight.
The Massachusetts Senate race provides a reminder. Scott Brown has been playing up the bankster caricature of Elizabeth Warren a a power-mad, business-hating Commie. If anyone bothered checking her calendar during her time as a consultant to the Treasury launching the CFPB, it shows that Warren bent over backwards to meet with bankers and solicit input. And the idea that the sort of regulation that Warren favors is bad for the public (or anyone other than overreaching businessmen) is a stretch (remember, Warren was once a Republican). And of course, this sort of attack serves to reinforce the canard that regulation is bad (as opposed to “bad regulation is bad” just as “bad Scotch is bad”)
The fact that Warren took her job as the head of the Congressional Oversight Panel seriously produced a huge win for the public. As Matt Stoller recounts in an article in Salon , the COP under Warren incurred $10.7 million in expenses. One action alone, that of finding that Treasury was letting banks buy back their TARP warrants on the cheap, saved taxpayers over $1 billion. That isn’t Warren campaign PR; that’s the conclusion of a new paper by Lucas Puente, a Stanford political scientist, published in PS. Political Science and Politics. Similarly, while Neil Barofsky’s role at SIGTARP was circumscribed (he could only pursue frauds that were directly related to TARP), he separately saved over a half a