Regulatory Reform: Grab the Deodorant

When I started The Big Do-Over three months ago, the hard realities of regulatory reform seemed pleasantly distant. The Obama administration had just released seven ridiculously vague principles for financial re-regulation, amounting to little more than "yeah, yeah, we're gonna fix it."

Now so many potential reforms are kicking around that it could make a person dizzy, or in my case, slightly nauseous.

True, some of these ideas are in the death pool -- like a single bank regulator, something Barney Frank calls "not remotely possible." But that still leaves systemic risk oversight, a new derivatives regime, consumer protection for financial products, executive compensation controls (perhaps enforced by our new pay pasha), proxy access, power to wind up failed non-banks, federal oversight of the insurance business, tighter supervision of capital and risk, hedge fund registration, international coordination...gosh, I'm out of Mylanta, must stop.

Then there's the timetable. On June 17 the administration will toss a detailed proposal over the White House fence, and Mr. Frank will pick it up, run back to the Capitol and try to get some version of it through of the Financial Services Committee by the end of July. Having experienced summer in D.C., the mere thought of anyone expending that much energy makes me sweaty.

Is Washington's determined haste good or bad? No consensus on that one. Some, like Richard Posner, think all this rushing around will just lead to "more than the usual quota of dumb regulations." On the other hand, you'll find myriad quoters of the weary-eyed Rahm Emanuel, worried we'll waste this wonderful crisis if we don't act quickly. (Simon Johnson thinks we already have. Wasted it, I mean.)

The time frame seems insanely short for what Obama and Frank want to accomplish, but perhaps insanity is called for at this moment. At least it forces lobbyists to take off their famed Gucci loafers, put on running shoes, and work up a bigtime sweat.

The best case for crazy deadlines comes from Chris Baty, founder of National Novel Writing Month, in which people give themselves 30 days to write an entire 50,000 word novel from scratch: "A deadline is, simply put, optimism in its most ass-kicking form."

A lovely sentiment, and away we go.

image credit: cumberlandgallery.com (artist: Tom Pfannerstill)