Healthcare reform versus financial reform

My take on healthcare reform versus financial reform: I understood the goals of the final healthcare reform bill,  but I’m not sure what problem this piece of financial reform legislation  actually addresses.

1)  The healthcare reform bill had a difficult process, for sure,  but  I understood the goals of the final bill.  So when someone asked, I could explain it clearly:  this piece of legislation would definitely broaden coverage in a variety of ways.  However, it would not cut costs. That would be left to the next healthcare reform bill, several years down the road (and likely when the Republicans were in power).

I didn’t have a problem with the healthcare reform bill only doing part of the job–healthcare is a vast area, there’s lots of competing interests who really care,  and we were stuck with political gridlock.  I think Obama can justly be proud of healthcare reform.

2) Financial reform, as embodied in the current legislation, makes me scratch my head.  The Consumer Financial Protection Bureau makes a lot of sense. But the rest of the provisions? In his latest piece, my friend Allan Sloan puts it better than I can:

…with a rare exception or two, this 2,000-page bill nibbles at the toes of the problems that brought us the worldwide financial meltdown. It doesn’t go for the throat — its sponsors just pretend that it does.

And he goes on to say.

Sure, there are some useful things other than consumer protection in Dodd-Frank. But assuming the bill becomes law in its current form, we’ll have the same systemic problem we had when the meltdown started in June 2007: too many institutions that are too big to fail, and a perilously opaque financial system that will freeze if problems recur.

My view exactly.


  1. The fight of two evils, which one will bring more pain?

  2. Mike Reardon says:

    I think its allowing failure of derivatives and other exotic financial tweaks within hedge funds that can be resolved without major public bank failures is it. Its forcing them out of the banks complete direct liability and finding balance on resale between trash and real assets. I think resolution is all they really want a road map on.

  3. The financial reform law is oriented to protecting consumers, which is good, and cleaning up future spills, which is also good, but what about the very existence of the institutions deemed too big to fail? That is, what about their market/political power? The law leaves them to widen the loopholes.


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