Scott Brown's liberal fig leaf

Thursday Ocotober 4, 2012

One cannot blame Scott Brown, a fairly conservative guy in a mostly liberal state, for trying to trick himself out in liberal garb in hopes of getting re-elected to the Senate. I leave to others the dissection of his Blunt Amendment vote while claiming to champion women. My subject is financial regulation and the securities market.

Mr. Brown's fig leaf here was his vote in favor of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Thus covered, he has claimed to be moderate and thoughtful on the subject. But a closer look tells a much different story.

His symbolic vote behind him, Brown has voted against every attempt to put real regulation and enforcement power into Dodd-Frank and its Consumer Financial Protection Bureau, Elizabeth Warren's landmark contribution to it. He has supported every effort by the banks to water it down and has been liberally rewarded by them for his efforts. He is receiving Wall Street contributions not for being a regular guy and a moderate, but for being one of their best friends in the Senate.

Warren believes that honest markets require effective regulation and reasonable oversight. After 30 years in Wall Street, so do I, and I have no doubts about it. Even more than wellwritten regulations, markets need to be regulated by people who believe in that principle and those regulations.

The market catastrophe of 2008 was attributable to at least three related matters; a misguided conviction that markets can regulate themselves quite well; a resistance to subjecting new instruments and practices to any regulation; and an institutional determination not to enforce existing regulations. Scott Brown has already demonstrated that he will support those who wish to reinstate those tendencies.

Elizabeth Warren personifies the view that good markets require good regulations and good regulators. (Think "good fences make good neighbors.") She will be a force for good in that direction. The U.S. Senate needs her and more like her.



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