Obama's Financial Reform: All Talk, No Action

It's just so predictable: use the anniversary of Lehman's bankruptcy to talk about regulatory reform. President Obama's Financial Rescue and Reform speech today at Federal Hall (a beautiful building downtown, that's worth a visit if you are in the neighborhood) was laden with some harsh words: "there are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them."


As my mother likes to say, talk is cheap. There are three distinct trends that belie the President's "tough" stance on financial reform:

1. President Obama has made health care the number one priority, eclipsing financial reform
2. The economic and stock market recovery makes people lazy. This is especially true for lawmakers, who all of the sudden remembered how much money financial firms pour into their coffers.
3. Inter-regulatory turf battles are downright ugly, although who among us does not want to see Sheila Bair take down Tim Geithner?

Despite the numerous financial reform proposals that are floating around Washington, very little progress has been made on any substantive measures. It was well and good that the President talked the talk, but we're waiting for him to walk the walk and put regulatory reform near the top of his priorities. Until then, the world will keep wondering if financial reform is DOA.

Image by Flickr User Davidography, CC 2.0