Justin takes a look at Obama’s economics speech — which emphasized “core regulatory principles” over concrete proposals — and scratches his chin about what he sees:
The reality is that it’s incredibly hard for anybody, be they regulator or CEO, to stand in the way of a financial innovation that’s churning out big profits. The only thing that can stand in the way are outright bans on innovation of the sort that emanated from Congress and regulators during and after the Great Depression. But Obama himself says in his speech that he doesn’t want to go back to that kind of regulation.
This isn’t a criticism of Obama. It’s the basic quandary at the heart of all today’s discussions about fixing financial regulation. What we dream of is a wise, disinterested regulator that somehow combines a light touch with an iron fist. And we’re never going to get that.
