From the Wall Street Journal, two important and related stories.
First, Obama is fleeing from the tougher financial regulation and oversight on which he campaigned.
The Obama administration is backing away from seeking a major reduction in the number of agencies overseeing financial markets, people familiar with the matter say, suggesting that the current alphabet-soup of regulators will remain mostly intact. Administration officials had suggested they might push for major regulatory consolidation in the wake of the financial crisis. But now they expect to call for most existing agencies to have broader powers to limit risk-taking by financial institutions, say the people familiar with the planning.
And, banks are paying back their TAARP money. That's a good thing in the abstract, and even in some specific ways. They are doing so, however, among other reasons, to avoid regulations like executive pay caps, etc. It all makes sense from Obama's perspective: He threatened them, they're paying back their loans, indicating that they can stand on their own, but also allowing them to continue to set their own rules regarding compensation. Great way to stave off a crisis. Bad way to resolve, cure, or prevent one. Thoughts?