There's a lot riding on reform of the financial industry, but the administration's plans to overhaul financial regulation carries the seeds of its own destruction, writes Thomas Frank. Taking oversight away from the present confusing array of agencies and making the Federal Reserve One Big Regulator means that when the administration changes, regulation could end up in the deregulation-happy hands of someone like Alan Greenspan, Frank writes in the Wall Street Journal.
Consensus "made a god" of Greenspan during his 1987 to 2006 reign at the Fed, Frank writes, and his "deregulatory faith" has never really been shaken despite the chaos it spawned. Until a new consensus is forged around the idea that more regulation isn't, by its very nature, a bad thing, "the best-designed regulatory institution in the world will go awry" Frank writes. "It will merely become a fat target for the next bunch of 'market based' politicians to come down the pike."