A painstaking, richly detailed look at how the suite of financial reforms that followed the bank near-collapse of 2008 came to be—and nearly didn’t come to be, even as they were defanged.
We get the Congress we deserve, suggests longtime Washington Post reporter Kaiser (So Much Damn Money: The Triumph of Lobbying and the Corrosion of American Government, 2009, etc.), who observes that, beginning in about 1981 with the arrival of Reagan, politics began to trump policy even as “[e]xchanges of favor and petty corruption became congressional reflexes.” When the American financial system threatened to melt down following the collapse of the junk mortgage market and other dubious means of speculation, Congress found itself with few “legislative statesmen and women” smart enough to understand the events that were unfolding and politically astute enough to know what to do about them. Enter Barney Frank, a scrapper and one of the first openly gay U.S. representatives. The hero of Kaiser’s piece, Frank takes the lead in a scenario so threatening that even Mitch McConnell cooperated across the aisle. Though fraught with political peril, Frank saw in the financial crisis “the opportunity to rewrite the rulebook.” Over the course of Kaiser’s complex, fact-studded account, Frank is shown making a game effort at it despite hindrance, mostly from the Republican side of the House. You don’t have to be a policy wonk or economist to understand that saga, but it surely helps when encountering passages such as this: “This law divided responsibility for the firms handling derivatives contracts between the SEC and CFTC, based on the underlying securities or indices.”
Remember that old saw about making sausages and making laws—that you don’t want to know too much about either one? Kaiser disproves it with this lucid if sometimes numbing book.