RHETORIC AND REALITY
One irony of the two camps’ diametric positions is that, in practice, Obama has often tried hard to appease the energy industry and Wall Street, while Romney has sought to meet “greens” and other progressives in the middle. On energy, Obama has been, “pretty aggressive about trying to develop natural resources. He resumed drilling in the Gulf [of Mexico] but with higher environmental standards,” says one campaign aide who spoke on condition of anonymity. The president has spoken of promoting an “energy revolution” around natural gas, and Obama directed the Interior Department to allow hydraulic fracturing, or fracking, under new rules that are not very different from a law that conservative Republican Gov. John Kasich just signed in Ohio. Meanwhile, Romney, as governor, imposed a new set of regulations on health care—the template for Obama’s reform plan—and for a time supported regulation of greenhouse-gas emissions.
Certainly Dodd-Frank and the Affordable Care Act are not terribly good examples of smart regulation. Many observers on both sides of the aisle note that Dodd-Frank’s 250-plus rules have created endless loopholes to exploit and opportunities for delay. Rather than establishing simple rules to break up banks or requiring set amounts of capital, Dodd-Frank gave a slew of executive branch committees and agencies responsibility for determining those yet-to-be-decided levels and for monitoring them. The act also did not fix the too-big-to-fail problem beyond a host of as-yet-unwritten “living wills” that were supposed to tell regulators how to liquidate the banks in a crisis. And in a development that has alarmed even some conservatives, the largest surviving banks—mainly Goldman, Citi, JPMorgan Chase, Bank of America, Morgan Stanley, and Wells Fargo—are growing bigger and even more global relative to the rest of the industry.
Romney has said little more than that a new law is needed, one that is much simpler, more predictable and efficient, and less dependent on “unaccountable” agencies such as the new Consumer Financial Protection Bureau. He also concedes that “some of the concepts in Dodd-Frank have a place,” particularly greater transparency for “interbank relationships” and enhanced capital requirements.
As with Dodd-Frank, the administration left it to Congress to hash over the 955-page Affordable Care Act, and the outcome was similar: a complex set of incentives that, while they are slowly changing the health care industry, remain opaque and of questionable effectiveness—that is, if the Supreme Court doesn’t overturn the law in coming weeks. At a press breakfast in April, outgoing Sen. Jim Webb, D-Va., blamed Obama for playing too passive a role, just as he did during Dodd-Frank (when the president embraced the “Volcker Rule” barring banks from hedge-fund-type trading only after a year of hesitation). “If you were going to do something of this magnitude, you have to do it with some clarity, with a clear set of objectives from the White House,” Webb said. What happened in the end, the senator said, “was five different congressional committees voted out their version of health care reform, and so you had 7,000 pages of contradictory information. Everybody got confused.”
The Obama administration concedes that Congress—and especially the GOP-controlled House—has often muddied, even held back, its regulatory revolution. But it says it still has plenty of good battles to fight, and that Sunstein is on the attack. How much longer Obama will have to implement his revolution is another matter.