Posted by: Ben Cole
The Internet — and Wall Street — was abuzz this past week after the reelection of President Barack Obama and the election of newcomer Elizabeth Warren as the U.S. Senator in Massachusetts. Wall Street, in all likelihood, was hoping that Mitt Romney would unseat Obama -– as well as dismantle the Dodd-Frank Act regulations and cut back financial reform. Warren has also been outspoken in her disdain for Wall Street’s treatment of consumers, and can now cast financial regulation votes from her Senate seat.
Several bloggers and major newspapers speculated that Obama would target financial reform in his second term. The Washington Post stated that with the election behind him, Obama no longer needs to cater to special interests and can be more tenacious in attacking changes in the financial system. Bloomberg Businessweek reported that Warren’s Senate seat gives her “powerful tools” in the debate over whether and how to regulate the finance industry.
Some, however, remain skeptical that the new regime will have much of an influence on financial reform, especially when it comes to Dodd-Frank regulations. After all, the U.S. is still way behind in implementing most parts of the law. Only a third of the rules have been finalized, noted ProPublica reporter Jesse Eisinger in an article published in the New York Times online, and Eisinger is not sure Obama’s reelection will speed the process.
“The core problems with the financial system and its regulators are deeper than personnel and sadly impervious to which party occupies the White House,” Eisinger wrote. “They are bipartisan and structural.”
The question is: How much of the anti-Wall Street campaign talk was just that — campaign talk? After spouting “sticking up for the little guy” rhetoric on the campaign trails, both Warren and Obama may scale back to more moderate viewpoints after the election. It’s also going to take more than two people to overhaul the financial system — it requires a sea change in the political stance toward Wall Street, and the attitudes of Wall Streeters themselves.
What do you think? Will the 2012 election, particularly the victories by Obama and Warren, have an impact on Dodd-Frank regulations and financial reform? Or will it be business as usual on Wall Street?