Obama’s Consumer Financial-Protection Trump Card: Simon Johnson

By Simon Johnson - Jan 8, 2012
Bloomberg

The biggest news for the Republican presidential-nomination race last week wasn’t the outcome of the Iowa caucuses but the recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau.

Unless you think Rick Santorum can scale up in record time to run a national campaign, the Iowa results just confirmed what we already knew: Mitt Romney is likely to face President Barack Obama in November. The Cordray appointment indicates that the president sees things the same way, and has decided to focus the fight on one of Romney’s vulnerabilities: his views on the financial sector.

The president, of course, can’t make an issue out of too- big-to-fail banks because his administration has helped to solidify their grip on the financial system. The 2010 Dodd-Frank financial-reform law effectively failed to limit lenders’ size, freeing the biggest institutions to grow ever larger. Mega-banks will be harder to deal with, both as healthy institutions and if they run into financial trouble.

(More here.)