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Bailout Watchdog Lays into Wall Street

And calls for consumer-protection agency.

How can Wall Street regain Main Street’s trust? Elizabeth Warren, the TARP watchdog and Harvard law school professor, suggests one way in The Wall Street Journal: Wall Street should support the creation of an agency to protect consumers from products like credit cards and the bad mortgages it used to peddle. Warren—with the backing of President Obama—supports a single agency that could write and enforce rules. Banks, however, oppose the move, saying it will raise costs that they’ll just pass on to consumers. Warren writes: “It's a bad calculation because shareholders suffer enormously from the long-term cost of the boom-and-bust cycles that accompany a poorly regulated market. J.P. Morgan CEO Jamie Dimon recently explained this brave new world, saying that crises should be expected 'every five to seven years.' He is wrong.”