Financial Reform

Krugman: Kill the Bill

No legislation better than watered-down version.

With Senate Finance Committee Chairman Chris Dodd weakening financial-regulatory reform in hopes of attracting Republican votes, Nobel Prize-winning economist and New York Times columnist Paul Krugman writes, “The question now seems to be whether we’ll get a watered-down bill or no bill at all. And I hate to say this, but the second option is starting to look preferable.” Krugman argues that “A weak financial reform … wouldn’t be tested until the next big crisis. All it would do is create a false sense of security and a fig leaf for politicians opposed to any serious action — then fail in the clinch.” He ends with a call to arms: “[I]t’s time to draw a line in the sand. No reform, coupled with a campaign to name and shame the people responsible, is better than a cosmetic reform that just covers up failure to act.”