Ritholtz: Why Congress might pass 'TBTF' bill

Simplicity, broad ideological support, splitting the banking lobby, and FDIC support -- these are the four reasons Barry Ritholtz gives why Brown-Vitter's "TBTF" bill has a good chance of becoming law.

Here's how Ritholtz sums it up:

The idea that two senators from opposite sides of the ideological spectrum can find common ground to attack a problem with a simple solution is novel in the Senate these days. If Brown and Vitter manage to end the subsidies to banks deemed “too big to fail,” they will have accomplished more than “merely” preventing the next financial crisis. They will have helped to create a blueprint for how to get things done in an era of partisan strife.

That is a worthy goal all Americans should be grateful for.

The truth is, complex bills are not a bad thing, per se, and elegant solutions cannot be found for all policy problems.  Complex bills are bad when they are too abstruse for the public to care about, and then the armies of paid lobbyists who definitely do care march in and skewer and mangle them with loopholes in the rules-making process, which is what has been going on with Dodd-Frank for about two years.  Big banks have been making the law more complex, then turning around and complaining about how complex it is... and wouldn't it just be easier to scrap it altogether, they have the gall to ask us?  

Trying to find a similarly simple, elegant solution to, say, immigration reform would probably be impossible.  Ditto the budget.  Or health care.  A carbon tax is another one of those elegant solutions that would unleash a virtuous cascade of market-driven responses, but it fails Ritholtz's bipartisan test, because conservatives reject any new taxes out of hand, and there is no opposing big industry lobby in favor of it.  

You can try to come up with your own examples.  Talk amongst yourselves....

Can two senators end ‘too big to fail’?

By Barry Ritholtz

May 12, 2013 | Washington Post

URL: http://www.washingtonpost.com/business/can-two-senators-end-too-big-to-fail/2013/05/09/aa01cc70-b5dc-11e2-b94c-b684dda07add_story.html

Rosenberg: Political 'moderation' is killing us

Rosenberg succinctly explains the destructive and yet politically successful behavior of today's Congressional Republicans:

If unreasonable positions ensure that the other side gets equal blame in the centrist's scorekeeping and resulting media coverage, then they are inherently "can't lose" positions. This provides a basic floor which biases the entire process against being reasonable.

If some sort of action is eventually necessary (as it is with budget issues, and most other governmental questions as well), then the unreasonable side - which by definition cares less (perhaps not at all) about real-world consequences - has an increasing advantage the longer that the issue remains unresolved, thus further motivating them to remain unreasonable. If they start at 50 percent (equal blame), things only get better for them over time, as the blame burden remains constant, but the cost pressure to do something rises much more accurately on the reasonable side.

In the process, argues Rosenberg, politically viable but unworkable political proposals get conflated with politically "serious," i.e. reasonable, ideas -- first among the MSM and with Washington elite, then among the wider public:

So why is the discussion dominated by a non-solution while a real solution can't even be discussed? It's because the "politically viable" sense of serious totally dominates over the "pragmatically effective" sense of the word, and because what is politically viable is circularly defined: extremist Republican non-solutions are politically viable because Republicans adamantly insist that they are, no matter how laughable they may be - and centrist bipartisan ideologues routinely and reliably endorse their false claims as matters of fact when they do so. The fact that they aren't even remotely serious, in the problem-solving sense, never even enters the picture.

And here Rosenberg sounds almost like Rush Limbaugh, who rejects bi-partisanship as an inherent political virtue:

Problem-solving and argument-winning have become two entirely antagonistic activities, and "moderate" "centrist" "bipartisanship" has become the creation of such profound confusion that the voting public won't catch on until it's far, far too late.

Today's Republicans are wrong and unreasonable. Any "middle ground" between their ideas -- the Paul Ryan budget, for example -- and reasonable progressive ideas is still wrong.  We cannot afford to call "less wrong" a job well done. We have big problems and we must be right!

The US on suicide watch: Death by 'moderation'

By Paul Rosenberg

March 22, 2013 | Aljazeera

URL: http://www.aljazeera.com/indepth/opinion/2013/03/2013320184843513125.html