LONDON — Champagne cork headlines were popping all over the United States the week before last when the Senate passed financial reform measures variously described as "a sweeping overhaul of the big banks" . . . "the biggest changes for generations" . . . "the greatest cleanup since the Great Depression" . . . "leaving few corners of the financial industry untouched."
Such headlines should make you worry about the critical faculties of the media and their gullibility to spin from Wall Street and the White House. The truth is that this piece of legislation — which President Barack Obama signed into law Wednesday — is nonvintage, with equal parts of vinegar and bubbles.
The legislation fails to address the key question of financial institutions that are "too big to fail." It also puts too much power into the hands of Treasury Secretary Timothy Geithner, who has not kept a proper distance from Wall Street and has put too much faith in the ability of regulators to pre-empt the next crisis.