The Strange Bedfellows of #EndingTBTF
By John Heltman
WASHINGTON — Politicians and pundits representing the left and the right largely agree that despite various reforms put in place during the past decade, the biggest U.S. banks are still “too big to fail.” In many ways, that view echoes the anti-establishment sentiment seen in the surprisingly successful insurgent presidential candidacies of Donald Trump and Bernie Sanders. Those who have faith that the system works see the Dodd-Frank Act as a success while those who are alienated from politics-as-usual feel differently. “If you feel like the regulators largely do a pretty good job, then Dodd-Frank makes a lot of sense,” said Mark Calabria, director of financial regulation studies at the Cato Institute. “That kind of distrust of the status quo, that kind of distrust of the policymakers that are there is certainly common and is almost a defining characteristic of both progressives and libertarians.” That critical view of “too big to fail” is hardly relegated to the fringes of either party. Karen Shaw Petrou, managing partner of Federal Financial Analytics, said the unity on the single issue resembles the early-20th-century coalition of progressivism of Theodore Roosevelt and the prairie populism of William Jennings Bryan — a mutual distrust of the moneyed class and the system in which they operate. “The populist coalition — progressives on the one side and tea party people on the other — they agree with each other on one really important thing: ‘too big to fail,’ ” Petrou said. “It’s one of the reasons why the TBTF arguments are so persistent, and ultimately so meaningful.”