Academic

The Obama-Biden Ticket and Business Reform--Skeel

By David Skeel and Bill Stuntz

Most of the commentary on Obama's decision to tap Senator Joseph Biden as his V.P. pick has focused on the foreign policy expertise that Biden brings to the ticket. But I think the implications for some of Obama's business reform proposals are at least as important.

Obama has suggested that he will support more federal regulation of corporations. And he has signaled his support for bankruptcy reform that would allow borrowers to write down the value of their mortgages in bankruptcy. He also has sharply criticized the major bankruptcy reforms passed in 2005, which made bankruptcy more difficult for consumer debtors.

Biden has been on the other side of most of these issues.

As a senator from Delaware, he fiercely protected Delaware's interest in state rather than federal regulation of corporate law. In bankruptcy, he was a leading Democratic advocate of the 2005 bankruptcy reforms, which were viewed by many as a valentine to the credit card industry, much of which is centered in Delaware. (He did vote in favor of the mortgage write down proposal this spring, but it was a fairly meaningless vote because it was clear the proposal wasn't going anywhere).

Whose views would be reflected in an Obama presidency? Although Biden can certainly be expected to adjust his perspective to more closely fit Obama's current positions in business reforms, his voice also could dampen Obama's enthusiasm for reform during an Obama presidency.

But it's also possibility that Biden's presence on the ticket could actually make reform more rather than less likely. As a longtime member of the Judiciary Committee, Biden has almost single-handedly thwarted a number of reform proposals that would have interfered with Delaware's prominence as a popular destination for corporate bankruptcy filings. He has been similarly effective in protecting Delaware's other corporate interests. With Biden out of the Senate and no longer principally focused on Delaware voters, that obstacle might be gone. Which could mean more federal intervention in these areas in an Obama presidency.

Full post as published by Less than the Least on August 23, 2008 (boomark / email).