Academic

The Democrats lost the Senate race in Massachusetts tonight. I'm sure the armchair political quarterbacks will be out in force tomorrow in the Beltway discussing the implications for health care reform.  (One of the things I miss the least about D.C.)  What about the implications for financial reform?

I was surprised that the Obama Administration decided to focus on health care first rather than get some quick victories in financial reform first, then use the political capital to tackle health care.  It is hard to imagine the Tea Party defending credit rating agencies and investment banks.  Now whether quick, populist victories lead to sensible policy reforms is another matter.

That might be the problem with the election results tonight.  We can expect both parties to begin appealing to populist sentiments, which will probably lead to financial reform proposals that may be politically appealing, but do little to address the root causes of the crisis.

Here is a really cynical thought: does Congress have an incentive to drag out health care and financial reform to get more lobbyist contributions?