"The consumer and small business groups understood that the
banking industry was
crying wolf.
This is usually a successful formula for business lobby groups when they want to thwart efforts by reformers to establish government regulations that mandate responsible corporate practices. In the past, business has cried wolf over child labor laws, environmental protections, food and drug safety mandates, workplace safety, and many other issues.
The pharmaceutical and insurance industries are now crying wolf over Obama's plan to strengthen regulations as part of health care reform.
The financial services industry has a successful track record of crying wolf.
During the Clinton and Bush years, for example, bankers and other lenders lobbied to undo consumer-friendly regulations, arguing that it would unleash industry innovation and competition. The politicians complied.
The result? Merger mania, widespread speculation, predatory lending, the current wave of foreclosures, the mortgage meltdown, and the global economic recession we're now mired in.
But like Pavlov's dog, when the bankers hear "regulation," they automatically respond: "bad for the economy" and "job killer."
So when President Obama announced his goal to bring the out-of-control credit card industry under some government regulation, the banks went on auto-pilot and started crying wolf. But this time, it didn't work. The politicians listened to public opinion instead of corporate propaganda."
