Consumer protection all over again?
Debate is already raging over the Consumer Financial Protection Agency just proposed as part of the Obama Administration’s plans for regulating the financial system. Yesterday afternoon, the Los Angeles Times blog Money & Co. highlighted representative arguments of those battling on each side of the issue:
“Providing this much power to one agency is truly frightening as they will get to set the rules and pick the winners/losers for the financial sector,” the LAT quotes Andrew Busch, a markets strategist at BMO Capital Markets in Chicago, as writing.
The California Public Interest Research Group, on the other hand, argued that “the CFPA would ensure the safety, fairness and sustainability of credit.… The president’s proposal addresses a glaring oversight in the regulatory structure by creating an agency designed to monitor the safety of financial products from the viewpoint of the consumer.”
As Larry Glickman, author of the forthcoming Buying Power: A History of Consumer Activism in America, might point out, this isn’t the first time Americans have argued at high pitch over regulations designed to protect consumers. In Buying Power, he tells the story of the decade-long—and ultimately successful—campaign that conservatives launched in the late 1960s against proposed legislation to create a Consumer Protection Agency.
“Although the fight over the CPA is little remembered today,” Glickman writes, “it was front page news throughout much of the 1960s and 1970s, and it sheds light on both the decline of Great Society liberalism and the rise of a new and ascendant style of conservatism.”
He concludes, however, that though “Great Society liberalism was defeated in large measure because of its association with consumerism (and visa versa), there is reason to believe that [a] new wave of consumer activism may contribute to an emergent liberalism, one which uses the nexus of the market and the internet to remind people that consumption is a vital component of citizenship in a global society.”
Indeed, especially in the current economic climate—as Glickman pointed out recently in the New York Times—Americans are once again aware of the importance of consumer demand.