Why Elizabeth Warren Could Be Good For Honest Businesses

As it appears increasingly unlikely that Elizabeth Warren will be the permanent head of the new Consumer Financial Protection Bureau, we can reflect on how many of her opponents are actually shooting themselves (and the American people) in the foot.

…over the past century or so, new regulatory initiatives have inevitably been greeted with predictions of doom from the very businesses they eventually helped. Meatpackers hated the Meat Inspection Act of 1906, but it rescued the industry from the aftereffects of the publication of “The Jungle.” Wall Street said that the creation of the S.E.C. would demolish stock trading, but the commission helped make the U.S. the world’s most liquid and trusted stock market. And bankers thought that the F.D.I.C. would sabotage their industry, but it transformed it by effectively ending bank runs. History suggests that business doesn’t always know what’s good for it.

More accurately, those businesses that are looking to mislead consumers will be better off if Warren is defeated (although she has already been instrumental in setting the agency up which will help). The businesses that rely upon honest disclosure and an economy that stays solvent will be worse off. And anyone who thinks a free market can function without someone setting the rules for a fair playing field, will be in for an ugly reminder of what happened over the past decade.