In examining President Obama's pledge to (finally) take on financial services reform, and Paul Volcker's prescription for ending too-big-to-fail, Peter Boone and Simon Johnson, writing in The New Republic, take note of something that until now has mostly escaped the notice of us financial commentators: "Market Power." Consider:
But market power—that is, the ability to impose cartel pricing—is just one facet of the financial system in which we're all so literally invested:
As Boone and Johnson conclude, "the Volcker rules are not the answer." What is then?
It's hard to read the piece and conclude the answer isn't, at least, a broad-based popular movement against the financial sophistry that has long passed for innovation. Don't ask me how such a movement could come about though. I've been waiting—and calling—for it since 1988, and no sign yet.