Simon Johnson and John Parsons chide Mary Miller April 26, 2013 at 1:11 pm

In a speech on last week Mary Miller, Treasury under secretary for domestic finance, made the case that the Dodd-Frank reform legislation has substantially ended the problem of too-big-to-fail financial institutions. Johnson and Parsons don’t agree, writing in the NYT:

Ms. Miller’s speech is completely unconvincing on the substance of the points that she is trying to make. Dodd-Frank alone will not end too big to fail.

It makes sense that senior Treasury officials should want to put Dodd-Frank into effect. But it is disconcerting when they are unable to confront the market and political realities of too-big-to-fail banks. Any such level of denial will not serve us well.

The detailed analysis is worth going through and, broadly, convincing. It does seem interestingly as if the argument is lining up as some politicians, most independent commentators and much of the voting public saying more needs to be done, with the FED and the big banks against. That isn’t a common side selection, and it will be interesting to see how it plays out.

One Response to “Simon Johnson and John Parsons chide Mary Miller”

  1. I had not noticed these two writing together before. But at the bottom of the piece, I don’t see any info about who they are representing. (I know the academic affiliations.)

    It’s interesting because they are the two who frequently participate in regulatory discussions that I feel are clearly pushing certain agendas and tailoring arguments for effective persuasion to their desired points. They love to be perceived as impartial and as commenting on the merits, but that’s really not at all what they are doing.

    On some level it’s fine, because there are plenty of interested parties making cases and explaining how they see things, so they fit right in with that crowd. But usually you know the affiliation of such parties and can put the points in context. Who are these guys consulting for?