Is the House-Senate financial reform deal sweeping or not? It depends which news organization you go to. The Miami Herald calls it a “sweeping revamp of financial regulation” and notes that Obama called it the “toughest financial reforms” since the Great Depression. But an early Washington Post headline specifically said the deal “leaves Wall Street intact.” (A later headline said “Bill does not break up the nation’s largest firms; ‘Volcker rule’ on derivatives was softened in response to lobbying from banks.”)
Are we talking about the same House-Senate agreement? One news organization makes it sound earth-shaking. The other makes it sound like small potatoes.
How it is characterized is important. Opinion polls show that the public distrusts Wall Street (although they keep gambling at that casino), so how people feel about the reform package depends on whether they think it goes far enough to curb the worst excesses of greed and prevent another Great Recession. Public opinion will put pressure on representatives and senators, who are scheduled to vote on the final deal next week, and that pressure will help determine whether it passes and by how many votes.
That’s where news media come in. They need to be careful to characterize precisely and contextually what the agreement actually does and does not do. How much does it tighten regulations? Does it leave the banks as powerful as ever? After the Depression, truly sweeping reforms were enacted (until they were cast aside by deregulation). How does this one compare, and why is it so limited? These are some of the questions that need to be answered so the public can make up its mind whether this is the reform we really need.