Liberals keep voicing amazement that the debate over financial reform is proceeding much more quickly and more smoothly than the debate over health care. The reason is simple: Health care was a clash of two competing governing philosophies, whereas most everyone agrees that something went seriously awry with our financial system in the first decade of the twenty-first century. The negotiations in the Senate are a good-faith attempt to work out the differences. The impending cloture vote is a political move by the Democrats to have the Republicans on record as "opposing financial reform," even though everybody assumes this bill will pass soon with bipartisan support.

If you doubt the existence of a right-left mindmeld, read Robert Samuelson or Hernando De Soto, then read Paul Krugman or Robert Reich. On the major issues -- resolution authority, derivatives trading -- the differences are relatively minor. These writers understand that financial reform won't solve all our problems. But they also understand that the incentives need to be changed in order to protect taxpayers from future crises.

The great mystery to me is why Republicans are passing up the chance to argue that this bill doesn't go far enough. Why not embrace the Brown-Kaufman amendment to break up the banks, in order to show that the GOP stands against all massive agglomerations of power, whether in Washington or on Wall Street? The Republicans could raise Cain about the ratings agencies, who gave good scores to bad mortgages but whose oligopoly is not addressed in the Dodd bill. And they might ask why the Democrats want to end Too Big to Fail for the banks, but not for Fannie, Freddie, and GM.

Arnold Kling offers his ideal financial reform bill here. Call the Democrats' bet. Then raise it.

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