The Policy Debate vs The Policy Horse Race

Robert Waldmann

Senator Mark Warner said something about derivatives reform. I kept reading a version of what he said which seemed implausible to me. I had trouble finding a transcript or video of him speaking. In the end very beginning but I’m an idiot and didn’t notice: I found it. It confirms my suspicions.
Warner is described as saying that the conference committee will scrap the Senate’s derivatives reform provisions. In fact, he predicted that they would scrap the requirement that banks spin off derivatives trading desks, but he did not predict that they would scrap the requirements for exchange trading and a clearing system.
Important reforms vanished from the discussion, because their fate is no longer in doubt.
Much more (including links) after the jump.

I googled “Warner” “derivative”

Some articles quote Warner, so it is clear that he is talking about spinning off derivatives trading desks. They don’t mention the fact that there are other, more important, aspects of derivative-trading reform in the Senate bill.

Some don’t specify exactly what change Warner predicts and, if taken literally, falsely assert that he predicts removal of all the derivative trading reforms in the bill reported out of the Senate Agriculture committee

“Sen. Mark Warner (D-VA) appearing today MSNBC with Andrea Mitchell let the cat out of the bag that Sen. Lincoln’s derivative language will be striped [sic] out in the conference committee.”

This link sends me back to the one above

Hmm this is interesting. A very large fraction of the top relevant google hits in Warner and derivatives trading contain the same exageration and the same typo “in tact” for “intact.”

This post has a good summary but includes the typo. It might be the source

here is a search for “warner” “derivative” “in tact”

how about “warner” “senate” “derivative” “in tact”

The errors propogated over the internet. Both the typo and the important exageration. Many of the sites which copied from the Tolbert report, explicitly cite the Tolbert report so I am not accusing them of plagiary, just cut and paste journalism from a secondary source.
I also did “warner” “senate” “derivative” “intact”

This mostly sends me to an independent trove of exageration in which “derivative-reform” becomes “spinning of derivative trading desks” and nothing else. Much of the distortion is at, where they are campaigning hard against Lincoln and much inclined to claim that her derivative-reform will amount to nothing, because it will amount only to exchange trading and clearning requirements. I had considered titling this post “firedog feaver” as I think they excell at ignoring important policy issues to focus on their disagreements with conservadems. If conservadems are for it, it doesn’t exist over there.

The distorted descussion of derivative-reform is similar to the way there was more discussion of the cornhusker kickback allowing Nebraska to not pay part of the cost of medicaid expansion than of medicaid expansion itself. Quick pop quiz: How many more people will get medicaid due to health care reform (HCR) ? Who are they ? That is, who has family income below four thirds of the poverty line but no medicaid ? Where are they ? Is the geographic distribution similar to the distribution of people with income under four thirds of the poverty line ? These are important questions. One can’t have an informed opinion of HCR without answering them. They were discussed almost not at all, because there was no doubt that medicaid expansion would be part of the final bill.

The fate of medicaid expansion was not news. Also it was not a way to see who won the struggle between progressives and blue dog conservadems. So it only matters to the 16 million people who will get health insurance as a result.