Why America Can’t Have Nice Things

Sarah Kliff seems to have tried to stay optimistic while writing this piece about the launch of the Federal Insurance Office created by the Dodd-Frank financial regulation overhaul. But the story is absurd on its face. The problem the FIO is supposed to address is that it’s absurd for the United States to have 50 separate insurance regulators when we have an integrated national insurance system. But the solution wasn’t to federalize insurance regulation, it was to create a fifty-first agency to sit atop the rest!

But: “The Federal Insurance Office does not have the authority to regulate the insurance industry; it serves more of an advisory role.” So where does that leave us? “Insurance regulation matters. Back in September 2008, it was the collapse of the massive American Insurance Group that was one of the major events that catalyzed the ensuing banking crisis.”

It’s one thing to be taken unawares by problems. But Congress seems to have looked this particular issue in the eye and specifically decided to not actually address it.