The government shield

Once Barack Obama was through with the name-checks at his Wall Street speech, the applause lines were few and far between. In fact, there was just one --

First, we're proposing new rules to protect consumers and a new Consumer Financial Protection Agency to enforce those rules. (Applause.)

So why, despite occasional noises to the contrary, would the financial industry support a consumer financial protection agency? There are simple, but cynical, explanations. For one thing, they may be confident that they can capture it once it's set up. But let's suppose that's not the case and there really is an agency can issue stark rulings on financial products. Then we're into the analogy with the greatest legal gift from governments to tobacco companies: the health warning on a pack of cigarettes. Because once that's there, the consumer excuse about not realizing the costs of smoking is gone.

When there's a consumer agency certifying financial products, the companies are off the hook for selling them.