So SEC Chairman Bill Donaldson is on the hot seat for being too “activist,” i.e., trying to do his job. According to today’s Wall Street Journal, some big business groups, including the Business Roundtable and the U.S. Chamber of Commerce, are trying to get Donaldson kicked out and replaced with someone a lot more business-friendly.
It’s the sad, but normal, course of events: business scandals left unchecked grow to a critical point. Horrified, everyone hastily approves regulation, then, a few years in, they begin to chafe under the constraints and quickly dismantle the whole thing. The irony here is that Donaldson, who is a good friend of the Bushes, has been more frequently criticized for moving slowly than for cleaning up the mess he inherited when he took over the job. Next to Eliot Spitzer, New York’s crusading Attorney General who has innovatively used the threat of the law to scare more reforms into the system than we’ve seen in the last several decades, Donaldson looks like a bureaucrat, if a well-intentioned one.
Although it probably shouldn’t be, the head of the Securities and Exchange Commission is a political appointment, and a lot of the pro-business groups that helped raise money for President Bush are now ready to collect their reward. So watch what happens to Donaldson carefully. If he goes, it might be time to party like it’s 1999.