It was quite interesting listening to the venerable Maxine Waters, Chairwoman of the House Financial Services Committee talk fintech on Fintech Beat–and the conversation got me thinking about how legislators make decisions as compared to regulators. And how those subtle differences aren’t always appreciated, or understood, even by political insiders and wonks.

It’s worth always recalling that regulators, whatever their party, are permitted to only act within their specific mandate—provided by operations of legislative decree. And this can, of course, lead to more technocratic and narrow (some would say tunnel visioned, others, expert) decisionmaking. Legislators, by contrast, have to not only wrestle with the specific mandates of regulators, but also think about other larger concerns: unemployment, economic growth, international competitiveness, national security, fairness and even social justice. They are, by occupation, generalists, even as they occupy varying committee seats and responsibilities.

This difference in power and responsibility can lead to conflicts, some of course galvanized by politics, but I think that the inevitable frictions are not only healthy, but essential.  They not only operate as checks and balances between branches of government, but also lead to a more legitimate, and informed, policymaking process.  Specialists may take the lead in action, but face oversight by generalists concerned with the bigger picture—and directly accountable to the people affected by regulatory decisions.  It may make the American system a little less efficient than some others, but when you sit back and think about it, it has its own unique advantages, even in today’s hotly contested political climate.

Comments are closed.