Jacob Hacker and Paul Pierson correctly observe that organized labor was integral to throwing together a political coalition for financial regulatory reform:
When the financial crisis hit in 2008, unions were a primary voice urging reform. In the face of aggressive lobbying by the health-care and financial industries, labor sunk a huge share of its limited resources into advocacy groups pushing for health-care reform and greater financial regulation.
This brings to mind the phenomenon that’s sort of the obverse of union decline — the extraordinary level of solidarity manifested by the corporate executive class in the United States of America. There are plenty of individual firms that benefit from this or that public sector spending stream, but essentially all business organizations are solidly united in opposition to essentially all possible ways to enhance government revenue. On financial reform, it’s not merely that the big banks opposed the Dodd-Frank bill, but there was absolutely no counter-lobbying from firms in the non-financial economy in favor of it. And that’s not to say that Dodd-Frank was the greatest thing since sliced brad, but there were no proposals coming out of corporate America for any financial regulatory overhaul of any kind. Yet clearly something went badly awry in 2007–2008. But the business class united behind TARP, then united to oppose any regulatory reforms, and is now united against any return to pre-Bush levels of taxation on rich people.
We’re so accustomed to this kind of thing that we take it for granted, but I don’t think it’s obvious ex ante that business lobbying should be such a simultaneously solidaristic and nihilistic venture. Presumably most American firms would, in fact, benefit from the existence of a sensible and sustainable financial regulatory scheme. But there’s no lobbying activity whatsoever dedicated to creating it.