Remember the Dodd-Frank Act? No? Kinda? Maybe a little? For such an important bill, doncha’ think it’s odd that our President doesn’t talk about it, hardly at all? Hmmm?
The reason Obama doesn’t bring it up more is because it’s a lousy and destructive law, and the more folks know about it, the worse he looks to them. So with that in mind, …let’s make sure more people know about it today, shall we?
When the Dodd-Frank Act was passed in 2010, the behemoth 2,300 page bill, with its 400 new “rules”, we were told that it would:
- Strengthen the economy.
- Stabilize the housing market.
- End the threat of insolvency for those institutions that were “Too BIG to Fail”.
- Streamline the regulatory process.
One year later, it got its first report card: A resounding “F” in all areas …but one. In that area, it was given the highest mark possible. That area? The only one that didn’t get a failing grade?
“Growing the SIZE and COST of GOVERNMENT.”
You’re stunned, I can tell.
Spencer Bachus was quoted at the time:
“The Dodd-Frank Act is a failure and a massive roadblock to our economic recovery. Its 400 regulatory mandates create an atmosphere of uncertainty in which innovators and job creators can’t put their ideas and capital to work.”
Anyone SEEN the REAL unemployment numbers lately? TWENTY THREE MILLION (that’s 23,000,000) of our fellow Americans UNABLE to find work, or have simply GIVEN UP.
At the time, the report on Dodd-Frank found that:
- The overall budget cost though fiscal year 2012: $1,251,578,000. (That’s over a BILLION, with a “B”….)
- Total number of GOVERNMENT positions created: 2,849
- Annual labor hours required to comply with just a fraction of the bill? 2,260,631.
Combine this with Secretary Geithner’s acknowledgement that Dodd-Frank does NOTHING to end “too big to fail”, and the fact that the problems at Fannie and Freddie FAILED to be addressed by the bill, and you have one great, big, fat, stupid, “Loser” piece of legislation.
All of that was the assessment of Dodd-Frank at the one year mark. A little over 2 years past the enactment of the “Federal Reserve Empowerment Law”, the report card looks the same as it did a year ago. Its only successes: Increased bureaucracy, increased costs to the taxpayer.
At its fulfillment, Dodd-Frank will create AT LEAST 17 new bureaucracies with the power to regulate small businesses, including perhaps the scariest one of all: the Consumer Financial Protection Bureau.
The biggest failure of Dodd-Frank is that it does NOTHING to set the proper incentives for institutions to make prudent decisions with regard to lending. In a free-market environment, those who may profit from a venture are ALSO the ones who will pay the price for their failures. Under Dodd-Frank, this is turned upside down, and the moral hazard of banks being rewarded for successes, but covered by the TAXPAYERS for their failures, is created.
Anyone want to venture a guess at the role Fannie Mae and Freddie Mac played in the financial crisis leading up to Dodd-Frank and its “miraculous cures”? Even its staunchest supporters would tell you it was a major contributor. Yet, Dodd-Frank did little or nothing to put an end to these classic examples of crony capitalism. Economics Professor William Anderson stated:
“In a free market, there would be nothing like these entities (GSE’s, or Government Sponsored Enterprise), or if something like them existed, there would be no guarantee that losses would be covered by taxpayers.”
Still, instead of ending taxpayer support (and taxpayer RISK) with these GSE’s, Dodd-Frank allows them to continue to function without consequences. Naturally, a serious-minded individual would ask: “Why wouldn’t Dodd-Frank address the Fannie and Freddie issue seeing that it was a HUGE part of the financial meltdown?” PERHAPS, it’s because BOTH Chris Dodd AND Barney Frank have SERIOUS conflicts of interest with regard to both institutions!
The “Boston Globe” actually ran a headline: “Frank’s Fingerprints are All Over the Financial Fiasco”.
Ever heard of Herb Moses? Well…..you’ll be DELIGHTED to know that all through the 1990’s, Mr. Frank (who was on the House Banking Committee at the time, and THAT committee had jurisdiction and oversight of Fannie Mae) was having a ROMANTIC RELATIONSHIP (mental picture…..nausea…..just fainted…) with Herb Moses. Mr. Moses? You mean the “Mr. Moses” that was an executive at Fannie Mae? Uh huh…same dude.
Blogger Charles Rowley summed it up here.
Fox News reported: “In 1991, the year Moses was hired by Fannie, the ‘Boston Globe’ reported that Frank pushed the agency to loosen regulations on mortgages for two and three family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.”
Mr. Frank later claimed that his “close relationship” with Mr. Moses was “not a conflict of interest.”
Dodd? Well, he just received massive contributions, including $780,000 in loans below market rate of interest. Do some research, and look into the meltdown of Countrywide Financial. The Wall Street Journal summed their involvement up in a VERY interesting article.
In a mid-October 2012, meeting at the Securities Industry and Financial Market Association annual event in New York City, former Fed Chairman Alan Greenspan had the following comments regarding “too big to fail”, Dodd – Frank:
* He would like to see ALL institutions go through Chapter 11 if they get into trouble.
* Dodd-Frank is essentially there to restrain competition. It would be physically impossible to enact all of its provisions.
By every stated intention of Dodd-Frank and its 2,300 pages of regulations, it is a massive failure, and should be overturned, A – S – A – P.