The Dodd-Frank Act: Ill Conceived, Destined to Fail
Posted by on September 23, 2011

Today’s American Banker includes a dead-on piece about how the Dodd-Frank Act, with its 2,300 pages and more than 400 regulations, is “regulatory overkill” with unintended consequences that hurt consumers and the economy.

“It's a fool's mission for our government to try to micro-manage our financial system — and for all the lip-service paid to balancing regulation and markets, that's precisely what Dodd-Frank purports to do.”

The Banker article notes the Dodd-Frank Act will result in higher consumer costs, fewer and bigger banks, fewer mortgages, and tighter credit.

Although promoted by its supporters as Washington’s response to the financial crisis, the article rightfully points out:

“…the law doesn't even try to address what many regard as key culprits in the financial crisis — the roles of Fannie Mae and Freddie Mac, the credit ratings agencies and the fact that our financial system is more consolidated than ever in the hands of a few too-big-to-fail banks.”

Read the article in full here.

Government doesn’t create jobs.  But it is the responsibility of government to create a fertile environment that enables the economy to grow, that allows businesses to expand and hire.  The Dodd-Frank Act – along with other Obama Administration policies such as the stimulus, Obamacare and threats of higher taxes – does the exact opposite.  All have created uncertainty and spawned a host of new regulations – at a time when America is already suffering through the longest sustained high unemployment rate since the Great Depression.  The country’s jobless rate has been above 9 percent for 27 of the last 28 months.

The answer to high unemployment isn’t still more gargantuan laws passed by Congress that are full of harmful regulations, it’s policies that break down barriers to business growth and hiring.  Earlier this week, the Subcommittee on Capital Markets and Government Sponsored Enterprises considered 5 bills that do just that.

As one job creator who testified at the Subcommittee’s hearing stated:

“I believe that all 5 bills being considered today are important for our country’s entrepreneurs and will help improve access to capital for startups.”

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