Over the weekend, President Obama hailed the third anniversary of the enactment of the Dodd-Frank “financial reform.” In his weekly radio address, the president also hailed the confirmation of Consumer Financial Protection Bureau Director Richard Cordray, which occurred last week after Senate Republicans caved to Majority Leader Harry Reid’s “nuclear option” threat to end the filibuster.
The president began his address, “Three years ago this weekend, we put in place tough new rules of the road for the financial sector so that irresponsible behavior on the part of the few could never again cause a crisis that harms millions of middle-class families.” And he concluded, “If we keep moving forward with our eyes fixed on that North Star of a growing middle class, I’m confident we’ll get to where we need to go.”
Sorry, Mr. President, but just the opposite is true. Dodd-Frank has declared certain large financial institutions to be “Systemically Important Financial Institutions,” enshrining too-big-to-fail in law. And the volumes of regulations emanating from the law’s 2,500-plus pages have harmed community banks, credit unions, small businesses, farms and manufacturers that had nothing to do with the crisis.
Here are some articles my colleagues and I have written on Dodd-Frank’s devastating toll as well as some its just plain silly, but still destructive, provisions:
- I write in National Review and American Spectator on the new database the CFPB is building that rivals the National Security Agency in collecting personal financial data. The articles make the point the CFPB is even less accountable than the NSA, because at least the NSA gets it funding from Congress, rather than the Federal Reserve.
- My colleague Iain Murray explains in “The Corner” of National Review Online how the Treasury Department is extending the SIFI or too-big-too fail principle beyond banks to many types of businesses.
- Provisions in Dodd-Frank regulating trade and the energy sector?! Believe it or not, yes?! I point out in National Review the flaws and lack of justification for provisions jammed into Dodd-Frank that force energy companies to disclose every payment they make to foreign governments and manufacturers to disclose if any of the gold, tin, or tungsten they use may have come from the Democratic Republic of the Congo. These provisions were inspired by celebrity activists but are hurting the very regions of the world they were meant to help, as well as driving up energy prices in the U.S. economy.
- In a rare instance of bipartisanship on deregulation, lopsided and, in some cases, unanimous majorities of the House Agriculture and House Financial Services Committees bucked the Obama administration to provide relief from Dodd-Frank’s stringent derivatives regulations. I document here in OpenMarket how both sides pointed out that these provisions were hurting farms, airlines and factories that had nothing to do with the financial crisis.
If the president truly wants to focus on the “north star” of helping the middle class prosper, he should work to repeal Dodd-Frank, end bailouts and lift barriers to more competition in the banking system from credit unions or well-run companies such as Wal-Mart. More to come on these items.