Tuesday, February 7, 2017

One word I use frequently, well really two are hilarity and comical. So forgive me for I am about to employ their use again but this time it will be in reference to Dodd-Frank.  Not the law itself but rather the outrage I have heard from people regarding President Trump’s desire to review and possibly gut the bill. Trump has just outline his plan to revisit the legislation introduced by President Obama approaching some seven years ago. In light of this, I asked several people how they viewed his decision. And the comedy followed.

The first few people said straight up that this was a bad idea and that Trump was just messing up again.  They were vehement in their positions so I probed more asking two questions: (1) can you explain the Dodd-Frank legislation to me, and (2) have you ever read the legislation? I was not surprised for as I had anticipated none of the four had ever read it nor could they explain the law.  Why is it that people get outraged at things they really have no understanding or knowledge of?

In my own view, Dodd-Frank is a worthless waste of trees.  It basically amounts to 2300 plus pages of nothing. When President Obama signed Dodd-Frank into law he told all Americans that it would serve as a stimulus to the U.S.economy. Instead of taking his word for it, I spent a week reading and trying to understand as much as I could proffer about the law. I read a lot of rules included in the law, hundreds, so many that I could only conclude some redundancy and some inherent contradictions. 

What was clear was that it would not do one thing: end the practices of the “too big to fail” banks that brought about the 2008 financial crisis. It did however, with all of the new regulations, grow the size and cost of government albeit it claimed to streamline the regulatory processes for Wall Street.
That was then and after the end of the Obama administration, the Government Accountability Office (GAO) has documented some of my initial concerns. Not only has it added thousands of new government jobs it also cost in excess of a billion dollars for the law to be implemented annually. Moreover, the largest U.S. financial institutions are still “too big to fail” and in most cases have grown into even larger than they were prior to Dodd-Frank becoming the law of the land.
In short, small business lending from banks has dropped dramatically and there are fewer smaller banks across the country, thus creating less competition among these institutions in the favor of bigger banks compared to smaller community banks.  Moreover, since most small business and start-up happen at the local level, with fewer small community banks, there has been the consequence of fewer new business startups.

It may end up that Dodd-Frank could have made the U.S. financial system even more unstable than it was in 2008. Then there is the fact that the legislation did not address any of the issues prevalent with Fannie Mae and Freddie Mac, which can be considered the main catalyst for what occurred in 2008. One reason for this could be that the Obama administration focused on pushing that what led to the financial crisisin 2008 was a lack of oversight and regulation of the financial system. Although I am no economist, I would disagree with this assertion because there has always been oversight it was rather that regulators mainly came from the banks they were supposed to regulate and often either looked the other way when wrong doing occurred, given a slap on the wrist or in a worse case, gave big banks special treatment.


All in all, it can be said wit substantial evidence that Dodd-Frank did not do what it said it would do.  And not to say that I know what President Trump will do, I can say it does need to be looked at again, in particular in terms on how it inhibits new business formation and puts the federal government in bed with these massive financial institutions. I also don’t like how it plays favoritism with big banks allowing them to borrow money at lower rates than smaller banks. Similarly the manner in which it allowed big banks to add a banking fee to anything has contributed greatly to the tightening of purse straps demonstrated by a large body of the U.S. populous. Before Dodd-Frank more than three out of four banks provided free checking, now this is a thing of the past and may be why more and more people either do not want or can no longer afford to have a bank account.  But like I started with, if you ask me, Dodd-Frank is worth less than the paper it was printed on.

0 comments:

Post a Comment

Torrance T. Stephens. Powered by Blogger.

I am Author, Writer and Infectious Disease Scientist. Originally from Memphis, Tennessee.

My Old Blog & [Bitcoin Wallet]

Torrance T. Stephens on Google Scholar
Torrance T. Stephens on Research Gate

voltaire


test



163jCMr5GQwivrZZqDDgqkMGeYtnGLNuAX

1LqPZXxGJkaD7FGXxQYumW7oGfHWMpES85

1LqPZXxGJkaD7FGXxQYumW7oGfHWMpES85

demo

orwell
mlk
hux

Worth A Read

12160.info
12Kyle
24 Hr Gold
Adeyinka Makinde, Writer
Advancing Time
http://Afghanistan Times
Africa Confidential
African Independent
AgainstCronyCapitalism
Ahval News
Al-Alam News Network
Al-Ayham Saleh Aggregator
Alethonews
AllSides
American Partisan
Anadolu Agency
ANF News
Another Day In The Empire
Antiwar.com
Antonius Aquinas
The Arab Weekly
Asharq Al Awsat English
Antonius Aquinas
Article V Blog
Bakhtar News English
Balkinzation
Bill Mitchell Blog
Borneo Bulletin
CAJ News Africa
Catalan News
Chuck Spinney
Center for Economic and Policy Research
CLUBORLOV
Corrente
Crime Prevention Research Center
24 Cryptogon
DarkMoon
Dawn News
Deep Throat
Der Spiegel International Online
Diogenes Middle Finger
Dollar Collapse
Donbass International News Agency
EA WorldView
Economist View
Egypt Independent
Empty Wheel
eNews Channel Africa
Fabius Maximus
First Things
Foreign Policy In Focus
Fortune Financial Blog
France24 Debate Youtube
Frontline Magazine, India
Global Guerrillas
gods & radicals
Gold Anti-Trust Action Comm
Gray Zone Project
Greg Palast
Gubbmint Cheese
Gun Watch
Hacker News
Intercollegiate Studies Institute
Interfludity
If Americans Only Knew Blog Ie
Illegal Alien Crime Report.com
Independent Ie
Indian Punchline
Information Clearinghouse
Institute for New Economic Thinking
Insecurity Analysis
Interfluidity
Off-Guardian
James Petras
James Bowman
John Brown's Public Diplomacy Press
Khaama Press News Agency
Kashmir Monitor
Land Destroyer Report
Lawfare
LegeNet blog
Le Monde diplomatique
Leafy
Libyan Express
MIT Technology Review
Manhattan Institute for Policy Research
MarijuanaStocks.com
Mark Curtis
Measure Text Readability
Mello Reads The Meter
Mish Talk
Moon of Alabama
Morningstar News
Mysinchew
N+1
NewBlackMan (in Exile)
Noahpinion
Op India
Owl's Asylum
OWL In Catch Up Mode
Palestinian News & Info Agency
Paperboy - Newspaper Front Pages
PanAm Post
Philosophy of Metrics
Planet of the Chimps #2
Pogo Was Right
Priceonomics
GC
Prensa Latina
Prison Reform
Privacy Watch News
Professional Troublemaker
Punch
Quillette
Quodverum
RINF
Radio Free Europe/Radio Liberty
Raqqa is Being Slaughtered Silently
RawDawgBuffalo
Real-Economics
Real Time Business News
Redress Information & Analysis
Ripped Em Up
Ron Paul Institute for Peace and Prosperity
ROOSH V
Rudaw
Russian Insider
Seven Days
Silent Crow News
Silver For The People
SlashDot
Snake Hole Lounge
SoFrep
South China Morning Post
South Front
Spiked Online
Steve Keen's Debtwatch
Steve Lendman Blog
Straight line logic
Strategic Culture Foundation
Syrian Arab News Agency
The Asian Age
The American Conservative
The Automatic Earth
The Cable Nigeria
The Conscious Resistance.com/
The Conversable Economist
The Daily Sabah
The Day UK
The Diplomat
The Economic Collapse
The Field Negro
The Fifth Column News
The Hindu
The Ignorant Fisherman
The Money Illusion
The National Interest
Tom Dispatch
TRT World
Tyranny News
Oriental Review
The Rutherford Institute
The Slog
The Social Contract
The Standard (Hong Kong)
The Unbalanced Evolution of Homo Sapiens
Triangulum Intel
Unredacted
vigilant citizen
Volkay's Volcano
Wall Street On Parade
Warsaw Voice
We Kill Because We Can
Wordcrunch
Yanis Varoufakis
Yohap News Agency
Zero Anthropology

Followers