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Jul 22 2011

Dodd-Frank Damage Begins to Unfold

The Washington Times does a little follow-up on the Dodd-Frank bill, a monstrous 2,300-page law named after two of the most corrupt clots of slime ever to disgrace the Beltway. It was a reaction to the $zillions our rulers flushed down the toilet in bailouts after Democrat race-based mortgage policies crippled the housing sector and with it the entire economy in 2008. Supposedly it would do away with the alarming concept that politically connected firms are “too big to fail.”

The actual result has been a mountain of red tape. At least 400 new federal rules will be layered on top of existing regulations. New bureaucracies will have overlapping jurisdiction with existing regulatory bodies. Affected banks and businesses are scrambling to comply, but frequently they don’t know what they are supposed to be complying with. Only 21 of these rules have been finalized, and the remainder are being rammed through with nearly no time made available for cost-benefit analysis, public comment or reflection.

Far from getting rid of bailouts, Dodd-Frank institutionalized them. Title II empowered the Federal Deposit Insurance Corporation with “orderly liquidation” authority, giving the agency discretion to intervene between a financial institution and its creditors in any way it sees fit. Markets have not been slow to recognize this. Historically, large banks have paid higher interest rates on their loans than small banks; since the passage of Dodd-Frank that relationship has been reversed. Markets believe Treasury Secretary Timothy F. Geithner when he says the federal government is prepared to do “exceptional things” if warranted. That means the “too big too fail” ethic still applies.

Dodd-Frank has largely severed the relationship between risk and return, which is the necessary discipline imposed by a free market. Now, the big banks get to keep the rewards, but American taxpayers bear the risk. If that sounds familiar, it should. That is precisely what happened in Greece, when the International Monetary Fund underwrote hundreds of billions of dollars in loans, leaving American and German taxpayers stuck with the bills.

The only difference between America under its current rulers and Greece is that we have nowhere to turn for help, once our own taxpayers have been bled dry. To sum up:

Dodd-Frank has been an expensive exercise in command and control by the federal government. It encourages crony capitalism while undermining free markets and limiting competition.

The insane law will cost businesses $27 billion over the next 10 years in various fees, assessments, et cetera. At least major Dem donors like Goldman Sachs will get their money’s worth.

If we let people like this rule us, we don’t deserve a future.

On a tip from Just TheTip.

17 Responses to “Dodd-Frank Damage Begins to Unfold”

  1. eb says:

    I just realized something as I gazed upon those specimens of Dimocrap leadership.
    I bet there is not a one of them that has ever had a significant position in the free market.
    And these fools are setting our economic policy and writing the rules and regulations as they fumble along.
    Good lord, we are in trouble, gotta last for another 16 or 17 months and then correct this disaster.

  2. Sandra Cohen says:

    Do not labor under the false presumption that these people give a DREK about America’s or the world’s economy. As far as these denizens of Hell are concerned things are going along nicely just as planned.

  3. Silent Knight says:

    We’ve only just scratched the surface of this Rape of the American Economy.

    This Dumb-Fcuk bill gives the Fed total transparency of every individual’s bank account and credit card and ALL activity.

    When wide-awake Americans realize what is being done to their Freedom, they’ll switch to cash. When the dollar collapses to $0, bartering will begin.

    As the saying goes, “It’s going to get a whole lot worse, before it gets worse.”

  4. Hail The Amberlamps! says:

    Couple the CRA-CYA Act with Destroy Healthcare and you have the recipe.

    The recipe to collapse federalism into communism.

    Isn’t it suspicious Ubangi held off his congressional Bolsheviks on the Second Amendment, a permanent target of the Reds? In other words, they learned collapse & chaos have to occur for the sheople to clamor for collectivization of their rights. Starve enough dependents on Uncle Sugar while collapsing the economy and a majority will beg their reps to vote away their rights.

    Collapse and Chaos are part of his plan.

  5. Cameraman says:

    “Hell I”ve got eleven new ropes I”am not Using!

  6. Michelle says:

    Don’t leave out the imediate increase to a rate of 33% on credit cards.

    The imediate cancelation when paid of, and the reductions of credit lines which keeps it always “overlimit” so they can get those fees also….


    Obama leaves his hoofprint on another leftists bill

  8. KHarn says:

    >…the Dodd-Frank bill, a monstrous 2,300-page law…>

    No congressonal bill should be longer than 4,400 words, the length of the US Constitution. After all, if our forefathers could create a country and a new form of government with that many words, congress can certainly make laws regulating rutabagas and corn with as many words.

    Unless they want to admit that they are IDIOTS.

  9. Bob Roberts says:

    We need two Constitutional Amendments.

    The first must make it clear the Federal Government cannot spend more than it currently has – not than it expects to get, but that it already has. Balanced budget, in other words. And it must be written so the same sort of accounting nonsense that led to Clinton declaring a surplus cannot be used.

    The second must give the President a line item veto of SPENDING MEASURES – each line item of SPENDING is to be considered a stand alone piece of legislation subject to individual veto. Any that fall due to veto can go back to Congress to see if they can muster enough votes to override.

    We pretty much need to have single, simple bill put through Congress after the changes coming in 2012 are made – this law needs to simply rescind most everything passed by the Democrats and signed by Obama, with whatever few exceptions the sensible people who (hopefully) are voted in to replace Democrats see fit to make.

    Certainly Dodd-Frank needs to go, as well as Obamacare.

  10. A. Levy says:

    This is what the American sheeple have allowed, and this is exactly what they deserve. By allowing lying crooks like Dodd (even though he “retired”, see: got away) and Frank to stay in power, the people are telling the elected crooks that they don’t mind being abused.

  11. Strnj1 says:

    …and the banks are passing it along in the form of higher customer fees.

    Wells Fargo demands customers pay $3.00 a month to download transactions to Quicken, after that, I closed my account with them and I hope others will be more willing to shop around.

    The Credit Unions are a better deal at this time.

  12. Scott says:

    Bailouts for all! The moonbats say that the Reps. are the party of the rich. Obummer is the Leader of the banking elite. Before the recession the 10 major banks controlled 55% of American assets. Today it is 73% and Fannie/Freddie control 90% of our mortgages. Princess Frank and Prince Dodd have done quite well by themselves–not to mention Pelosi who has gained 21%.

  13. Lazlo says:

    ITT; Sleezy progs screw over America taxpayers again. I’ve said it before and I’ll say it again, progs will be hunted with dogs before this is over.

  14. Sharpshooter says:

    Both of those POS were put into office by VOTERS.

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