The federal government can’t patrol the border, but they can hire 3,000 sheriffs to shakedown Wall Street.
New regulations passed by Democrats aimed at policing Wall Street will cost the government $1 billion to implement according to the General Accounting Office (GAO).
The regulations are called Dodd-Frank after the congressional authors of the legislation.
See also: Reaganomics Key to Growth, Then, Now- Larry Kudlow
I mention that because one might be tempted to think that they named it after Christopher Dodd and Barney Frank because both were such big, ha, ha, mortgage industry insiders. Hey, what if they were just trying to be ironic in naming the legislation after themselves? Who said Congress doesn't have a sense of humor?
Dodd, you will remember, got a VIP mortgage from one of the largest mortgage lenders and abusers. Barney Frank, chair of the banking committe overseeing the mortgage inudstry, said there was nothing inappropriate about the transaction.
Presumably they both already had some good ideas about reforming mortgage markets even back then.
In 2003, Frank predicted: ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Why, oh, why couldn’t we just leave Fannie and Freddie alone?
Now the feds will have to hire 2,600 new enforcement officials to implement Dodd-Frank.
But that's only $385,000 per "job saved/created." It you compare it to the “stimulus” Dodd-Frank is doing much better.
And just think of the benefits if they unionized those positions!
The estimate does not include the costs to implement by the banking and brokerage industry that will be passed along to consumers, as such costs always are.
I'm still not sure what Dodd-Frank is supposed to accomplish, except to create more regulatory burdens for financial markets.
Does anyone really believe that the same federal government that decided the design of the Fukushima nuclear reactor was safe, can regulate the financial markets?
The 2008 mortgage meltdown, not to mention the partial meltdown at Fukushima, say no, they can’t handle the responsibility. Increasingly there is evidence that the feds have no answers to any of life’s questions.
They can’t even declare war correctly… or even at all.
These are the same guys who made convincing arguments when they federalized the mortgage business. These are the same guys who messed with capital requirements of brokerage firms in 2004 including Lehman Brothers, Bear Stearns, Merrill Lynch, Goldman Sachs and Morgan Stanley. Changing capital requirements was the prime culprit that created the problem of “too big to fail.”
Goldman and Morgan Stanley survived, while the others failed.
Perhaps that’s why Goldman, Morgan Stanley and other Wall Street types were such big contributors to the Obama campaign. Goldman Sachs was the second largest contributor giving Obama $994,795 in 2008, while Morgan Stanley came in 8th with $514,881.
I wonder how many jobs those donations saved/created for executives at those brokerage firms?
If it smells like Fukushima…run.
I'd be happy if anyone could just make the argument how of financial system would be better off by implementing Dodd-Frank. I know that it benefits the government by making it too big to fail, but exactly how does it help the rest of us?
Isn't that the central problem with our economy? Hasn't government taking a larger share of the lead in employment, mortgage lending, energy...everything?
Mish's Global Economic Trend Analysis has a nice explanation of why the last decade is really a lost decade for the US.
"It may surprise you to learn that job losses in the most recent decade ending February 2011 are reasonably comparable to the job losses from 1929-1939. Moreover, if we exclude government and 'quasi- government' jobs, the latest decade is the worst ever, by far."
"Worst [decade] ever, by far," except for government and quasi-government employees; they saw employment rise by 16 percent while the rest of the country saw the job market shrink by 8 percent.
Barney Frank, maybe.He’s way too big to be wrong.