Ed Feulner

Perhaps the biggest failing, when it comes to Dodd-Frank, is something that lawmakers didn’t do. In their zeal to persecute Wall Street, they overlooked two of the biggest players in the crash of 2008: Fannie Mae and Freddie Mac. Before the housing collapse, these two “government sponsored enterprises” controlled as much as half of the nation’s residential mortgage market. Since then, both companies have gone bankrupt, and rely on the federal government to keep them alive with billions in taxpayer money.

Fannie and Freddie have always imposed risks on taxpayers and the financial system. It’s time for genuine, effective financial reform. They should be phased out, with their remaining assets broken up (if they can stand on their own) or sold off (to private banks and investors).

As for Dodd-Frank, it’s time for repeal. Financial industry expert David John calls it “trash compacter legislation filled with heavy-handed, counterproductive provisions, many of which had only a loose connection to the problems raised by the financial crisis.” There’s no fixing it.

If we want “safer and more modern rules of the road for the financial industry,” in Geithner’s words, we need to recognize Dodd-Frank as a dangerous dead end.

Ed Feulner

Dr. Edwin Feulner is Founder of The Heritage Foundation, a Townhall.com Gold Partner, and co-author of Getting America Right: The True Conservative Values Our Nation Needs Today .
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