“Some of the most damaging behavior on Wall Street, some of the most unethical behavior on Wall Street, wasn’t illegal,” Obama told 60 Minutes as he pitched his own reelection December. “That’s why we had to change the laws.”
The change in laws Obama was talking about was largely the body of work known as the Dodd-Frank financial reforms.
Dodd-Frank however, epitomizes how a Democrat Congress, under this president, wrote and, in some cases, passed legislation that not only doesn’t address the problems the legislation was supposed to solve, but actually makes the problems worse.
Obamacare, Cap and Tax, stimulus spending, the bailouts, green investments, the absence of a budget while the president preaches fiscal discipline, are more examples of a do-worse-than-nothing mentality that the Democrats have taken to government with Obama as their high-priest.
And getting past the ideological question of do you believe in Obama’s redistributive, class-warfare scheme, brings you to the answer to the other question pertaining to why he should not be reelected to office of president of the United States.
He has no idea how the country actually works. If he suddenly channeled Glenn Beck ideologically, he’d still be a terrible president.
Nothing is as characteristic of this president’s tenure, as his ignorant defense of the misguided, so-called banking reform measures that the Democrats took under the Dodd-Frank legislation currently being enacted. Nothing also better illustrates the Democrats lack of responsibility for how the financial system came apart.
Because, like it predecessor Sarbannes-Oxley, the attempt to reform financial markets under Dodd-Frank, reforms nothing and leaves the markets that much worse.
It’s estimated that Dodd-Frank, after Obamacare, will be the most costly legislation in the history of the country, not just to administer, but also in real economic costs to our country’s GDP or economic output.
And despite Obama’s claims, nothing in Dodd-Frank actually makes illegal any of the unethical or damaging behavior, taken either in Washington or Wall Street, which created the financial mess caused by the easy availability of credit for real estate purchases. Nor does Dodd-Frank make our banking system safer as Democrats claim.
Actually quite the contrary.
As the bankruptcy under Democrat uber-genius Jon Corzine at MF Global shows, despite repeated attempts at reform through Dodd-Frank and Sarbannes-Oxley, thieves will always do what thieves will do
And while the left likes to blame Wall Street for the problems and the right likes to blame Washington, both sides were not only culpable, but in cahoots.
They still are.
If we are going to make real progress on actual reform, we have to break up the federal regulatory cabal, not codify it through ineffectual and dangerous legislation that makes no attempt to actually reform anything, but rather just gives stealing the soft name of lobbying.
In fact, Dodd-Frank will make our national banking system even more dangerous and much more likely to fail in the future no matter how much bragging Obama does about it.
And the next time we have a systemic crisis in banking in the US is the last time we will have a systemic crisis in banking.
The stakes are that grave.
“For many in the U.S., the worrisome events occurring in Europe recall the 2008 financial crisis,” writes Peter Wallison of the American Enterprise Institute in the Wall Street Journal on December 3rd. “If Greece or some other country should fail to meet its debt obligations, the result could be much like the 2007 mortgage meltdown in the United States. Many banks and other financial institutions in Europe, and some in the U.S., may be weakened by the loss in value of the sovereign debt they hold.”
In fact, the banking system is already in the process of melting down, but a zero-interest rate policy by the Federal Reserve- and US government-currency printing presses have, to some extent so far, propped up the system.
But it can’t go on forever.
Dodd-Frank, passed by the Democrats and supported, if not urged by the president, has taken the Too Big to Fail system and turned it into Too Big to Succeed by massing assets in a smaller number of bigger banks and nonbank financial companies.
“Dodd-Frank, which authorizes the Federal Reserve to supervise all ‘systemically significant’ nonbank financial firms, [has] thus [spread] dangerous conformity to insurance and finance companies, hedge funds and others. Stability can come only when we stop rewarding herding behavior, and penalize it instead.”
In the meantime, we have let off the worst of the subprime fraudsters at Fannie Mae and Freddie Mac who, with an assist from Wall Street and Washington- politics aside- caused the problem to begin with.
Fannie and Freddie wanted to do more business; Washington wanted them to do more business; so Wall Street came up with a way to keep everyone happy by securitizing mortgages to- in theory- spread out risk.
Markets have a way of eventually proving everyone wrong however, when they are wrong, as markets did in subprime housing.
They still are proving it; in energy prices, in green bankruptcies, in unemployment; in GDP.
In practically every dataset markets are voting no on a second term for Obama.
It’s not the laws we have to change, they are saying.
It’s the president.