June 1st, 2015 5:53 PM by Richard T. Cirelli
In testimony before the House
Financial Services Committee, Paul Mahoney, professor at the University of
Virginia, recently said Dodd-Frank blamed all of the wrong parties. He says it
should have blamed the crisis on government attempts to avoid a recession,
expand credit to low-income households, and failure to avoid systemic risks.
Mahoney went on to say all Dodd-Frank has really done is enshrine
too-big-to-fail banks. He said the mistake is to think Dodd-Frank will prevent
future similar failures when history shows it is rare to see failures repeated
in the same fashion so, essentially, Mahoney says, Dodd-Frank is nothing more
than over-regulation at the expense of the public.
I couldn’t agree more.
That testimony was so good, you
need to hear more. Hester Peirce of George Mason University pointed
out that Dodd-Frank assumes regulators are better able to make business
decisions than those who run businesses. Peirce believes Dodd-Frank made it
impossible to lower the profile of Fannie Mae and Freddie Mac. Instead, it
ensured that they would be the sole sources of conventional lending since the
regulations passed shift all risk to the Federal government.
There is no question that most
Republicans in office today would not have voted for Dodd-Frank and would like
to repeal it. So, why don’t they, instead of just sniping at small parts? The
number one reason is that they don’t want the label of being “anti-consumer”.
Repeal of Dodd/Frank would end the Consumer Financial Protection Bureau. Two
polls taken in 2011 and 2013 by consumer groups indicate voters overwhelmingly
approve of strong regulation of the financial industry. Then, 60 votes are needed
in the Senate and Democrats consider Dodd-Frank a “fall on the sword” issue.
Finally, the President has vowed to veto anything that weakens Dodd/Frank. So,
But all three economists agreed that
despite the projected rise in interest rates, 2015 is still looking it’s going
to be strong year for housing. And the economists all said that 2016 will be