Monday, May 11, 2015


Paul Krugman warns us that right-wingers still really want to kill Dodd-Frank, and that we're going to have to keep our guard up to prevent them from doing that -- but he also says that they seem to be abandoning one line of attack on it:
When right-wing think tanks do try to claim that regulation is a bad thing that will hurt the economy, their hearts don’t seem to be in it. For example, the latest such “study,” from the American Action Forum, runs to all of four pages, and even its author, the economist Douglas Holtz-Eakin, sounds embarrassed about his work.
I don't really know what right-wing think tanks are up to, but several Republican presidential candidates are still talking as if Dodd-Frank is crushing the economy's spirit. Here was The Hill last month, reporting on Carly Fiorina:
Likely GOP presidential candidate Carly Fiorina wants to abolish the sweeping Wall Street reform law.

The former Hewlett-Packard CEO told The Hill that if she were elected president, she'd nix the 2010 Dodd-Frank legislation entirely and begin anew.

“We should get rid of Dodd-Frank and start again,” Fiorina told The Hill.

Fiorina argues the law will do little to prevent another financial crisis and has instead introduced regulations that are holding back the economy.
In a Breitbart interview last month, Fiorina said this:
... now we have three thousand community banks that have gone out of business. And they’ve gone out of business because they can’t handle the complexity and the requirements.
Meanwhile, Jeb Bush said this last month in an appearance in New Hampshire:
"On my last trip to New Hampshire, I think I met the guy who founded the first and only bank since Dodd-Frank passed, since the financial crisis. One bank in the country."
PolitiFact said that claim was "mostly false" -- "Depending on the data set you choose, it’s either the second, fourth, ninth or 20th." While it's true that the number of new banks has dwindled, a Federal Reserve report says that's probably because there's not much money in it these days -- the economy has remained weak, and, of course, interest rates are low. (The report finds that historically there's been a strong correlation between low interest rates and low bank formation.)

And let's not forget that Marco Rubio last year proposed a law that would drastically limit regulation:
Congress would establish a National Regulatory Budget, say at $1.75 trillion, and then the new review board would have the power to prohibit government agencies from issuing new regulations until their costs were estimated and old regulations with equivalent costs were taken off the books.
So every regulation would be treated as primarily a money suck, and there'd be a ceiling on regulations as a result.

So maybe Krugman is right, and the think tanks aren't saying that financial regulation strangles the economic. They're just letting the GOP presidential candidates say that instead.

1 comment:

Victor said...

Next to Obama himself, and his Obamacare, the Reich-Wingers hate Dodd-Frank the most.

If the GOP gets in power soon, they will do everything they can to dismantle it.

Right now, they're just trying to undermine it, so that when they they're in power and decide to kill it, they'll have established in the public's mind, just how "harmful" that law is.

Never mind the fact that it's nowhere near, as Krugman said, as strong a law as it should have been.
Weak tea, is still tea - weak or not.