Get excited — Dodd-Frank is also here to stay

posted at 1:51 pm on November 9, 2012 by Erika Johnsen

Obama’s second term means the leviathan legislative packages of ObamaCare and Dodd-Frank are indeed going to survive fully intact and are now preparing to rule over the health care and financial industries with an iron regulatory fist… and it’s not going to pretty. From the Associated Press:

Financial stocks in the Standard & Poor’s 500 were down more than 3 percent around midday, worse than any of the other nine stock categories in the S&P.

The concerns that plagued stocks broadly — looming government spending cuts and tax increases, a deepening recession gripping Europe — are especially hard on banks and other financial firms.

Obama’s re-election also has a direct impact on banks: …

— It means the thick roster of banking rules passed in 2010, the Dodd-Frank Act, is all but certain to stay in place. Those rules have crimped some revenue sources that banks used to rely on, like fees charged to stores when customers use debit cards, or on credit cards marketed to college students. Romney had promised to repeal Dodd-Frank.

I’ve often noted my internal quandary over which of Obama’s ‘crowning legislative achievements’ will actually end up doing more economic damage in the long run (but I won’t have to wonder anymore, because we’ll get to see it first hand, yippee!). While both of these ill-conceived, paternalistic, bureaucratic endeavors are doomed to be economic catastrophes that will impose egregious opportunity costs, there is no sector of the economy that doesn’t pass through finance in some form. From businesses large and small seeking loans to speculative trading to individuals saving and accruing money for retirement — these transactions are all fundamental to economic growth, and Dodd-Frank is going to pose a huge hindrance upon all of these activities.

In July, J.W. Verrett wrote for Forbes that separation-of-powers-lovin’ George Washington would be turning over in his grave if he knew about the immunity from outside oversight that the Dodd-Frank-created Consumer Financial Protection Bureau is going to enjoy:

In his farewell Presidential address, [George Washington] noted the “love of power and proneness to abuse it which predominates in the human heart” and he suggested the “necessity of reciprocal checks of political power…”

The CFPB Director is indeed the czar of czars.  He or she may only be removed for neglect or malfeasance in office.  That is not true of most other financial regulatory agencies, where the President can replace the Chairman at will by designating another Commissioner as Chairman.

Nor is the CFPB accountable to Congress.  The Dodd-Frank Act prohibits the House or Senate from reviewing the agency’s spending authority. The CFPB’s $500 million budget comes entirely from the Federal Reserve’s surplus, out of funds that would otherwise be returned to the Treasury Department and ultimately to the [A]merican taxpayer.

President Obama seems to be wildly fond of decrying financial institutions that are “too big to fail” and insisting that they need to be accountable for the “bad bets” that led to the financial crisis — but he always conveniently forgets to mention that the federal government created a lot of those faulty incentives in the first place. I’m not excusing Wall Street, big banks, etcetera, but it is a fundamental truth that most people and businesses, when given the opportunity to rent-seek, will rent-seek. The only venue that permits rent-seeking above free-market competition is big government, and poorly-planned and politically-motivated regulatory overhauls that will only put a damper on transparency and competition are not the solution to that problem. Why? This isn’t going to encourage honest oversight as much as it will collusion.

There’s a very big difference between being pro-business and pro-market. The Obama administration is decidedly not pro-market, and the president’s financial reform isn’t doing anything to effectively put a stop to “too big to fail.” Mitt Romney turned the president’s showy rhetoric on its head during the first presidential debate, pointing out that Dodd-Frank “designates a number of banks as too big to fail, and they’re effectively guaranteed by the federal government. This is the biggest kiss that’s been given to—to New York banks I’ve ever seen.” If anything, smaller banks and institutions may actually end up bearing the brunt of the law — funny how so many Democratic policies end up hurting the very people they claim to be trying to protect, isn’t it?

The government has missed more than half of the law’s deadlines for rules, meaning that a lot of regulations have yet to be written, and there are certain parts of the law the financial industry and others are challenging in court that could be delayed or even overturned. But now that President Obama has gotten through his election with his “I am the great tamer of Wall Street” ideological purity mostly intact, I wouldn’t be surprised if we start seeing other modifications and adjustments to the law — and I wouldn’t bet any money on all of those changes being pro-market, if you know what I mean.

(I say all this, by the way, because I’m obviously one of those ridiculously wealthy, greedy “pin-striped Republicans” rolling in my fat stacks and looting the little people from my Wall Street tower. Or maybe I’ve just got free-enterprise Stockholm Syndrome, ’cause there’s just no other possible way I could favor smaller, more efficient government, amirite?)


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Let it burn…

Spread the word.

nitzsche on November 9, 2012 at 1:54 PM

(I say all this, by the way, because I’m obviously one of those ridiculously wealthy, greedy “pin-striped Republicans” rolling in my fat stacks and looting the little people from my Wall Street tower. Or maybe I’ve just got free-enterprise Stockholm Syndrome, ’cause there’s just no other possible way I could favor smaller, more efficient government, amirite?)

Very nice Erika!..Nice zinger at the end..:)

Dire Straits on November 9, 2012 at 1:54 PM

Called this on election night…

… up next, the Supreme Court.

Enjoy…!

Seven Percent Solution on November 9, 2012 at 1:55 PM

The Fiscal Cliff And The Keyser Soze Option

Seven Percent Solution on November 9, 2012 at 1:56 PM

day 3 of the Basic year and the market is down down down.

tom daschle concerned on November 9, 2012 at 1:57 PM

Let it Burn!

I got mine and I’m 64…those that stayed home screwed my children, grandchildren and their children. I won’t be around to clean up the mess, but I hope the pain for them goes to the fourth and fifth generations!

Let it Burn!

belad on November 9, 2012 at 1:57 PM

The CFPB Director is indeed the czar of czars. He or she may only be removed for neglect or malfeasance in office.

Nor is the CFPB accountable to Congress. The Dodd-Frank Act prohibits the House or Senate from reviewing the agency’s spending authority.

Hey great, an agency completely devoid of any way to rein it in were it to go insane.

You lefties are all about this sort of thing, yes? Government agencies that are completely unaccountable to the public?

You want more government, this is more government.

Bishop on November 9, 2012 at 1:57 PM

Dodd Frank gave us Wesley Mouch.

Where is the xylophone and the persuader?

tom daschle concerned on November 9, 2012 at 1:59 PM

Dodd-Frank+WARREN, will be here to stay.

The war on capital is an integral piece of the pie.

FlaMurph on November 9, 2012 at 2:02 PM

Dodd-Frank doesn’t worry me nearly as much as Obamacare. Dodd-Frank can be changed at any time. In other words, it may be here to stay, but not necessarily. It’s here for now. Any congress can tinker with it or repeal it outright. The same cannot be said for O.Care. Once it insinuates it’s tentacles throughout the healthcare industry the changes will be so profound there’s no going back.

rogaineguy on November 9, 2012 at 2:02 PM

Need some good news? Obama is going to streamline the tax code. The IRS will ask you how much you make and then demand that you send it all in! Easy, peasy.

Deano1952 on November 9, 2012 at 2:02 PM

Yet another tool for Barry’s Iron Fist!
Cliff!
Thelma and Louise!
LET’S GOOOOOO!!

TarheelBen on November 9, 2012 at 2:03 PM

And Chris Dodd & Barney Frank ride off into the sunset, without any accountability at all for the destruction that they set into motion before they retired from congress.

I wonder, do they still get secret service protection? I would love to read a news story someday soon about some very big, angry Conservative dude running into one of them on the street and beating the crap out of them.

UltimateBob on November 9, 2012 at 2:04 PM

DODD FRANK IS HERE TO STAY

This message was brought to you by Republicans that did not vote

Natebo on November 9, 2012 at 2:04 PM

Thank you Scott Brown.

He voted for this turkey in hopes of securing his blue state re-election. That worked out well :-/

exdeadhead on November 9, 2012 at 2:05 PM

Now this is the perfect storm as we fly off of the fiscal cliff…

… but don’t worry, Obowma will have a good time on vacation.

Seven Percent Solution on November 9, 2012 at 2:05 PM

How many more now?

Schadenfreude on November 9, 2012 at 2:05 PM

tom daschle concerned on November 9, 2012 at 1:59 PM

:)

Schadenfreude on November 9, 2012 at 2:07 PM

Oh, I forgot about Dodd-Frank.

Life is going to be so wonderful in Obama’s New Improved America 2.0, the Third World Socialist Workers’ Paradise Police State perfected.

clippermiami on November 9, 2012 at 2:07 PM

Get excited — Dodd-Frank is also here to stay

I accidentally read that as “Barney Frank is also here to stay,” which made me think that Obama created a position for a Gay Czar..

Glenn Jericho on November 9, 2012 at 2:08 PM

After having endured this election and constant arguing with friends, relatives, business associates and the like for the past 4 plus years over Democrat/progressive plans, values and policies, I have changed my mind over what the next course of action should be for the GOP, Libertarians, and Conservatives.

The American people have spoken, and there wishes should be 100% respected. The GOP in both houses of Congress should grant the President EVERYTHING he asks for; except for one minor item…no 2nd Ammendment restrictions;..ie Gun Control.

- Let the Bush tax cuts expire
- Let tax rates rise
- Tax the rich, the middle, corporations
- Pass more regulations
- Fully implement ObamaCare
- Spend more
- Start another war
- Create more programs
- Pass a 2 or 5 or 10 trillion dollar stimulus plan

I mean after all, elections do have consequences. The Democrats should be made to take 100% ownership for the economy. I say to the GOP…..DO IT!!! I will fully support you.

When it all comes crashing down we know who to blame.

And no, I am not being sarcastic here. I really do mean this.

Over the past how many years have we been told in conservative circles that there is no going back. This fiscal situation cannot be fixed. That a collapse is imminent….etc, etc. So why fight it anymore. Give it to them.

Again, no, I am not kidding.

Do it Boehner…Do it McConnell…

PatriotRider on November 9, 2012 at 2:11 PM

Up next…

… the Community Investment Act returns.

Good Times! Good Times!

Obowma really did fundamentally change the United States of America…

… Enjoy!

Seven Percent Solution on November 9, 2012 at 2:13 PM

Everybody’s checking and retirement accounts are just shaking with excitement..:)

Dire Straits on November 9, 2012 at 2:19 PM

George Washington would be turning over in his grave

Forget rolling in his grave, Washington would be hanging most of our politicians for treason if he could!

nextgen_repub on November 9, 2012 at 2:24 PM

… up next, the Supreme Court.

Enjoy…!

Seven Percent Solution on November 9, 2012 at 1:55 PM

If that doesn’t send shivers down everybody’s spine, they don’t have a spine.

portlandon on November 9, 2012 at 2:25 PM

We will see a grand meltdown during the next 4 years and in 2016 Americans will be more fed up with Obummer and Democrats than they were with W in 2008. Republicans need to stay the course now, like Dems did after 2004. We will get the chance to repeal Obamacare, Dodd-Frank and the rest of his legacy after his 2nd term. Its important that we make use of 2014, so that we can get supermajorities in 2016 like the Dems in 2008.

Valkyriepundit on November 9, 2012 at 2:26 PM

… up next, the Supreme Court.

Enjoy…!

Seven Percent Solution on November 9, 2012 at 1:55 PM

Ugh…everytime I forget that nightmare someone brings it back up…

nextgen_repub on November 9, 2012 at 2:26 PM

The underground economy is going to rise in the red states. The blue states are too far gone for anything other than total capitulation to the beast of the state they worship.

AZfederalist on November 9, 2012 at 2:27 PM

The Democrats should be made to take 100% ownership for the economy. I say to the GOP…..DO IT!!! I will fully support you.

When it all comes crashing down we know who to blame.

I said this yesterday.
Vote for everything they want. Let them own it.

When the economy tanks, the debt grows to the point that interest accumulates faster than we can pay it, and the government controls our lives, they can’t blame it on GOP obstruction.

Let’s go the full Greece!

Dexter_Alarius on November 9, 2012 at 2:27 PM

Called this on election night…

… up next, the Supreme Court.

Enjoy…!

Seven Percent Solution on November 9, 2012 at 1:55 PM

This. We will never recover. Our 2 fav words are about to be:
REMEMBER WHEN….

hillsoftx on November 9, 2012 at 2:28 PM

Dexter_Alarius on November 9, 2012 at 2:27 PM

In 2014 I’m voting 100% Democrat right down the line…

PatriotRider on November 9, 2012 at 2:30 PM

PatriotRider on November 9, 2012 at 2:11 PM

I don’t think there was ever going to be any other course of action. The Republican brain trust is already saying we need to move to the left to get the Latino, single mother and Sandra Fluke vote so I fully expect them to cave. I agree with you Comrade PatriotRider!!

Deano1952 on November 9, 2012 at 2:32 PM

PatriotRider on November 9, 2012 at 2:11 PM

I agree… let these greedy gluttonous bastards get every morsel they desire, and let them choke to death on it!

dominigan on November 9, 2012 at 2:33 PM

I want to keep on fighting for conservative beliefs, but I am not seeing any real reasons to do anything, but roll over and let them have their way. This way it is all on them. Why try to preserve a semblance of freedom and take full responsiblity for everything that goes wrong as has been the case with repbulicans for years, rather than just say–elections have consequences and we’ll all deal with them.

In the end the self-reliant among us will do better, assuming we survive obamacare, and I just don’t see a rational reason to fight.

The reward is too small to accept the inevitable blame that will be cast on us for all the failings of the liberal policies we can’t reverse. Where am I wrong here?

earlgrey133 on November 9, 2012 at 2:33 PM

This is Great!!

According to the moronic lore of the Left, evil deregulation caused the 2008 financial crisis – along with the evil Bush tax cuts.

So now with more regulation and the expiring of the Bush tax cuts, everything will be on track for a glorious recovery!!

Is that not the case Leftists?

Galt2009 on November 9, 2012 at 2:35 PM

earlgrey133 on November 9, 2012 at 2:33 PM

You are not wrong…join with me amd others to give them everything but gun control..

PatriotRider on November 9, 2012 at 2:38 PM

This. We will never recover. Our 2 fav words are about to be:
REMEMBER WHEN….

hillsoftx on November 9, 2012 at 2:28 PM

I now know how my grandparents felt when the stupid in this country kept re-electing FDR.

AZfederalist on November 9, 2012 at 2:39 PM

earlgrey133 on November 9, 2012 at 2:33 PM

For right now just live your conservative beliefs which should keep you solvent. I’m going to keep my head down and stay quiet out here while they burn themselves up in the coming orgy of disaster and failure.

Afterwards I can saunter into the wreckage, point and laugh, and say “We told you so, remember this at the next election.”

Bishop on November 9, 2012 at 2:40 PM

Seriously, when do we start shooting? How bad does it have to get?

At what point are We the People going to stand up and shout “NO MORE!”?

Dominion on November 9, 2012 at 2:47 PM

The Founding Fathers would be revolting on every corner! To accept this unconstitutional CRAP, is UN-American and Cowardly! The destruction of the America we all knew and loved, is well on its way and the eSTAB repubs are helping them do it! What are you going to do? I know what I’m going to do and no one wants to fight, but there will be a lot of people who are going to disappear, till the time comes for something to happen. Get ready and get armed! If you don’t, you will only be another victim of Benedict Obama & his plan.
Fight the Obama Enemy media or Kiss the Constitution Goodbye: http://paratisiusa.blogspot.com/2012/09/an-open-letter-to-those-who-should-know.html?spref=tw

God Bless America!

paratisi on November 9, 2012 at 3:05 PM

Biggest winners Tuesday: Woodrow Wilson and FDR.

PattyJ on November 9, 2012 at 3:10 PM

Biggest winners Tuesday: Woodrow Wilson and FDR.

PattyJ on November 9, 2012 at 3:10 PM

I’d say, Stalin, Mao, and Castro.

UltimateBob on November 9, 2012 at 3:35 PM

Let it burn…

Spread the word.

nitzsche on November 9, 2012 at 1:54 PM

Agreed. A number of us at my company also think the repubs should go ahead and let obama implement his entire agenda. Two years of economic and regulatory destruction should about do it.

woodNfish on November 9, 2012 at 4:26 PM

While I hoped for the lesser of evils to happen, I prepared for most evil to happen and it almost did (donks could have taken the HOR). I got out of the market but didn’t short or put because I really hoped the resident at 16,000,000,000,000 Pennsylvania Avenue would be different.

The leftists of the NYT want Obama to go full socialist on the tax hikes. I say we let him. Again, the republicans only need sit on their hands for the fiscal cliff to come. No extensions of Bush tax rates, Obama FICA tax cuts, and no debt ceiling extension. Kicking the can down the road will only insure more wins for the democrat party.

jukin3 on November 9, 2012 at 4:28 PM

Seriously, when do we start shooting? How bad does it have to get?….
Dominion on November 9, 2012 at 2:47 PM

They WANT you to do that. They will then claim absolute moral authority, declare martial law ‘for the safety of the the decent public’.

Starve the beast instead.

Go to the gulches.
Do not give them the benefit of your brains, of your labor.

LegendHasIt on November 9, 2012 at 4:32 PM

The economy is going to go into the toilet. The exit question is: Who will Barry blame?

GarandFan on November 9, 2012 at 7:17 PM

Oh, get over it folks. The GOP LOSERship is all about tweaking things around the edges to help fill the pocketbooks of their supporters. Plus, the LOSERship of both parties and the burrocrats and poobunions all have rock solid private sector golden parachute defined benefit retirement plans.

What could possibly go wrong?

If this isn’t clear to you, then it’s time to look around the curtain of big government and see what it’s all really about. Socialism is a big facade. What is really going on is the installation of a three tiered class system of the Privileged, Collectors, and WorkerBees (Serfs).

The Privileged are the Pols, burros, poob unions and a few assorted others. They live outside market forces, surviving off the life forces of the WorkerBees as collected by the Collector Class.

The Collectors are the high taxed private sector high income folks. The Privileged play the Class Warfare card on them with the happy ignorant support of the WorkerBees. The Collectors in turn, pass their high taxes off to the WorkerBees in the form of higher costs for goods and services, lower wages and more… Gotta love how the WorkerBees are so gullible…

The WorkerBees are the bulk of the private sector who do all of the grunt work under the hood of the private sector. The Privileged take a small frig of what is left over from paying for their own wages and benefits, and hold out the carrot that sometime down the road, they too will get the same Privileged benefits. Suckers….

It’s a great system for generating votes, but not so good at balancing budgets. But then balanced budgets are only important to those few with money…

So it’s all good…

Now get over it, and get away from peeking behind the curtain…

droofus on November 10, 2012 at 1:18 AM

Nor is the CFPB accountable to Congress. The Dodd-Frank Act prohibits the House or Senate from reviewing the agency’s spending authority. The CFPB’s $500 million budget comes entirely from the Federal Reserve’s surplus, out of funds that would otherwise be returned to the Treasury Department and ultimately to the [A]merican taxpayer.

This is true until Congress decides it is no longer true. Which would take about a week if conservatives ever get control of the House and Senate at the same time.

Since that won’t be happening for at least a couple of years….

tom on November 10, 2012 at 5:31 AM

Let it Burn!

I got mine and I’m 64…those that stayed home screwed my children, grandchildren and their children. I won’t be around to clean up the mess, but I hope the pain for them goes to the fourth and fifth generations!

Let it Burn!

belad on November 9, 2012 at 1:57 PM

I’d rather just let the GOP burn….

tom on November 10, 2012 at 5:36 AM