Washington is full of unintended consequences. The city itself was meant to be a compromise between the Northern and Southern states — a spot in the middle. And where did that lead Pierre L’Enfant to design the capital city? A swampy marsh ripe with mosquitoes. See? It’s been that way since the beginning.
So it shouldn’t shock anyone that a law designed to avoid another financial crisis is causing a disruption of its own: Dodd-Frank. If you’re not familiar with my feelings about this contorted, monster of a legislative nightmare, you can visit one of the evaporating towns of middle America; or click here.
Thanks to Donald Trump, Congress is moving quickly towards removing this poorly thought-out relic of regulation. Small towns and farmers can’t rejoice yet — a lot of damage has already been done.
However, a brighter future is on the horizon. Even if you don’t agree with Trump, most Americans tend to agree with his views of bank regulation. So get on board, there’s plenty of room on this bandwagon.
Why middle America matters
Whether you believe it or not, middle America got thrashed by Dodd-Frank. Small town banks paid the sins for Lehman Brothers. While CEOs in New York got golden parachutes, farmers got denied loans.
You may have never thought, or cared, about farmers. While they represent a small part of the population, they feed us. You know that, so I won’t harp on it. Farmers require loans for equipment, mortgages, supplies, etc.
How does Dodd-Frank play in? It’s a huge impact. Forbes said roughly 44% of farmers use a small community bank. However, in the last decade, the number of those banks has shrunk — while the big banks continue to expand.
The main culprit? Regulation costs. Big banks can afford them. Small banks are left in the cold and their communities go with them. They weren’t even the problem banks to begin with!
I use the farmers as an example, but there are many others hurt by the disappearing small-town banks. You know something? I am not the only one who noticed.
America wants a change
If I ever read a study or article that showed that a majority of Americans trusted Wall Street, I would be shocked. So when I stumbled across this study from the Cato Institute, I ignored it at first.
Then I read through the body of the article. Of course people distrust Wall Street, but did you know that same number of people distrust government regulators? Now, that was refreshing to read.
Here’s how the study broke down. An impressive 48 percent of Americans had “hardly any confidence” in both Wall Street or government regulations.
It’s the other responses that really drove the point home. Check them out:
- 74 percent of Americans believe regulations miss their purpose
- 75 percent believe the regulators’ main focus is their own jobs, not helping America
- 80 percent believe politics plays into regulators’ decision-making processes
It’s like a mirror image of how Americans feel about Wall Street. Just replace regulations with investments and regulators with investors. It’s the same idea.
Not only that, the Cato study goes on to explain that fewer Americans actually want regulation. Then the study hammers away at my point. Just like me, 72 percent of Americans believe Dodd-Frank will do nothing to prevent a future crisis.
There you have it. Evidence that Dodd-Frank killed small town banks and most Americans believe it will do nothing to stop the next crisis. It was a well-intentioned piece of legislation that has done more harm than good.
Across the board, Americans agree: The way to secure the economy isn’t through more regulation. In the same way that Wall Street is flawed by the avarice of man, government jobs are as well.
The average American notices that. We over-regulated after the Great Recession. There isn’t anyone to blame. It was a natural reaction.
However, we’ve reached the point where we need to set loose some of the restrictions that keep the economy from flying.
There will be another financial crisis. History tells us there always is one around the corner. Dodd-Frank would do nothing to stop it. I know that, you know that, and America knows that.
Think about that as the D-F law gasps its final breaths on the floor of Congress this month. It’s time to give middle America a shot in the arm, courtesy of President Trump.
Article last modified on April 12, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: It’s Time to Let Dodd Frank Go, And America Will Thank Trump For It - AMP.
Article last modified on April 12, 2018. Published by Debt.com, LLC .