In the summer of 2010, Congress passed the Dodd-Frank bill,
better known by its misnomer, “financial reform.” This bill,
which exceeds 2,300 pages, will cost $30 billion and take
many years to implement. Unfortunately, it does little to
shield Main Street from the alleged risks of Wall Street.
This move for comprehensive reform, or really, deform, stems
from the concerns of the American people following their
bailouts of Wall Street with TARP (Toxic Assets Relief Program)
to prevent the forecasted collapse of our economy. The
sweeping legislation posed new restrictions and created new
regulations for many sectors of the financial industry- from
credit card companies to massive banks to accounting firms.
Like many things in politics, however, the devil is in the
details. While Democrats sold the measure as a means
of the government playing watchdog on behalf of the
American people, the Dodd-Frank bill actually compounded
the problems facing our nation’s economy. This financial
overhaul created a protected group of “too big to fail”
firms that allows the federal government the power to bail
them out whenever “deemed” necessary. Additionally, the
bill would allow the federal government to seize private
property without judicial review if the owner keeping his or
her rightful property results in “serious adverse effects on
financial stability.” The bill also adds $20 billion in taxes for
the next ten years.
What’s worse: the former chief of the FDIC, Bill Isaac, says
that this bill does nothing to prevent a future financial
crisis, the very concern that Democrats say the legislation
was meant to address. It also did not include provisions
to investigate Fannie Mae and Freddie Mac, the two
government entities whose failures cost the American
taxpayers more than $6 trillion. It’s also worth mentioning
that the bill includes special protection for Big Labor and
perks for President Obama’s supporters.
We must repeal financial regulatory “deform.” We must enact
real reforms that protect the roots of our economic system.
We must not compromise them with excessive regulation
and the federal government’s “pay-to-play” politics.
The federal government has amassed incredible amounts
of control through its ability to regulate everything from
emissions to food to businesses. Certainly, some regulation
is necessary to protect American consumers and taxpayers,
but excessive regulation has driven up the price of the goods
and services we want, need and desire.
According to the Heritage Foundation, burdensome
regulations have increased at an alarming rate. In 2010
alone, Washington forced 43 major new regulations on us.
The cost of complying with these additional measures is
more than $26.5 billion, which according to Heritage, is “far
more than any other year for which records are available.”
Experts anticipate that with health care “deform,” financial
regulatory “deform” and other liberal agenda items, next
year’s regulatory costs will skyrocket farther.
We pay for regulations with every bite of food we eat, with
every drop of gasoline we put in our cars and with every
good or service we obtain. While we might not immediately
recognize the impact of such drastic regulations, they are
laced tightly in the cost of everything we buy. In fact, the
Small Business Administration estimates that complying
with regulation costs around $1.75 trillion annually, which is
actually twice as much as all revenue from individual income
taxes last year.
Alleviating the burdens of cumbersome regulation would be
an immediate boost for our weakened economy. It would
signal to businesses and investors that the government
intends to maintain conditions that allow for them to thrive,
not to bog them down with additional costs they must
inevitably pass on to their consumers. No one is arguing
for lead-based paint in toys for kids or unsafe food. We just
want reasonable regulations that cut down on bureaucracy
and help businesses succeed. And ultimately, the free
market, aided in part by the watchful eyes of investors and
consumers, will regulate itself.