The further to the left or the right you move, the more your lens on life distorts.

Friday, April 20, 2012

Too Big

A few days ago, President Obama criticized Republicans who want to repeal “financial reform” legislation, commonly and named Dodd-Frank. Ironically, the Dodd-Frank bill is named after two legislators who blocked efforts to understand the danger facing the nation in the early part of the last decade and therefore have more than a little culpability for the financial crisis in 2008. Neal Bootrze , a conservative blogger, examines the “success” of Dodd Frank:
Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the nation’s credit markets seized up and required unprecedented bailouts by the government. Five banks -- JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc., Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc. -- held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to central bankers at the Federal Reserve. Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy.
Like most other Obama initiatives, Dodd-Frank is an epic fail. In the year after the crash, Barack Obama had a unique opportunity (he had majorities in both house of Congress) to implement true banking and financial reforms, including the breakup of banks that were too big to fail. But because he had raised millions from Wall Street to support his campaign, he did little if anything to reign in the financial institutions. And now he states: “Anyone who is pledging to roll back Wall Street reform, Dodd-Frank, would also roll back this vital consumer protection with it.” This has become a recurring theme with the President as candidate. Rather than honestly touting his meager accomplishments, he criticizes his opponents and their effort to unwind his mistakes. That would be reasonable if his criticism was honest, factual, and constructive. It is not.