“…But perhaps more ominously than making us either less prosperous or less stable, Dodd-Frank has also made us less free. Dodd-Frank moves us away from the equal protection offered by the impartial rule of law towards the unequal and victimizing rule of political bureaucrats…

…It represents a breathtaking, unconstitutional outsourcing of legislative powers to the executive branch, with the Orwellian-named Consumer Financial Protection Bureau (CFPB) and the Financial Stability Oversight Council (FSOC) the two prime beneficiaries. . . .I fear Dodd-Frank’s ultimate purpose is to eventually render effective control of our capital markets to the state; to turn large money-center banks into functional utilities, so that the state can allocate credit within our economy to politically favored classes. In other words, to take over the commanding heights of our economy. This must not be allowed to stand.”, “Notable & Quotable: Hensarling on Dodd-Frank”, The Wall Street Journal, June 8, 2016

“The response by Sen. Warren and other liberal Democrats is that this is “a gift to big banks/Wall Street”. But I predict they don’t support Rep. Jeb Hensarling’s proposal. Why? Big institutions love big regulation, because they act as a barrier to entry, to prevent newer and smaller competitors from being successful. Name one big bank that has been started in the last ten years? You can’t. There are none. Massive regulation prevents competition. Hensarling is right when he says: “When they voted for it, supporters of Dodd-Frank told us it would “promote financial stability,” “end too big to fail,” and “lift the economy.” None of this has come to pass.Today the big banks are bigger and the small banks are fewer. In other words, even more banking assets are now concentrated in the so-called “Too Big to Fail” firms. Pray tell, how does this promote financial stability?” Thank you Congressman for telling the truth and leading this courageous and righteous fight.”, Mike Perry, former Chairman and CEO, IndyMac Bank

Opinion

Notable & Quotable: Hensarling on Dodd-Frank

‘I fear Dodd-Frank’s ultimate purpose is to eventually render effective control of our capital markets to the state.’

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Rep. Jeb Hensarling at the Economic Club of New York, June 7. PHOTO: BLOOMBERG NEWS

From remarks as prepared for delivery by Rep. Jeb Hensarling (R., Texas) at the Economic Club of New York on June 7 outlining a Republican plan to replace the Dodd-Frank law:

When they voted for it, supporters of Dodd-Frank told us it would “promote financial stability,” “end too big to fail,” and “lift the economy.” None of this has come to pass.

Today the big banks are bigger and the small banks are fewer. In other words, even more banking assets are now concentrated in the so-called “Too Big to Fail” firms. Pray tell, how does this promote financial stability?

Dodd-Frank codified into law Too Big to Fail and taxpayer-funded bailouts. This is bad policy and worse economics. It erodes market discipline and risks even further bailouts. It becomes a self-fulfilling prophecy, helping make firms bigger and riskier than they otherwise would be. . . .

Additionally, Dodd-Frank’s Volcker Rule and provisions of Basel have led to dramatic bond market illiquidity and volatility. Many believe this could well be the source of the next financial panic. When it comes to systemic risk, regulatory micromanagement is no substitute for market discipline.

Next, instead of lifting our economy as Dodd-Frank’s supporters claimed it would, it has made us less prosperous. Bank small business lending has dropped since Dodd-Frank was passed—stifling entrepreneurship and causing economic growth to suffer. . . .

But perhaps more ominously than making us either less prosperous or less stable, Dodd-Frank has also made us less free. Dodd-Frank moves us away from the equal protection offered by the impartial rule of law towards the unequal and victimizing rule of political bureaucrats.

It represents a breathtaking, unconstitutional outsourcing of legislative powers to the executive branch, with the Orwellian-named Consumer Financial Protection Bureau (CFPB) and the Financial Stability Oversight Council (FSOC) the two prime beneficiaries. . . .

I fear Dodd-Frank’s ultimate purpose is to eventually render effective control of our capital markets to the state; to turn large money-center banks into functional utilities, so that the state can allocate credit within our economy to politically favored classes. In other words, to take over the commanding heights of our economy.

This must not be allowed to stand.

Posted on June 9, 2016, in Postings. Bookmark the permalink. Leave a comment.

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