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Dodd-Frank: All Of It Is Awful, And So All Of It Needs to Go


US President Barack Obama signs the Dodd
Saul Loeb/Getty Images
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President-elect Donald Trump will be president in less than 24 hours because he led much more than a simple political campaign. As he often said at his rallies: “This is not just crowds gathered - this is a movement.”

What it was and is - is a revolution. A Reality Revolution. For decades and decades in Washington, D.C., members of both political Parties have time and again thrown at us the Groucho Marx quote: “Who are you going to believe, me or your lying eyes?”

DC’s denizens have given us demonstrable failure after demonstrable failure - while hailing each and every one of them as a “success.” (This sort of profound, prolonged delusion usually results in years of therapy, massive doses of medication - or both. In DC, it results in mass reelection.)

Social Security and Medicare - are $222 TRILLION short. But DC blithely hails them both as “successes.”

There is thankfully-outgoing-President Barack Obama’s Obamacare - DC-woefully-misnamed “The Patient Protection and Affordable Care Act.” We were repeatedly told Obamacare would lower premiums by $2,500 per-family-per-year - and allow you to keep your doctors and plans.

Instead, premiums and deductibles both have skyrocketed - and tens of millions of Americans have lost their plans and doctors. Yet somehow, in true Anti-Reality fashion: “Five Years In, Obama Taunts GOP Over Obamacare's Success.”

In November, We the People FINALLY responded to all of this Groucho Marx-esque nonsense with Mark Twain: “Denial ain’t just a river in Egypt.” Enter Trump.

Now let us peer through the Reality prism - at Dodd-Frank. Bizarrely misnamed “Dodd–Frank Wall Street Reform and Consumer Protection Act.” (When DC is looking to “protect” you - grasp tightly your head, keister and wallet.)

Dodd-Frank, we were told, would fix the problem of banks that are “too big to fail.”  Hollywood even made a TV movie of same name - to allegedly tell the story of the 2008 global financial collapse that Dodd-Frank was passed to ensure never again happened.

Did Dodd-Frank fix “too big to fail?” Of course not - this is DC, after all: “Five Years After Dodd-Frank, Worry of ‘Too Big to Fail’ Still Persists.” What it created - is what massive government always creates: “too small to survive.”

Only big things can absorb the blows from government’s sledgehammers. Only big things are able to navigate their way through government’s regulatory mazes. It’s the little ones that get pulverized and lost: “Three Charts That Show How Dodd-Frank Is Killing Small Banks.”

Of course, in the tiny, warped confines of DC: “Dodd-Frank is a Success.”

Out here in Reality, Dodd-Frank is yet another DC catastrophe - and it needs to go.  ALL of it.  On which, by the way, Trump campaigned: “Dodd-Frank has been a disaster….We have to get rid off Dodd-Frank.”

But this remains DC. So of course there is a debate underway to retain a part of the ridiculousness - the Durbin Amendment: “(P)assed as part of the Dodd-Frank financial reform legislation in 2010, (it) required the Federal Reserve to limit fees charged to retailers for debit card processing.”

Oh excellent - price controls.  Because they always work out SO well: “Complex price controls invite gaming of the system….” Not by the small companies - they get swamped and go under.  It’s the big companies that game the system:

Durbin Amendment Rewards Retailers $36 Billion in Additional Profits, But Provides No Relief to Consumers: “(A) recent December 2015 Federal Reserve Bank of Richmond study…notes that few merchants are found to reduce prices or debit restrictions as debit costs decrease. In another survey 92% of the nearly 2000 consumers questioned reported that prices rose or stayed the same over the previous year.”

Get that? Dodd-Frank’s Durbin Amendment is supposed to lower prices for consumers - via the government (unconstitutionally, I might add) mandating lower credit card fees.

But no one breaks the law of unintended consequences more than government.  No one understands less how markets and market forces work.

Everyone on the planet - save for government bureaucrats - could see that the Durbin Amendment would play out just as the Durbin Amendment played out.  That it really was just a DC-cronyism massive pickpocketing of banks - to hand the cash to retailers.  So - another shocker - the banks pass those costs on to…We the Consumers.

In short, the Durbin Amendment is government forcing us - to hand tens of billions of dollars to the likes of Gucci, Macy’s and Saks. Big companies gaming the system - We the Little People paying the price.

So this will come as a galloping shock to one and all: “Retailers Fight Effort to Repeal Durbin Amendment.” Because when you’re a DC cronyism recipient - it’s what you do.

But if we’re really, truly going to “Drain the swamp” - we have to stop listening to the cronies, and end the cronyism. ALL of it.

So we need to repeal Dodd-Frank. ALL of it. Up to and including the Durbin Amendment.