Saturday, November 13, 2010

Finance Reform Created by Chris Dodd and Barney Frank Needs Major Reforming

IBD Editorials Rolling back FinReg (Finance Regulation), which was based on a false assumption that Wall Street caused the financial crisis, is just as critical as repealing or defunding ObamaCare.

Republicans ought to go through Frank's monstrosity, page by page, and strip out all its jobs-killing and capital-killing provisions — along with the new race-based mandates Democrat Rep. Maxine Waters stuck in. Such politically mandated lending
is what got us into this mess in the first place.

Incoming House Financial Services Committee Chairman Spencer Bachus, R-Ala., promises to do just that. He argues that the Dodd-Frank Wall Street Reform and Consumer Protection Act puts Wall Street at a disadvantage against London, Hong Kong and other financial centers. It also constricts capital, he says in a recent letter to the Treasury chief, "hobbling the provision of credit necessary for economic recovery in the U.S."

Asked about GOP talk of repealing FinReg, White House spokesman Robert Gibbs argued the new banking rules are "what people want," and they won't let Republicans water them down. But the Americans didn't bargain for 1,000 fewer banks. Or a Consumer Financial Protection Bureau headed by Harvard radical Elizabeth Warren, who wants to cap interest rates and nationalize banks.

Gibbs may point to polls showing a majority of Americans blame Wall Street bankers for the crisis. But that's merely an echo of the false narrative spun by the White House and Democrat Congress about what caused it. The historic record clearly shows that Wall Street merely helped inflate a housing bubble caused by government social policy designed to boost minority homeownership.

Since FinReg was aimed at the wrong target — and completely misses Fannie and Freddie and the affordable housing policies that drove them into the subprime securities market — it deserves to be dismantled.

Since the Subprime Scandal helped cascade the economic downturn, the media hasn't made it as the narrative. Instead, the Democrats blamed banks and Wall Street. I'm glad Barney Frank's replacement, Congressman Spencer Bachus, R-Ala., will head the House banking panel. Buchus vowed to dismantle what's been done in the name of financial reform. The time is now to clean up the mess created by Democrats.