Barney Frank on Dodd-Frank Regulations: ‘We’ve Got to Learn How to Live with It’
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) called the Dodd-Frank Act the “absolute epitome of Washington greed,” which he argued has made the U.S. “less financially stable.”
Former Sen. Chris Dodd (D-Conn.) and former Rep. Barney Frank (D-Mass.) defended the bill during an event marking 5 years since the bill was signed into law.
“For those who want Washington to be the final arbiter of acceptable financial risk in our economy, they should first consider whether Washington is even competent to manage risk. A review of the federal government’s track record in this area does not inspire confidence,” Hensarling said at the American Enterprise Institute on the bill’s fifth anniversary.
“The National Flood Insurance Program is $24 billion underwater and, yes, the pun is intended. The Pension Benefit Guaranty Corporation is running a total asset deficit of approximately $62 billion and fairly recently the Federal Housing Administration received their first taxpayer bailout courtesy of the Obama administration,” he added.
Hensarling said the greed of Washington is worse than the greed of Wall Street.
“It is an article of faith on the Left that it was Wall Street greed that really caused the crisis. My question to them is when hasn’t there been greed on Wall Street? How could that possibly be the determining factor? There is a much greater threat and that is Washington greed: the greed of the ruling elite for more power over an ever increasing share of our economy, our lives, and our liberty -- and ladies and gentlemen, Dodd-Frank is the absolute epitome of Washington greed,” he said.
Hensarling argued that Dodd-Frank’s architecture has made the country “less financially stable,” pointing out that big banks are bigger since the bill was signed into law.
“The small banks are fewer but because Washington can control a handful of large established firms much easier than many small and zealous competitors, this is likely an intended, not unintended consequence of the Act. Dodd-Frank concentrates greater assets in fewer institutions,” he said. “It codifies into law ‘Too Big to Fail’ and taxpayer-funded bailouts.”
Sen. Dodd and Rep. Frank participated in a discussion about the effects of the law at the Newseum.
“Today, clearly, we are in far better shape than we were,” Dodd said at the event marking the bill’s fifth anniversary. “Of all the economies in the world, the one that is doing the best and the most stable is ours and it wasn’t a miracle, it was because of hard work that we put in place here.”
Frank addressed Hensarling directly.