Mr. Lew, what will you do about Dodd-Frank?

Article Highlights

  • Mr. Lew, will you tell the president that a serious review of Dodd-Frank is necessary to get this economy growing?

    Tweet This

  • Dodd-Frank is the harshest regulatory law ever imposed on any industry

    Tweet This

Senate confirmation hearings begin Feb. 13, for Jack Lew, President Obama’s nominee to replace Timothy Geithner as Treasury secretary. What specific questions should the senators ask? Read more

Mr. Lew, after the recession ended in June 2009, the U.S. gross domestic product grew at an annual rate of 2.5 percent until July 2010, when the president signed the Dodd-Frank Act into law. Since then, the annual rate of G.D.P. growth has been 2 percent or less. The reasons for this are not hard to find.

Making significant reforms to Dodd-Frank, so that financial institutions will have some confidence about their future obligations, will be difficult.Dodd-Frank is the harshest regulatory law ever imposed on any industry. To be operational, it requires almost 400 new regulations. Of these, fewer than half have been finalized in the two years since the law’s enactment. The most important regulations, like the Volcker rule and the regulations that will govern the mortgage market, have generated so much conflict among the regulatory agencies that these rules have not been promulgated in final form. When they are finalized, the legal and constitutional challenges already threatened or filed will extend the uncertainties about the rules for many more years.

If you are confirmed as Treasury secretary, the health of the U.S. economy will be your principal concern. The long-term unemployment this nation has endured since the end of the recession in June 2009 has not only contributed to our deficit and debt, but now threatens to make large numbers of Americans unemployable because they have lost the work skills that our innovative economy requires. This is a serious crisis, and seems to have its source in the Dodd-Frank Act. It’s time to consider whether Congress went too far.

Clearly, making significant reforms to Dodd-Frank, so that financial institutions will have some confidence about their future obligations, will be difficult. The president sees this as a major success of his first term. But in light of its adverse effects on the economy, shouldn’t you be prepared to tell the president that a serious review of Dodd-Frank is necessary?

Peter J. Wallison is the Arthur F. Burns fellow at AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Peter J.
Wallison

What's new on AEI

Love people, not pleasure
image Oval Office lacks resolve on Ukraine
image Middle East Morass: A public opinion rundown of Iraq, Iran, and more
image Verizon's Inspire Her Mind ad and the facts they didn't tell you
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Event Registration is Closed
Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.