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

Making Ryan's tax plan smarter
image The teacher evaluation confronts the future
image How to reform the US immigration system
image Inversion hysteria
AEI on Facebook
Events Calendar
  • 01
    MON
  • 02
    TUE
  • 03
    WED
  • 04
    THU
  • 05
    FRI
Wednesday, September 03, 2014 | 9:00 a.m. – 10:30 a.m.
From anarchy to Augustus: Lessons on dealing with disorder, from Rome’s first emperor

We invite you to join us for two panel discussions on how Augustus created order from chaos 2,000 years ago, and what makes for durable domestic and international political systems in the 21st century.

Wednesday, September 03, 2014 | 12:00 p.m. – 1:30 p.m.
Multiple choice: Expanding opportunity through innovation in K–12 education

Please join us for a book launch event and panel discussion about how a marketplace of education options can help today's students succeed in tomorrow's economy. Attendees will receive a complimentary copy of the featured book.

Thursday, September 04, 2014 | 12:00 p.m. – 1:30 p.m.
How conservatives can save the safety net

Please join us for a luncheon event in which our panel will discuss what conservatives can learn from how liberals talk and think about the safety net and where free-market economics, federalism, and social responsibility intersect to lift people out of poverty.

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