Thread: A bad week for the Democrats in The Economist

Excessive regulation: Tangled up in green tape | The Economist

The Dodd-Frank act: Too big not to fail | The Economist

United States' economy: Over-regulated America | The Economist

http://www.economist.com/node/21547772

Keep in mind that this magazine has panned the Tea Party and most of the Republican nominees...

Here are a few choice quotes:

"The law that set up America’s banking system in 1864 ran to 29 pages; the Federal Reserve Act of 1913 went to 32 pages; the Banking Act that transformed American finance after the Wall Street Crash, commonly known as the Glass-Steagall act, spread out to 37 pages. Dodd-Frank is 848 pages long. Voracious Chinese officials, who pay close attention to regulatory developments elsewhere, have remarked that the mammoth law, let alone its appended rules, seems to have been fully read by no one outside Beijing (your correspondent is a tired-eyed exception to this rule). And the size is only the beginning. The scope and structure of Dodd-Frank are fundamentally different to those of its precursor laws, notes Jonathan Macey of Yale Law School: “Laws classically provide people with rules. Dodd-Frank is not directed at people. It is an outline directed at bureaucrats and it instructs them to make still more regulations and to create more bureaucracies.” Like the Hydra of Greek myth, Dodd-Frank can grow new heads as needed."

"The EPA itself estimates that meeting the new mercury standards will cost businesses $10 billion a year. Electricity prices, it reckons, will initially rise by 3% a year as a result. It puts the cost of the interstate air pollution rule at $2.4 billion a year, and of the ozone rule (if it is ever implemented) at $20 billion a year at least. Industry groups, naturally, have far higher estimates of the costs."

"Take the transformation of 11 pages of Dodd-Frank into the so-called “Volcker rule”, which is intended to reduce banks’ ability to take excessive risks by restricting proprietary trading and investments in hedge funds and private equity...In November four of the five federal agencies charged with enacting this rule jointly put forward a 298-page proposal which is, in the words of a banker publicly supportive of Dodd-Frank, “unintelligible any way you read it”. It includes 383 explicit questions for firms which, if read closely, break down into 1,420 sub questions, according to Davis Polk, a law firm. The interactive Volcker “rule map” Davis Polk has produced for its clients has 355 distinct steps."

"other parts of the Dodd-Frank apparatus will smother financial institutions in so much red tape that innovation is stifled and America’s economy suffers. Officials are being given the power to regulate more intrusively and to make arbitrary or capricious rulings. The lack of clarity which follows from the sheer complexity of the scheme will sometimes, perhaps often, provide cover for such capriciousness.

For example, the new CFPB will have latitude to determine what type of financial products can be provided to which consumers and at what cost, as well as the right to pursue institutions for acting in an “abusive” fashion (a term with no legal definition). Requirements for “living wills” that encompass hypothetical business plans have to be pored over by regulators; “stress tests” insert government assumptions deep into the decisions banks make about their capital. Such tests are not new to Dodd Frank. But the befuddling form the act gives such ideas unintentionally opens a path to much more state interference."

Long story short, Dodd-Frank is a major instrument for the growth, influence and power of Federal government. After all, as the bill continues to broadly affect the nation, what else is there to address those many new issues and demands but for more federal involvement?

On second thought, I'm not sure why the Economist or anyone else might think this is a hit on Democrats. This growing behemoth is right up the new Progressive Democrat patry's wheel house.

Originally Posted by Telecaster

Long story short, Dodd-Frank is a major instrument for the growth, influence and power of Federal government. After all, as the bill continues to broadly affect the nation, what else is there to address those many new issues and demands but for more federal involvement?

On second thought, I'm not sure why the Economist or anyone else might think this is a hit on Democrats. This growing behemoth is right up the new Progressive Democrat patry's wheel house.

The Economist's statement of purpose is to be a moderate voice. They tend to whack all the extremists. But it's pretty solid from a journalistic perspective. Lots of facts and quotes and hardly any glossy, generalized talking points.

I'm not sure The Economist is really a moderate voice. I actually supported the Second Gulf War in part because The Economist thought it was a good idea...not sure I trust them after that. But I saw the first article about regulation and it made sense. Not sure I agree with all its prescriptions, but its main thrust--which is about SIMPLIFYING regulations rather than removing because business finds them a block to profit, makes sense. The idea of engaging an independent oversight group--not the advice of industry lobbyists--also makes sense. But then, who would be the independent group and to whom would they be beholden?

Originally Posted by Rasselas

I'm not sure The Economist is really a moderate voice. I actually supported the Second Gulf War in part because The Economist thought it was a good idea...not sure I trust them after that. But I saw the first article about regulation and it made sense. Not sure I agree with all its prescriptions, but its main thrust--which is about SIMPLIFYING regulations rather than removing because business finds them a block to profit, makes sense. The idea of engaging an independent oversight group--not the advice of industry lobbyists--also makes sense. But then, who would be the independent group and to whom would they be beholden?

Why not just reimpose Glass-Steagall as a starting point?

Originally Posted by Telecaster

Long story short, Dodd-Frank is a major instrument for the growth, influence and power of Federal government. After all, as the bill continues to broadly affect the nation, what else is there to address those many new issues and demands but for more federal involvement?

On second thought, I'm not sure why the Economist or anyone else might think this is a hit on Democrats. This growing behemoth is right up the new Progressive Democrat patry's wheel house.

especially noted is that in that act Freddie and Frank are excluded.

Originally Posted by Rasselas

I'm not sure The Economist is really a moderate voice. I actually supported the Second Gulf War in part because The Economist thought it was a good idea...not sure I trust them after that. But I saw the first article about regulation and it made sense. Not sure I agree with all its prescriptions, but its main thrust--which is about SIMPLIFYING regulations rather than removing because business finds them a block to profit, makes sense. The idea of engaging an independent oversight group--not the advice of industry lobbyists--also makes sense. But then, who would be the independent group and to whom would they be beholden?

See what a serious amount (constant never ending barrage) of negativity can spurn. Even the common sense gets lost in the dust.

Go to the newest thread by me in the economy section. After reading it you must come to one of two conclusions. 1) the fed is getting ready for something real bad. 2) The fed is making it real bad.

Originally Posted by kmiller1610

Why not just reimpose Glass-Steagall as a starting point?

From your fingers to God's computer screen.

Originally Posted by carpe diem

(constant never ending barrage) of negativity

In the production of this you, sir, are an expert.