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Frank-Dodd fails first test
Waterbury Republican-American ^ | August 4, 2010 | Editorial

Posted on 08/04/2010 10:53:06 AM PDT by Graybeard58

"And speaking of Countrywide, how can a bill written by Chris Dodd and Barney Frank possibly solve anything, when they were right in there ... right there with the collapse at every level in the first place? Isn't this a little like asking Mel Gibson to write your company's rules on anger management and racial tolerance?" — commentator Glenn Beck, July 22

Corrupt Democratic Sen. Christopher Dodd and Rep. Barney Frank, D-Mass., indeed wrote the financial-industry-overhaul bill that President Obama has signed into law. Among the bill's most grievous errors, it rewarded the worst and most asleep-at-the-switch actors in the collapse of the housing and financial industries — the Federal Reserve, the Treasury and the Securities and Exchange Commission — with broad new powers that in all likelihood will weaken the financial system and stunt economic growth. And as the enormous cost trickles down, ordinary Americans will pay in any number of ways, including via lower returns on their retirement savings, lost raises and fringe benefits, higher taxes, and pricier goods and services.

Most remarkably, Sen. Dodd and Rep. Frank left the money-hemorrhaging government-sponsored enterprises at the heart of the crises, Fannie Mae and Freddie Mac, and their homownership-is-a-right philosophy to fester, furthering the risk-taking that spawned the Chris Dodd Bear Market and Recession. This was no oversight. Sen. Dodd even threatened to filibuster his own bill if his colleagues tried to amend it to include a comprehensive Fannie/Freddie fix. At stake are the trillions in worthless mortgages that Fannie and Freddie bought, on orders from Housing and Urban Development bureaucrats and Sen. Dodd, Rep. Frank and other members of Congress, for which taxpayers now are on the hook.

Now, where government "reforms" go, unintended consequences must follow, especially when those reforms consume more than 2,000 pages that go largely unread before members vote. It's rare, however, when unintended consequences happen as instantly as they did with Frank-Dodd.

As a favor to the trial lawyers, Sen. Dodd and Rep. Frank set it up so bond-rating firms can be sued if they get their ratings wrong. That can happen in a number of ways, including sponsors overstating assets to or withholding vital financial data from the rating firms. Essentially, Dodd-Frank holds bond houses liable for untold billions when companies deceive them.

So on the first day the new rules went into effect, the firms refused to let their ratings be used, effectively scuttling new bond issues and freezing the $1.4 trillion market in asset-backed securities. To get the markets moving again, unelected SEC bureaucrats essentially overruled Congress. For the next six months, they will allow bond sales without benefit of credit ratings, a rule that poses substantial risk to bond buyers. Come January, however, absent highly unlikely changes to Dodd-Frank, the SEC and the bond houses will be at loggerheads again.

What else did Frank-Dodd get wrong? Plenty, probably, solely because Sen. Dodd and Rep. Frank were tasked with devising a big-government fix for the big-government mess they created.


TOPICS: Crime/Corruption; Editorial; Government
KEYWORDS: barneyfrank; chrisdodd; dodd; frank

1 posted on 08/04/2010 10:53:08 AM PDT by Graybeard58
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To: Pining_4_TX; jamndad5; Biggirl; rejoicing; rightly_dividing; iopscusa; kalee; Lovergirl; ...

Ping to a Republican-American Editorial.

If you want on or off this ping list, let me know.


2 posted on 08/04/2010 10:54:16 AM PDT by Graybeard58 (Nobody reads tag lines)
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To: Graybeard58

Dodd-Frank’s backdoor stimulus?

Nope. Not touching that one.


3 posted on 08/04/2010 10:55:41 AM PDT by agere_contra (...what if we won't eat the dog food?)
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To: agere_contra
I'll take a "crack" at it:
Photobucket Hey, that's a TWOFER.

4 posted on 08/04/2010 11:02:33 AM PDT by Dick Bachert (The upcoming election is the most important in our lifetimes!!! BE THERE!!!!!!!)
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To: Graybeard58

mortgagate


5 posted on 08/04/2010 11:28:11 AM PDT by FrankR (It doesn't matter what they call us, only what we answer to....)
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To: Graybeard58

bump


6 posted on 08/04/2010 12:22:21 PM PDT by lowbridge (Rep. Dingell: "Its taken a long time.....to control the people.")
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To: Graybeard58

Thanks for the Fox writing the rules for the Henhouse ping Graybeard.


7 posted on 08/04/2010 1:28:41 PM PDT by rockinqsranch (Liberalism draws criminals as excrement draws flies. Liberals are only good for bait.)
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To: Dick Bachert

Bada boo,m


8 posted on 08/04/2010 2:18:11 PM PDT by CPT Clay (Pick up your weapon and follow me.)
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To: Graybeard58

If there was any justice in the world, these two criminals would be rotting in jail for the rest of there lives, along with Raines and Gorelick.


9 posted on 08/04/2010 4:11:17 PM PDT by Hoosier-Daddy ( "It does no good to be a super power if you have to worry what the neighbors think." BuffaloJack)
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To: Graybeard58

And some people still wonder why companies are increasing their cash reserves at this time rather than investing and expanding...it could be a matter of survival - with things like this and the ‘healthcare’ bill...


10 posted on 08/04/2010 8:10:52 PM PDT by Republican Wildcat
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