Tag Archives: Financial Crisis of 2008

Wise Advice From The People Who Know

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Yesterday Investor’s Business Daily posted an editorial about the Consumer Financial Protection Bureau. This bureau was part of the Dodd-Frank legislation aimed at taking the focus away from the actual cause of the financial meltdown of 2008.

For those of you who are new to this website, the following video is the best analysis of the financial crisis of 2008 available. I have embedded it because at some point YouTube will probably take it down.

Dodd-Frank put a stranglehold on business growth and punished people who were not responsible for the crisis. However, those who like big government and wanted more power pushed the narrative that resulted in Dodd-Frank and the Consumer Financial Protection Bureau.

The current head of the Consumer Financial Protection Bureau, Richard Cordray, has announced that he will resign at the end of November. Investor’s Business Daily suggests that instead of naming a replacement, President Trump should simply shut the agency down.

The editorial at Investor’s Business Daily reminds us of some of the history of the agency:

An October 2016 Supreme Court ruling found CFPB’s structure to be unconstitutional, a violation of the separation of powers in the nation’s supreme law.

One element of the high court’s decision was that Cordray could only be fired by the president for cause — making it very hard to get rid of even an incompetent in the job. Worse, by funding the CFPB from the Federal Reserve, not Congress, the agency lay just outside the direct oversight of Congress. It had massive power over finance in the U.S. economy, with little or no accountability. Cordray did little or nothing to remedy this.

“We are long overdue for new leadership at the CFPB,” said House Financial Services Committee Chairman Jeb Hensarling of Texas. “The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly with lower and middle incomes.”

The editorial concludes:

From nothing in 2010, the agency now employs more than 1,600 people, with $647 million in budgeted spending last year and another $525 million in civil penalty fines — often collected without any due process for those who were forced to pay up.

Last January, Michael McGrady wrote on The Daily Caller website, “Like every new government program, (CFPB) became a corrupt political bargaining chip in Obama’s administration with the sole mission to assert government supremacy over the economy.” Nothing has changed since then. As we’ve said before, shut it down.

Think of the savings for taxpayers!

Overregulation And The Little Guy

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The Wall Street Journal posted an editorial this morning about the 2010 Dodd Frank law. The law is a mass of overregulation put in place after the financial crisis of 2008 that actually does nothing related to the cause of the financial crisis of 2008. (If you still believe the mainstream media about the financial meltdown of 2008, I suggest you watch the this video.) Dodd Frank is sheer legislative mush that accomplished nothing, written and sponsored by some of the people who caused the problem in the first place. Well, wait a minute, it actually did accomplish something.

The Wall Street Journal reports:

Liberals like Sen. Elizabeth Warren (D., Mass.) are treating the 2010 Dodd-Frank financial law as holy writ because she says it punishes the big banks. But then why is Lloyd Blankfein so content? On Tuesday at an investor conference, the Goldman Sachs CEO explained how higher regulatory costs are crushing the competition.

“More intense regulatory and technology requirements have raised the barriers to entry higher than at any other time in modern history,” said Mr. Blankfein. “This is an expensive business to be in, if you don’t have the market share in scale. Consider the numerous business exits that have been announced by our peers as they reassessed their competitive positioning and relative returns.”

The real problem with overregulation is that it leads to crony capitalism. Dodd Frank is another example of the government passing laws that make it harder for the average American to create and run a business.