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

Rebuilding American defense: A speech by Governor Bobby Jindal
image Smelling liberal, thinking conservative
image Stopping Ebola before it turns into a pandemic
image All too many reasons for pessimism about Europe
AEI on Facebook
Events Calendar
  • 20
    MON
  • 21
    TUE
  • 22
    WED
  • 23
    THU
  • 24
    FRI
Monday, October 20, 2014 | 2:00 p.m. – 3:30 p.m.
Warfare beneath the waves: The undersea domain in Asia

We welcome you to join us for a panel discussion of the undersea military competition occurring in Asia and what it means for the United States and its allies.

Event Registration is Closed
Tuesday, October 21, 2014 | 8:30 a.m. – 10:00 a.m.
AEI Election Watch 2014: What will happen and why it matters

AEI’s Election Watch is back! Please join us for two sessions of the longest-running election program in Washington, DC. 

Wednesday, October 22, 2014 | 1:00 p.m. – 2:30 p.m.
What now for the Common Core?

We welcome you to join us at AEI for a discussion of what’s next for the Common Core.

Thursday, October 23, 2014 | 10:00 a.m. – 11:00 a.m.
Brazil’s presidential election: Real challenges, real choices

Please join AEI for a discussion examining each candidate’s platform and prospects for victory and the impact that a possible shift toward free-market policies in Brazil might have on South America as a whole.

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