Dodd-Frank’s drag on the economy

Last week’s disappointing September jobs report and the equally disappointing revision of August’s initially positive numbers indicate a steady downward trend in the US economy.

AEI scholar Peter Wallison believes the United States’ “exceptionally slow recovery” from the 2008 financial crisis is due in large part to the regulatory costs placed on small banks by the Dodd-Frank Act.

Although 64 percent of net new jobs in the US economy between 2002 and 2010 came from employment by small business, this source of growth has disappeared since the enactment of the Dodd-Frank Act. While larger firms have access to credit in the capital markets, millions of small firms, limited to borrowing from beleaguered community banks, are not getting the credit they need to grow and create jobs.

Read Peter Wallison’s full article on the effects of Dodd-Frank on the economy here.