The financial crisis in September 2008 was indeed a crisis, and yet it is stunning how soon the American financial sector sought to undermine governmental efforts to guard against another such crisis. Exactly three years after the crisis, Republicans in Congress repeatedly invoked the Dodd-Frank Act’s 848-page length and rules on trading derivatives and swaps as examples of government overreach at the expense of much-needed jobs. “Dodd-Frank is adding safety margins to the banking system,” according to Douglas Elliott at the Brookings Institution. “That may mean somewhat fewer jobs in normal years, in exchange for the benefit of avoiding something like what we just went through in the financial crisis, which was an immense job killer.”[1] To scrap the new law in order to save few jobs would thus be short-sighted even with regard to jobs. Wall Street's concern, however, was not jobs, but, rather, the loss of profit off high-risk trading.
The full essay is at "Bank One and Systemic Risk."
1. Edward Wyatt, “Dodd-Frank Act a Favorite Target for Republicans Laying Blame,” New York Times, September 21, 2011.
