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Title: Blog by Novelist William S. Frankl, MD

The Dodd-Frank Debacle

The Dodd-Frank financial reform bill that passed the Senate last week will generate humongous levels of red tape. The 2,300 pages(!) are so complicated that a debate has broken out over precisely how many new regulatory rule-makings it will require (Wall Street Journal “The Uncertainty Principle – II,” Wall Street Journal, July 16, 2010).

Two hundred and forty-three or more new federal rule-makings are on the way; 67 one-time studies; and 22 new periodic reports. This is a minimum estimate, counting only the new regulations mandated by the bill.

The U.S. Chamber of Commerce adds to this estimate by including additional rule makings mandated by this legislation:  American businesses will experience 533 new sets of rules. Sarbanes-Oxley, Washington’s last atrocious exercise in financial regulatory overreach, had only 16 new regulations!

But even these analyses do not count the duplicate rule-makings, when different agencies create different rules governing the same activity, as they are stipulated to do under Dodd-Frank.

In the near term, Dodd-Frank will result in  higher cost of credit, and a bigger market share for the mega banks that can more easily absorb the new regulatory costs.  In the longer term, the bill will very likely not prevent (or effectively deal with) the next financial crisis.

Our economic status as a financial force in the world is being destroyed by an out-of-control Democrat Congress and presidential regime. And note that Dodd and Frank were partly responsible for us falling into this severe recession. Will November stem the tide, or will things continue to deteriorate?

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