Nowhere is the US effect more on other country citizens than in the area of finance. If it starts a war, as it did in Iraq, at least I am not affected too much and its unlikely that the US will start a war with India. But Trump, by the act of trying to roll back Dodd Frank, is directly affecting me and is therefore fair game in being virulently criticised.
Dodd Frank what ? Yes that's a fair question as unless you are a student of economics you may not have come across the Dodd Frank Act. Here's the context in layman terms
- Remember the financial crisis of a decade ago. It was caused by global financial behemoths (mainly US based) going crazy
- Post the crisis, the Obama administration enacted the Dodd Frank Act to govern the conduct of financial institutions. Massive compliance requirements were brought in and severe restrictions and policing was introduced on what they could and could not do.
- At the time, the Republican Party was in the phase of "Hell No". Therefore the law was not passed on a bipartisan basis. It was mostly a Democratic Party legislation.
- Republicans hated it, largely because they hated anything Obama did. The big finance companies and banks absolutely loathed it.
- The law is complex, fiddly, adds huge costs of compliance and is an absolute nuisance for those in the finance business. All true. But we have seen what havoc they can wreck on the world if they are let loose. So their complaints should simply be met with a stonewall.
- This is one perfect example of a bad law being infinitely better than no law.
- The consequence of another financial meltdown is that I, an Indian citizen, will have to pay for it even though Indian financial institutions played absolutely no part in creating the mayhem. Like it or not there's no "Buy American" in finance. Finance is global.
Trump is now trying to loosen the provisions of the Dodd Frank Act. Thankfully he cannot repeal it as he needs 60 votes in the US Senate and he does not have them as the Democrats are now the party of "Hell No". But he can dilute it considerably and that's what he is starting to do. An Executive Order came out on Friday. Thankfully for now, the Order is just asking somebody to do something , as most Executive Orders thus far have been. Nothing really has happened.
But it will happen. Trump's cabinet and advisers are full of Wall Street types. They have a vested interest in undoing the Act . They must be resisted with every force. And I'll loudly call for Trump to be resisted on this one. As should you, whatever nationality you are. It affects you and me.
Dodd Frank has lots of faults. It's 2300 pages long. That alone is enough to tell you that Ramamritham has run amok. BUT, before anybody tries to do anything with it, he has to prove that it will improve controls and not dilute it.
For, you see, if you want to be really scared, do not think of nuclear war with North Korea. Or Arctic melt down. Or an asteroid hitting the earth. Get mortally terrified with just this one statistic. The total value of financial derivatives in the world at this moment is some $1.5 quadrillion. By comparison the world's GDP is $80 trillion
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I'll be the first to admit I understand little of the 2300 pages of Dodd-Frank. Generally speaking I oppose regulation and governmental interference and have heard more complaints than positives about the act.
Perhaps Dodd-Frank should receive credit for the reduction of inappropriate mortgages and subsequent reduction in foreclosures, but it also made securing or refinancing a mortgage more difficult for qualified applicants. As a consumer, it seems like banks have increased their fees exponentially since Dodd-Frank passed while also posting massive profits ($5B in one quarter!!) Banks may complain about the regulations being onerous and expensive, but they don't seem to be suffering financially. They still seem too big to fail while consumers are paying fees for the "privilege" of conducting a transaction with a human instead of a machine.
Whether these changes result from or are coincidental to Dodd-Frank, if the goal was to protect the consumer and the tax payer, the results are mixed at best.
Sure the results are mixed as the issue is extremely complex and there is almost no good solution. But is there any, and I repeat any, case for loosening the regulation. I can understand improving it, achieving the same control with less regulation, etc etc. But loosening a control ??
We have to hold people accountable for such dangerous actions. It simply cannot be bluster and words. If there isn't a cogent argument as to why the loosening of controls will actually make the world safer, we must call the act out as irresponsible.
That is his style. He said he'll do away with Obamacare and went after it. Then someone reminded him he needed to put something in place before repealing it. So he went 'Oh'! So now its Dodd Frank which of course the financial institutions would like to see gone without a replacement so this one will not see much resistance. Common man doesn't know doesn't care. People who realize it are having a scary ride sitting next to a drunk driver. But at this point the best you can do is make sure you have a seat belt on.
Yesterday I left a lengthy comment ... and I hit "publish" ... it didn't show up.
Fortunately, I was able to retrieve it and copy/pasted. I hit "publish." Didn't show up again.
I gave up. I assumed that Ramesh didn't want me to being my anti-fuhrer commentary here ;)
Oh well ... I won't try re-creating the long, long, long note of yesterday ... instead, I will merely state that we are in what George Will refers to as a "Oh, never mind!" presidency in which we will find out over and over that the orange man will say anything that pleases him for the moment, which will get him his TV ratings, and that is all there is to it
https://www.washingtonpost.com/opinions/the-oh-never-mind-president/2017/04/21/5d15ee6c-2619-11e7-b503-9d616bd5a305_story.html
Like most people with personality disorders, Trump sees things as being all good and/or all bad. Furthermore, something can go from being good to bad OR obsolete to NOT obsolete very quickly in the orange clown's head. Case in point - NATO. Not once has he ever used the word "inadequate" to describe anything. Anything that is not perfect in his head is a "disaster". He loved calling Obamacare exactly that. Yes, Obamacare is inadequate and my medical costs have ballooned - but getting rid of it altogether is not the answer. The same applies for Dodd-Frank. I think working on the comment from "Anne in Salem" above is where their strategy around improvement needs to begin.
I won't comment on his style, but the very idea that you can reduce controls on finance should terrify any person in any position of authority.
I don't know what is happening - you are the second person complaining of comments disappearing. I checked the spam folder - its not there either.
I have no problems with the president doing whatever will please him or get ratings , but what I'm astounded about is who on earth wants lesser regulation on Wall Street types other than themselves. Where are the brownie points for doing this ?
Yes, there is a tendency to think in extremes. Maybe that's the problem.
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