Fixing Finance, Still
Replace Dodd-Frank with something that will work
Two weeks into his term, President Trump took on the Dodd-Frank law, President Obama’s 2010 attempt to reform the financial industry. “We expect to be cutting a lot out of Dodd-Frank,” the president said on February 3. The same day, he signed an executive order directing regulators to look through the nation’s financial laws to determine whether they conform to several key principles he has set out, including that they must “prevent taxpayer-funded bailouts.”
Trump is correct to revisit Dodd-Frank. This is a good example of his overall predicament: To right a private sector that has suffered from decades of government distortion, he must confront a deep regulatory state that is a self-contained economy of its own. The government entity that Trump has directed to revisit Dodd-Frank, the Financial Stability Oversight Council (FSOC), is itself a creation of Dodd-Frank. Would its staff counsel the president to eliminate their jobs?
This piece originally appeared in National Review