Tuesday, July 26, 2011

Newt actively calling for the repeal of Dodd-Frank

The two worst pieces of legislation passed during the first two years of President Obama's administration -- and what a long list of bad bills that is -- were Obamacare and Dodd-Frank. While every Republican running for President is calling for the repeal of Obamacare, only Newt is out there insisting on the same fate for Dodd-Frank.

Dodd-Frank, whose stated purpose was to end the idea of "too big to fail," has actually just led to the big banks being bigger while killing small, community banks and reducing investment. (But who needs capital in this economy?)

The Huffington Post even said Newt is the only candidate "actually saying anything of substance about it....Gingrich stands alone as the sole 2012 hopeful to level specific criticisms at the law on a regular basis. He published a 924-word broadside against the bill on Wednesday morning for Human Events, a conservative publication."

Jon Ward continues by quoting Newt: "Dodd-Frank is crippling any recovery in the housing market with overly strict requirements on lenders combined with uncertainty for community banks," Gingrich wrote on the Human Events website. "By cementing the two main roadblocks to recovery, uncertainty and low consumer spending, Dodd-Frank has done exactly what Republicans predicted it would."

Yesterday, an article was put out by American Banker in which the author writes:
In fact, in a sit-down interview Friday, [Gingrich] sounded a lot like a community banker.

"The game is rigged against small banks at two levels," Gingrich said in an interview at his Washington office. "One is that the aggregated marginal advantage of borrowing money that is set up here by the Fed is profitable if you are a very, very large bank. It's not nearly as profitable if you are a small bank. You have that disadvantage."

The other problem comes from what he sees as the massive new regulatory burden spurred by the year-old law.

"The regulatory burden can be handled by a large multinational bank as part of their general management process. It kills a small bank," he said.


Although many politicians like to praise community banks in general, it’s unclear how much their fate truly bothers them. For Gingrich, it’s hard to escape the sense that the issue is a core part of his conservative philosophy.

"I have a particular passion for getting back to a community-based, small-business based, local entrepreneurial system," he said. "The whole base of the American model is local citizens with local resources providing local leadership. When you get to huge bureaucratic institutions, so you are branch #643, you have no capacity to provide local leadership anymore."

The former Speaker of the House also shared many small bankers’ distrust for, and distaste of , government interference. In his view, the government’s response to the financial crisis just made the situation worse.


Like Tom Hoenig, the president of the Federal Reserve Bank of Kansas City, Gingrich said that Dodd-Frank solidified, rather than eliminated, the concept of too big to fail.


"You already have a whole series of agencies that if they had done their job, it would have worked," he said. "We are now going to add more layers of agencies on top of the agencies we already have with the premise that the next one is going to be smarter and better."

A better strategy would have been to pursue -- and criminally prosecute -- bad actors during the financial crisis, including companies like Goldman Sachs & Co. that sold products that they themselves were betting against.


"You know what capitalism is? Taking risk," Gingrich said. "You know what all those guys who are rich and made all that money and had all those neat places out in the Hamptons? That’s what you get for taking risk. You know what happens when the risk fails? You lose the plane, you lose the mansion. That’s what capitalism is. What we’ve invented is socialism on the way down and capitalism on the way up."
There are some other good quotes, and I recommend going to Newt.org and read the rest.

Today, Newt sent out an e-mail touting his call for the repeal of the law. He writes:
The mainstream media’s coverage of our campaign has paid little attention to substance and focused far too much attention on trivia and gossip. However, articles such as this one show there is a hunger for leaders with real experience who can offer real solutions.

This campaign is based on the idea that at a time of such significant challenges for America, substance will matter more than smears.

Thank you for your continued support. Please share this article with your family and friends.

Read "Meet Newt Gingrich: The Community Banking Candidate" here.
He also asked everyone to "consider a donation of $10, $25, $50 or more to help continue our campaign of substance over smears."

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