City Journal Spring 2014

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Spring 2014
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Luigi Zingales and Paola Sapienza
Unpopular Financial Reform « Back to Story

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Perhaps you polled people who are educated enough to understand that the bubble was caused by false prosperity pretenses and the latest recessionary environment is a result of congressional pressure on banks to put anyone and everyone in a house they "could own". Until the real root cause of this catastrophy is discussed, all other symptoms are just media fodder.
The ironic thing with the polls is (and I am confident that many of those who responded do not know the real world ramifications of the bill) that once the bill goes "into the system" and the consequences of the prompt passage become apparent, the outrage will be huge.
CFPA isn't strong enough and is useless; CFPA is overreaching of govt. There you have it. Somehow, Wall St created the conditions that required, as agreed by Rs and Ds, a massive, risky govt intervention. And there is still nothing approaching a consensus on the need to impose much tighter restrictions on the financial sector. At least both sides realize that we haven't gone far enough to prevent another financial implosion. The only thing we don't realize is the extent to which we non-insiders are responsible.
Very very few people know what Dodd-Frank says so their opinion is "pointless."
It's unpopular because it doesn't fix anything. In some cases, makes things worse. It will only dry up credit for some people and small business. Its added even MORE regulation that won't stop mortgage fraud and the like.

Doing nothing would have been better.
What can be expected of either Dodd,Frank,or Obama but smoke and mirrors ? As usual with all the legislation by the Obama Administration so far, the Devil is in the details, and it takes time for them to be exposed, and way too late.
What will it become?

SpotBanks
Sapienza & Zingales have got this right, as the their last paragraph informs us. Financially sophisticated folk can see through the flaws in the Dodd-Frank legislation. And those who must work in its framework, will find ways to avoid its intentions.