Leaders of the 20 key economies in the world will be meeting in Brisbane in October with an agenda that includes such a comprehensive reassessment. We ought to encourage this and to take that review seriously. This includes correcting some clear mistakes in the Dodd-Frank Act, the main U.S. financial reform law that was passed four years ago. The U.S. has been caught in a damaging stasis, where Democrats have felt compelled to block any changes to Dodd-Frank because they believe that Republicans would use the opening to reverse important new protections for the financial system. We are in the unfortunate situation where Republicans are calling for wholesale repeal or radical amendment of Dodd-Frank and Democrats feel the need to effectively act as if everything in it is perfect. It’s time for a compromise where Republicans accept that Dodd-Frank will remain the law of the land, unless and until they win the Presidency and achieve a filibuster-proof majority in the Senate, and Democrats admit that revisions are necessary. Dodd-Frank is a long and complex piece of legislation that substantially alters regulation of a huge and complex part of our economy. It should be no surprise that it can be improved now that we know more and have thought about it longer.
See today’s first post.