What Government Regulators and Meddlers Have Made Worse

We have learned there is no problem so severe that our government can't make worse with more regulation and meddling.

  We know, if we bother to get past the media and its political cant, that the subprime mortgage crisis was not started by banks. It began with government legislative enabling and sponsorship of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). With further overlooking of the agencies' strict supervision.                       

Then you have the government bailing out investment banks with the Troubled Asset Relief Program or TARP. Taxpayer money starting with $700 billion was to be used to buy up distressed mortgages. However, the Treasury used the money to make loans directly to troubled banks. The banks have since repaid such loans but the time and focus was misdirected.TARP has since been viewed as a giveaway by a former government official who was a government official at the time.    

The Dodd-Frank financial reform law, that  imposes 400 new regulations upon bankers is another meddler. It's  devastating  to community banks, which don't employ large legal staffs. The American Bankers Association estimates that Dodd-Frank will force 1,000 small banks  out of business by 2020.

The law’s additional staff requirement will cost taxpayers $1.3 billion, according to the Government Accountability Office estimates. And you can be sure it cannot reduce bank risk unless banks keep funds in a mattress. (See the Earl J. Weinreb NewsHole® comments.)