Margaret Thatcher once said:
“The problem with socialism is that you eventually run out of other people’s money.”
Today there are signs that our economy is at great risk of a nearly complete meltdown. The shocking failure of Signature Bank, just two days after the failure of Silicon Valley Bank is having a serious impact on other major banks:
Dodge Frank was enacted under the Obama administration and modified as the result of bi-partisan legislation during the Trump administration.
“The final compromise leaves most of Dodd-Frank in place but provides a major boost for some of the largest U.S. banks. The measure releases of regional banks from tighter regulation by raising the threshold for closer Fed oversight from $50 billion to $250 billion in assets.
Banks below the new threshold will no longer be automatically subject to annual Fed stress tests and capital buffers meant to protect large firms are from severe financial crises.
Those banks are also no longer required to from submit for Fed approval a “living will” that outlines how a bank’s assets could be liquidated upon the firm’s failure without causing a widespread meltdown.
The bill includes several provisions to scrap rules for community banks and credit unions. Firms that hold 500 or fewer mortgages a year will no longer have to report some home loan data to federal regulators under anti-discrimination laws.”
We can predict that Democrats will blame the changes in Dodd-Frank for this disaster, without regard to the facts. But the reality is that regulation increases costs and that impacts small banks and business operations disproportionately. Adding additional regulations, which clearly did not work, on smaller banks who are doing fine seems extremely unlikely to fix anything.
The real lesson here is that the more the government tries to regulate anything, the worse the results. In addition, Democrats have a serious problem because while people with deposits equal to $250,000 are already protected by the FDIC, by definition changing that has a disproportion impact on the super-rich. Instead of taxing the rich, Biden is moving to protect the rich at the expense of the middle class. While CNN, MSNBC, NBC, CBS and ABC will failure to understand this, a lot of people are less likely to be confused.
Unfortunately, this is just further evidence of how much damage has been done to our economy by putting someone like Joe Biden in the White House and then pretending his repeated disasters are actually thinly disguised major victories. The situation we are in right now is very close to the worst-case scenario. We have an 80-year-old senile President, who has made us the laughingstock of the world, making huge mistakes many of which are the direct result of reversing policies implemented by Donald Trump. The only person less qualified to be President of the United States is Kamala Harris.
Perhaps it is time to ask which is worse, what we have now, or reversing the results of the 2020 election? Sometimes the unthinkable is a better option than the current thinking. The left bank only results in a lot of people left behind.