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Chapter 4: Government Overreach

Before we can slow the process of government
overreach, the general public and Congress have to
recognize the problem, both political parties have to
agree on the remedy, and the President has to be a
strong leader and must communicate his economic
agenda to all Americans. A book on the subject is The
High Cost of Good Intentions, 2017, by John F. Cogan.

THE DODD-FRANK ACT
The Dodd-Frank Act of 2010, also known as the
Financial Reform Bill or the Wall Street Reform and
Consumer Protection Act, is about 2,300 pages.
Congress designed the act to make banks safer by
limiting banks’ ability to take risks and forces them to
increase their liquidity. Among other things, the Federal
Reserve is to administer stress tests each year for any
bank with more than $50 billion worth of assets. The
Dodd-Frank Act is more about protecting the banking
industry from a crash and less about preventing the next
crises.
Dodd-Frank enabled big banks to grow without
having to change much while the small banks do not
have the resources or the expertise to comply with the
law. President Trump plans to help small banks with
credit that is now going to the big banks so that they can
invest in community projects because small businesses
rely on regional banks. Consumer and commercial
lending is a part of a growing and stable economy. Even
Barney Frank has admitted that applying the same
liquidity and stress-testing requirements to banks with
$50 billion in assets as those with more than trillion
dollars was a mistake. “Dodd-Frank is a disaster,”

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