Doomed to Repeat: Debunking the Conservative Story about the Financial Crisis and Dodd-Frank
June 6, 2017
By Mike Konczal, Andrew Hwang, Katy Milani
In response to the 2007-08 Financial Crisis that cost the United States more than $20 trillion, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, 2010 with the aim of overhauling the dysfunctional regulatory regime. In the years since, the wide-reaching reforms mandated by Dodd-Frank have provided key protections to consumers and stability to the banking system. Thanks to such reforms, banks and the US capital markets have emerged from the Financial Crisis more resilient than before and regulators are now better equipped to respond to future crises and regulatory challenges.
Yet, according to conservative narrative, there is simply no need for financial reform. The Trump Administration and conservatives in Congress have actively pursued ways to unravel Dodd-Frank based on an account of the Financial Crisis that differs drastically from the conventional wisdom. The conservative worldview is shaped by a series of arguments generated by conservative think tanks, media, political action groups, and industry lobbyists. This paper provides a broad outline of their arguments and how they differ from what has actually happened.