Romney made a good point about the Dodd-Frank financial-reform law, e.g. that it enshrined five big banks as “too big to fail.”
This point is correct in that the law allows the Financial Stability Oversight Council (FSOC) to designate Systemically Important Financial Institutions (SIFIs), including the nation’s five largest banks.
The implication is that the government will be responsible for ensuring that they don’t fail, so if they do fail, it is the government’s fault, and the government would have to make up for that. This issue not just domestic, but one of foreign policy.
To wit: right now, we see Europe devoting tremendous sovereign resources to help Spain bail out its banks. If Europe is taking this tack, it expects America to do so if and when it is necessary in the future, and the Dodd-Frank law does not discourage this thinking.
It is surprising and gratifying that Romney, who doesn’t often mention Wall Street, brought up the financial system largely on his own and got into a little bit of detail.
Romney should make his point into a big speech about what it means for capitalism in general to have a financial system that is immune from market discipline.
His point about people not starting banks in their garages, though, is less promising. We need more small start-up banks, and there is no reason good regulations could not encourage people to start one-branch banks to grow and compete with larger banks. Otherwise, we have an oligopoly in finance.
Romney made the critical point that Obamacare takes $716 billion from Medicare - not to make it more effective or sustainable, but to pay for new health insurance subisidies for the uninsured on state health insurance exchanges. The Medicare cuts will also make 15% of Medicare providers unprofitable in the short term, and 40% unprofitable in the long term. This will translate into reduced health care access for seniors as providers stop accepting Medicare coverage.
On other side of the ledger, which Romney did not mention, the CBO estimates that the exchange subsidies and Medicaid expansion will cost $200 bilion annually by 2020, and grow at 8% annually. This is hardly “bending the curve” of health care costs that President Obama initially promised. Furthermore, states’ ability to invest in critical infrastructure projects and education is being strangled by the rising state share of Medicaid costs. Obamacare does nothing to reverse this trend, and in fact is set to make it much worse.
Mitt Romney said that the amount of money that President Obama has wasted on green jobs programs could have hired two million teachers. Green jobs programs are truly a waste—of the 33 energy loan guarantees or grants made under the Energy Department’s programs, 26, or almost 80 percent, have filed for bankruptcy or have missed production goals.
Plus, as I show in my new book, Regulating to Disaster: How Green Jobs Policies Damage America’s Economy, green energy is more expensive and raises Americans’ utility bills. Generating a megawatt hour of electricity from natural gas in 2015 will cost between $49 and $79. A megawatt hour from onshore wind will cost between $75 and $138, and from solar photovoltaic will cost between $242 and $455.
"…Obama’s energy policy rests on moral superiority. In Wednesday’s debate, Romney should make the case that green energy is neither moral nor superior, but merely condemns America to slower economic growth with only smugness to show for it."
Diana Furchtgott-Roth in today’s Washington Examiner.
Wednesday night’s debate marks the first time President Obama and Mitt Romney will spar head to head on the economic issues that underpin the 2012 presidential election. While both candidates have spoken on the trail about tax and labor issues, neither has announced the steps they would take to safeguard the economy from another financial crisis.
The Manhattan Institute just released the latest in its Issues 2012 series of policy briefs, “WALL STREET AND DODD-FRANK: The Right Questions to Ask the Candidates.” Debate moderator, PBS’s Jim Lehrer, should consider deploying a few questions to encourage the contenders to break the silence. Authored by MI Senior Fellow, Nicole Gelinas, the report suggests thirteen questions on financial regulation for Wednesday’s presidential debate. A few of those questions include:
For President Obama:
If the Dodd-Frank law fixed Wall Street, how would you explain that just this May, 52 percent of potential voters told pollsters that they had little or no confidence in the financial industry – not much different from the 55 percent who had such little faith in the industry in the weeks after Lehman Brothers collapsed?
For Governor Romney:
You favored the idea of a government-funded “managed bankruptcy” for General Motors and Chrysler even before Obama took office and pursued such a course.[i] Do you think that large financial firms, too, should have to go through such a “managed bankruptcy” process, with creditors as well as employees taking substantial losses? In other words, is it fair to treat one industry different than the other?
For both candidates:
A lot of people like the Facebook social-media website. But they are upset that Facebook’s stock-market listing earlier this year seemed to fall prey to insider manipulation, causing big losses for small investors. Do you think the stock market gives all investors a fair shake? If not, how would you fix i
Today on NRO’s the Corner, Nicole Gelinas writes:
Conventional wisdom holds that the National Football League lockout of unionized referees will hurt Mitt Romney, because the lockout reminds union workers and former union workers in swing states that owners and their agents are often incompetent when it comes to understanding what exactly workers do. Skilled workers, they might remember, are not just interchangeable cogs, something that managers often don’t get.
There is another way of looking at it, though…
"A carefully tailored Medicaid block grant would improve the lives of the millions of low-income Americans…"
Paul Howard in his new Issues 2012 paper, "How Block Grants Can Make Medicaid Work"
"The challenge for America lies in getting the 47% who don’t pay income taxes into a position where they can. Now, all Romney has to do is say how."
Marketwatch.com, Diana Furchtgott-Roth
National Review Online, Nicole Gelinas
"Romney needs to understand that voters are not just mercenary beasts looking for whichever candidate will help get them a better pay packet.
Voters care about the world around them; they care about what corporate-bailout culture — a culture that predates Obama — has done to their country. And they’re angry about it…”