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Five Year Anniversary of the Dodd-Frank Financial Reform Law:Protecting America’s Families

The Newseum555 Pennsylvania AvenueWashington, D.C. 20001

July 20, 2015

Official White House photo by Lawrence Jackson

In the few years since the financial reform law was passed, the discussion has dramatically shifted:

• From the financial collapse, the economic crisis, the costs to the country and the industry’s role in causing it all

• To the financial reform law, the rules necessary to implement it, and the claimed costs from all that.


The Cost of the Crisis: $20 Trillionand counting


Friday, September 19, 2008: Morgan Stanley and Goldman Sachs “toast”

From an internal Federal Reserve Bank of New York email dated Saturday, September 20, 2008, recently revealed in the AIG trial:

“FYI, [Morgan Stanley] called [NY Fed President Tim Geithner] late last nite [Friday September 19, 2008] and indicated they cannot open on Monday [September 22, 2008]. [Morgan Stanley] advised [Goldman Sachs] of this and [Goldman Sachs] is now panicked because they feel that if [Morgan Stanley] does not open, then [Goldman Sachs] is toast . . .”


NEW PHASE IN FINANCE CRISIS AS INVESTORS RUN TO SAFETY


Treasury Guarantees $3.7 Trillion Money Market Industry


$700 Billion TARP Bailout Passed October 3, 2008


$700 Billion TARP Bailout Was Just a Small Part of the Trillions in Bailouts

Federal Reserve Board, Treasury and FDIC guaranteed, lent or otherwise

used many trillions of dollars more in bailouts and rescue programs.


• Term Auction Facility • Primary Credit Tri-Party

Repurchase Agreements • Commercial Paper Funding

Facility • Money Market Investor

Funding Facility • Asset-Backed Commercial

Paper Money Market Mutual Fund Liquidity Facility

• Term Securities Lending Facility (TSLF), TSLF Options Program

• Primary Dealer Credit Facility

• Temporary Liquidity (Debt) Guarantee Program

• Asset-Backed Commercial Paper Conduits

In addition to TARP, SOME of the government programs providing bailouts and support include:


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Fed’s Zero Interest Rate Policy


U.S. Federal Reserve Balance Sheet Total

The Financial Crash Continued Deep into 2009, as did the

Economic Crisis.


Then there were the enormous human, social and government costs.



To put that 17.5% rate into perspective, it equates to:


Underwater Homes: Mortgages more than homes could sell for

There are tens of millions of Americans and their families

behind those numbers.

Thousands of people turned out Wednesday, Feb. 11, 2009 for a job fair at the Atlanta Federal Center in downtown Atlanta. The line snaked around the block and then back again on itself, requiring three lines in spots.

Children at Wicklow Elementary in Sanford, Florida, get lunch at the cafeteria, October 14, 2011. Every weekday more than 200,000 hungry students in Central Florida public schools line up to get lunch for free or a few cents because their families cannot afford to feed them. In the County, the economy is so bad that seven out of every 10 students - 71% - are eligible for free or reduced price meals under the federally subsidized school lunch program.

Fellow firefighters applaud as a five-year-veteran of the Camden Fire Department tells them to keep their hopes up as they prepare to turn in their gear after being laid off. Camden laid off a third of its firefighters.

A recently laid off man waits to apply for food stamps at the Cooperative Feeding Program on February 10, 2011 in Fort Lauderdale, Florida. Recent statistics show that nationwide, one in seven Americans receives help from the Federal government with buying food. The food stamp program was used by 43.6 million people in November 2010, up from 26 million just two years ago.

In this Dec. 17, 2010 photo, a woman holds an unemployment check in her home in Burbank, Calif. Before she was laid off from a quality assurance job at Yahoo! in July 2009, she earned around $100,000 a year. “It really gets me when they say ‘you lazy people,’” she said. “They have no idea how depressing that is when you have been beating your head against the wall, trying to find work.”

With tax revenues plummeting and social needs skyrocketing, government deficits and debt

ballooned.



2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $-

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

$1,400,000.00

$1,600,000.00

U.S. Deficit 2002-2012 (in millions of dollars)

Year

Deficit ($millions)

The same thing has happened in the private

charitable sector.


•Public finances tremendously stressed•Deficits and debt drive decision-

making•Private charitable activities suffered

• large endowment losses & contribution declines


2009 2014$125

$135

$145

$155

$165

$175

$185

$195

Just one example: Federal financing for research and developmentin billions (adjusted for inflation)

-26.7%

Source: New York Times BetterMarkets.com© 2015 Better Markets, Inc.

But, it’s not just R&D that has been cut or made worse:• Inequality• Education• Poverty• AIDS• Arts• Science• Health Care• Aging/Seniors

• Unemployment/Jobs• Housing• Environment• Economic Opportunity• Energy• Innovation• Business Creation• Drug Abuse


Let me conclude by mentioning just one other cost, which is never mentioned:

•The exploitation of financial reform for political and partisan gain.



United States Average 16.8%

The economic calamity caused by the financial crash hit everyone regardless of party affiliation

The financial crash and the economic catastrophe it caused is what made financial reform and Dodd-Frank absolutely essential.

Preventing that from happening again is what financial reform is all about.


•Protecting American’s jobs, businesses, homes, savings, retirements, and standard of living; and

•Making sure that public funds are never again diverted from social priorities to bail out reckless financial activities.


That’s also why the Dodd-Frank financial reform law must be fully implemented and aggressively policed

• as soon as possible, • as strongly as possible, and • as durably as possible.


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Documents

better markets

morgan stanley

goldman sachs toast

financial collapse

tarp bailout

commercial paper conduits

money market industry

bailouts federal reserve