Presidential candidate Newt Gingrich has taken up the relatively esoteric fight against the Dodd-Frank Wall Street reform law, telling anybody who will listen that it must be repealed, along the Sarbanes–Oxley Act and other banking regulations. Last night on Fox News host Sean Hannity’s show, he even went so far as to say that Dodd-Frank is “killing the banking industry” and offered it’s repeal as one of his top ideas for job creation:
GINGRICH: They oughta come back in and repeal the Dodd-Frank bill that’s killing the banking industry now. I met today with people in Thai community in Los Angeles, people in the Korean community, people in the Chinese community. In two of the three communities, they thought that the Dodd-Frank bill was killing local banks, killing small business, crippling the housing industry.
It’s unclear how Gingrich thinks a law that hasn’t even been fully implemented could already be killing one of the most powerful industries in the country, but he is hardly alone among his partisans in claiming that regulations are too tough on poor Wall Street.
Just a few years short years after the nation’s biggest banks helped bring down the global economy, due in large part to lax and dysfunctional regulation, most Republicans now oppose any efforts to further reign in large financial institutions. Some, like Gingrich, want to roll back regulations that existed even before the financial colllape — Sarbanes–Oxley was implemented in response to the Enron and other major corporate accounting scandals — while Texas Gov. Rick Perry (R), goes much further, suggesting in his 2010 book that all banking regulations are unconstitutional.
Rep. Michele Bachmann (R-MN) has also called for a full repeal of Dodd-Frank, while Mitt Romney, a former financial services executive, decried “the level of over-regulation and burden which has been placed on the financial services” and likened bank regulators to “gargoyles,”
So is Dodd-Frank “killing” the industry? In fact, “bank profits rose substantially” in the first quarter of the year, with banks showing the biggest profits since before the recession. Things were sunny in the second quarter as well:
– Profits at JPMorgan Chase, the nation’s second largest bank, were up 13 percent.
– Third-largest Citigroup’s profits soared 23 percent.
– Fourth-largest Wells Fargo’s profits shot up 29 percent.
– Fifth-largest Goldman Sachs, meanwhile, “disappointed investors” when it merely “more than doubled its profits.”
–Sixth-largest Morgan Stanley’s profits were up an impressive 17 percent.
The only top-tier bank to have a rough second quarter was the nation’s largest, Bank of America, which has been dragged down in part by its acquisition of investment house Merril Lynch — a move that, ironically, would not have been allowed under the Glass–Steagall Act, the repeal of which Gingrich spearheaded as House Speaker in the 90s.