Obama vs. Romney 101: 3 ways they differ on regulation

Wall Street is a big target – blamed for the 2007-'08 financial crisis that led to the Great Recession, hedge fund managers living the life of Gatsby while millions lose their homes, and banks moving trillions of dollars around the globe in mystifying ways. What to do?

To Mitt Romney, with a Wall Street pedigree himself, efforts to rein in the financiers with regulation piled on regulation are an attack on “economic freedom.” President Obama, who often referred to the pin-striped set as “fat cats,” cites a need for regulations that make it “more profitable to play by the rules than to game the system.”

Here are three key issues on which they differ: the Dodd-Frank law to regulate Wall Street, the new Consumer Financial Protection Bureau, and offshore accounts.

1. Dodd-Frank Wall Street Reform and Consumer Protection Act

Charles Dharapak/AP
President Obama and lawmakers applaud after he signs the Dodd-Frank Wall Street Reform and Consumer Protection financial reform bill at the Ronald Reagan Building in Washington, July 21, 2010.

In July 2010, President Obama signed into law this 848-page effort by Congress to prevent another breakdown in the financial system. The legislation required banks to increase their capital, enacted mortgage reform, gave greater oversight of Wall Street to various federal agencies, and set up a Bureau of Consumer Financial Protection, among other provisions. Complying with the law will cost the eight largest US banks $22 billion to $34 billion annually, according to a recent analysis by Standard & Poor’s.

The two presidential candidates differ on the degree of regulation needed to prevent a future banking system collapse.

As he signed the law, Mr. Obama said his goal was a set of reforms “to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all."

Romney says “some of the concepts” in the legislation “have a place.” However, he says that, as president, he would work to repeal the law, replacing it with a mostly unspecified but “streamlined regulatory framework."

To Romney, this law is an example of an overbearing federal government. For example, a Romney aide says small community banks “have taken the brunt of the overregulation.” The aide, speaking on background, says small banks don’t have the capability to deal with the cost and complexity of the law. “They are spending more on figuring out the rules and regulations versus lending to people,” he says.

Obama has said he is not antibanker nor even anti-Wall Street, although he has sometimes lambasted the dealmakers. On the day he signed the Dodd-Frank law, he commented that the financial industry is central America’s ability to grow, compete, and prosper. “There are a lot of banks that understand and fulfill this vital role, and there are a whole lot of bankers who want to do right – and do right – by their customers. This reform will help foster innovation, not hamper it.”

Gov. Jack Markell (D) of Delaware, acting as a surrogate for Obama, says the president’s position has to be viewed within the context of what the nation went through after the mortgage meltdown. Governor Markell recalls two separate meetings that he and other governors who are members of the National Governors Association had in February 2009 with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner.

“They were the most sobering meetings I ever had because each said. separately, ‘We think we can get the economy going again, but our primary concern is what happens to the financial markets. How do we get them unfrozen?’ ”

Thus, Markell says, Obama’s support for the legislation was to make sure “we were not going back to the kinds of problems that got us into trouble in the first place.”

1 of 3

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

You've read  of  free articles. Subscribe to continue.