SOME DODD-FRANK LIES BY POLITICIANS

An article titled "Presidential Candidates Don't Understand The Banking System" by Richard X. Bove* states (quotes in italics):

(1) It is often stated (by various candidates) that, since the passage of the Dodd-Frank Act, the biggest banks have gotten bigger.That's simply not true: In fact, the four biggest banks in the country have declined from having nearly 58 percent of the industry's assets in 2010, (when Dodd-Frank was passed) to nearly 52 percent in 2015 and they are likely to shrink even more rapidly in the next few years due to newly published regulations.

(2) It is being argued that small banks are failing at a faster rate since Dodd-Frank was passed. Also not true. From 1986, when the number of banks peaked in modern times, to just before the financial crisis, we were losing more than one bank a day to mergers and failures. We are still losing banks but at a pace well below the past.

(3) There is a fear that banks are still taking on too much risk, despite the hundreds of new regulations being put in place. This is the most outrageous untruth of all. Banks now have more cash as a percent of assets than any time in the past 25 to 30 years.

(4) Perhaps the biggest misunderstanding is the position of capital in the banking industry. Both sides of the political aisle and the regulators keep demanding more and more capital as protection for the banking system. Yet in the past five years, equity in the commercial-banking system has been consistently greater as a percent of assets than any time since 1938.

(5) Moreover, it was recently demonstrated that a number of politicians, and the media, did not realize that the Federal Reserve is no longer allowed to bail out banks. Further, it is not understood that the Fed now has a new system in place built around something called Living Wills. Under this system, every large bank in the country has provided a template to the regulators as to how to dismantle itself if it were to become insolvent.

Bove does say, " In that 77-year period [since 1938], the United States has not had one Depression or collapse of its banking system." I don't understand this.  What was it that we rescued ourselves from in 2008-2009 (e.g. TARP, Troubled Asset Relief Program)?

* http://www.cnbc.com/2015/11/12/presidential-candidates-dont-understand-the-banking-system-bove-commentary.html

PRESIDENTIAL MANAGERIAL STYLES

It is pretty clear that politicians don't like Obama's managerial style.  I'm amazed they don't seem to know what it is.  His management style is what I imagine that of Warren Buffet's is.  Buffet buys good companies and keeps the management in place and let's them continue to run their companies.  So if Obama is the CEO of a conglomerate (sounds reasonable), he lets his CEOs run the ball.  In this case it is Senator Harry Reid, leader of the Senate, and Representative Nancy Pelosi, now minority leader of the House.  He let them run the ball on what is called Obamacare (actually the PPACA), it was the same with Dodd-Frank, and also with the recent government shutdown and near disaster of the debt limit.  I haven't followed other victories as closely so I don't know how much they were involved in getting of other successes such as of "Don't Ask, Don't Tell."

Though the PPACA is much more conservative than I like, it is a beginning

The problem with this managerial style with politicians is that they all have egos that won't quit.  They all think they are God's gift to humanity.  They all want to talk to the Big Boss and are frustrated when they have to settle for talking to their CEOs.  This is true of Democrats of the President's party as well as the opposition Republicans.  And it is also true of the media.  Somehow the media can't get enough access though it seems to me they have a lot.  At least after the fact, they like the former President  Bill Clinton style better (My memory is that when he was president, the Republicans did everything in their power to screw him.).  The glad handing, good ol' boy, type of politician. The thoughtful, introspective type of politician is not as much fun.

The Republicans rolled him so often because he is by nature a compromiser, but finally he caught on and said, "No more!"  He didn't realize for a long time that the current crew that controls the House, in particular, views compromise as a sign of weakness.