Elizabeth Warren Slams Trump's Efforts to Dismantle Dodd-Frank - and Debunks His Fantasy Economics
Federal Reserve chair Janet Yellen has faced heavy criticism from President Trump, who promised to appoint someone new, likely a Republican, when her term ends in 2018. But Yellen also faced pressure from members of her own party at the Senate Banking Committee hearing Tuesday, Sen. Elizabeth Warren (D-MA) chief among them.
"The 2008 financial crisis cost millions of people their jobs, their homes and their savings, and in response Congress passed the bipartisan Dodd-Frank act, which aims to prevent big banks from blowing up the economy again," Warren began. "President Trump has called Dodd-Frank a 'disaster' and he has vowed to 'dismantle' it."
Yellen strongly believes Dodd-Frank should stay and that the act gives "well-capitalized banks" a "competitive advantage."
But President Trump has already begun rolling back the legislation with an executive order on financial regulation.
Additionally "he's put two men, [Treasury Secretary] Steve Mnuchin and [chief economic adviser] Gary Cohn, who have spent a combined 42 years at Goldman Sachs, in charge of rewriting the rules to help big banks like Goldman," Warren added.
The president claimed earlier this month that regulations are crippling his friends' businesses.
“We expect to be cutting a lot out of Dodd-Frank, because frankly, I have so many people, friends of mine, who have nice businesses who can’t borrow money. They just can’t get any money because the banks just won’t let them borrow, because of the rules and regulations in Dodd-Frank,” Trump said.
Warren sought to debunk such notions, once and for all.
"Chair Yellen, I know you and the fed spend an enormous amount of time looking at actual data about the economy and financial markets, so I want to follow up on Sen. Brown's [D-OH] questions and get your take on some of the administration's main reasons for calling Dodd-Frank a disaster," she explained.
"What does the data show about business lending since Dodd-Frank was enacted in 2010?" she asked.
Yellen's answer was enlightening.