One year ago today, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Despite the “Wall Street” moniker, the tentacles of Dodd-Frank’s 2,315 pages and hundreds of pending rules reach across many American streets to many types of businesses, from manufacturers that use derivatives to hedge inflation and interest rates, to small stores that extend credit through layaway plans.
Ironically, about the only two firms Dodd-Frank doesn’t touch are the two most responsible for the crisis: the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. In their new book, Reckless Endangerment, New York Times financial columnist Gretchen Morgenson and market analyst Joshua Rosner write that Fannie “led both the private and public sectors down a path that led directly to the financial crisis of 2008.” At the end of the book, the authors note with dismay, as have many conservative critics, that the law doesn’t lay a glove on Fannie and Freddie.
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