News Is Mitt Romney the Right Choice for the GOP in 2024?

[WhoWee]

Perhaps one of our Nuclear experts would like to comment on these 2 points?

"31. Expand NRC capabilities for approval of additional nuclear reactor designs

32. Streamline NRC processes to ensure that licensing decisions for reactors on or adjacent to approved sites, using approved designs, are complete within two years"

Is this realistic?

 

[mheslep]

That reduces the deficit to slightly more than the average Bush years, but not tremendosly so.

Average Bush years (2002-2007, before recession, after surplus) deficit was $285B/yr with 911, two wars, Katrina, vs $1151B now. A return to 2006-7 spending can come close to zeroing the deficit. These measures head in that direction:

53. Immediately cut non-security discretionary spending by 5 percent
54. Reform and restructure Medicaid as block grant to states
55. Align wages and benefits of government workers with market rates
56. Reduce federal workforce by 10 percent via attrition
57. Cap federal spending at 20 percent of GDP

 

[mheslep]

Perhaps one of our Nuclear experts would like to comment on these 2 points?

"31. Expand NRC capabilities for approval of additional nuclear reactor designs

32. Streamline NRC processes to ensure that licensing decisions for reactors on or adjacent to approved sites, using approved designs, are complete within two years"

Is this realistic?

I'm no expert, but it certainly appears headed in a right and necessary direction. The NRC has never approved a reactor originally submitted under its watch 35 year watch. The existing 104 US plants were all proposed/broke ground prior to the NRC.

 

[daveb]

Perhaps one of our Nuclear experts would like to comment on these 2 points?

"31. Expand NRC capabilities for approval of additional nuclear reactor designs

32. Streamline NRC processes to ensure that licensing decisions for reactors on or adjacent to approved sites, using approved designs, are complete within two years"

Is this realistic?

The main drag on approval of new plants isn't usually the lack of NRC personnel, it's usually the environmental impact studies requirements, the lawsuits brought on by environmental groups claiming the study was flawed or needs more study, etc. Not to say that the environmentalists are wrong (not having read any of the studies), but that's a big portion of the problem. Add to that the public perception of nuclear power and the NIMBY attitude prevalent just about everywhere, and you have a recipe for very slow movement. Power companies are reluctant to even try to build additional plants (though some have been expanding where they already have a presence). Perhaps if Yucca Mountain ever opens things might ease up as well, but with Harry Red in the Senate, I don't see that happening anytime soon. As a health physicist, I support nuclear power, as long as it is shown to be safe within the typical margin for error for a LOCA.

 

[ThomasT]

Average Bush years (2002-2007, before recession, after surplus) deficit was $285B/yr with 911, two wars, Katrina, vs $1151B now. A return to 2006-7 spending can come close to zeroing the deficit. These measures head in that direction:

53. Immediately cut non-security discretionary spending by 5 percent
54. Reform and restructure Medicaid as block grant to states
55. Align wages and benefits of government workers with market rates
56. Reduce federal workforce by 10 percent via attrition
57. Cap federal spending at 20 percent of GDP

Would the net effect of these points be less money in the general economy?

Would reducing aid to the states force them to reform or simply do away with their pension plans (which seem to be a major factor wrt states' economic problems)?

 

[ThomasT]

9. Repeal Dodd-Frank and replace with streamlined, modern regulatory framework

This doesn't seem to me to be a good idea. Isn't lack of federal regulatory capability one of the main reasons that the financial sector became the problem that it is?

 

[WhoWee]

This doesn't seem to me to be a good idea. Isn't lack of federal regulatory capability one of the main reasons that the financial sector became the problem that it is?

Weren't (former Congresspeople) Barney Frank and Chris Dodd criticized for putting pressure on banks to make risky loans - before they attached their names to this legislation? Label IMO-LOL

 

[ThomasT]

Weren't (former Congresspeople) Barney Frank and Chris Dodd criticized for putting pressure on banks to make risky loans - before they attached their names to this legislation?

I don't know. I'll take your word for it that some irony can be associated with the Dodd-Frank bill. My question was, "Isn't lack of federal regulatory capability one of the main reasons that the financial sector became the problem that it is?". Romney obviously wants to go in the direction of deregulation, which seems to me to be an obviously bad direction to go in given recent history.

 

[WhoWee]

I don't know. I'll take your word for it that some irony can be associated with the Dodd-Frank bill. My question was, "Isn't lack of federal regulatory capability one of the main reasons that the financial sector became the problem that it is?". Romney obviously wants to go in the direction of deregulation, which seems to me to be an obviously bad direction to go in given recent history.

These few links indicate the legislation is not popular with small business.

http://smbiz.house.gov/Calendar/EventSingle.aspx?EventID=245671
"This increased pressure has the potential to hamper small business lending since some regulators are taking a disproportionally stringent view of small business lending and loan performance"

http://www.foxnews.com/opinion/2011/07/21/small-businesses-not-celebrating-dodd-franks-birthday/
"Small Businesses Not Celebrating Dodd-Frank's Birthday"

http://www.loansafe.org/community-bankers-speak-out-on-the-impact-of-dodd-frank-regulations
"(Source: House Committee On Financial Services) – Obama Administration officials are frantically trying to convince the public that the 400 new regulations tucked inside the 2,300-page Dodd-Frank Act are having absolutely no impact on small town and mid-sized banks. None. Whatsoever. So just move on, OK? Nothing to see here.

But, what are community bankers saying? A much different story in congressional testimony and in statements to their local newspapers:

One community banker from Illinois said, “The Dodd-Frank Act will add an additional, enormous burden, has stimulated an environment of uncertainty, and has added new risks that will inevitably translate into fewer loans to small businesses.”"

 

[mheslep]

Romney obviously wants to go in the direction of deregulation

Why would you say that? The Mitt plan says ... and replace with streamlined, modern regulatory framework

 

[ThomasT]

These few links indicate the legislation is not popular with small business.

http://smbiz.house.gov/Calendar/EventSingle.aspx?EventID=245671
"This increased pressure has the potential to hamper small business lending since some regulators are taking a disproportionally stringent view of small business lending and loan performance"

http://www.foxnews.com/opinion/2011/07/21/small-businesses-not-celebrating-dodd-franks-birthday/
"Small Businesses Not Celebrating Dodd-Frank's Birthday"

http://www.loansafe.org/community-bankers-speak-out-on-the-impact-of-dodd-frank-regulations
"(Source: House Committee On Financial Services) – Obama Administration officials are frantically trying to convince the public that the 400 new regulations tucked inside the 2,300-page Dodd-Frank Act are having absolutely no impact on small town and mid-sized banks. None. Whatsoever. So just move on, OK? Nothing to see here.

But, what are community bankers saying? A much different story in congressional testimony and in statements to their local newspapers:

One community banker from Illinois said, “The Dodd-Frank Act will add an additional, enormous burden, has stimulated an environment of uncertainty, and has added new risks that will inevitably translate into fewer loans to small businesses.”"

I read the links you provided. Here's a link to the text of the Dodd-Frank Act:
http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf

What rules, provisions, etc. in it are detrimental to small financial institutions and small businesses? Just take them one at a time.

 

[ThomasT]

Why would you say that? The Mitt plan says ... and replace with streamlined, modern regulatory framework

From his points relevant to federal regulation, and interpreting the word "streamlined" to mean "less regulation", which is in the direction of deregulation.

 

[WhoWee]

I read the links you provided. Here's a link to the text of the Dodd-Frank Act:
http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf

What rules, provisions, etc. in it are detrimental to small financial institutions and small businesses? Just take them one at a time.

I don't care much for the insurance-related section or this expansion of powers:

"Subtitle B—General Powers of the Bureau
SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.
(a) PURPOSE.—The Bureau shall seek to implement and, where
applicable, enforce Federal consumer financial law consistently for
the purpose of ensuring that all consumers have access to markets
H. R. 4173.605
for consumer financial products and services and that markets
for consumer financial products and services are fair, transparent,
and competitive.
(b) OBJECTIVES..The Bureau is authorized to exercise its
authorities under Federal consumer financial law for the purposes
of ensuring that, with respect to consumer financial products and
services.
(1) consumers are provided with timely and understandable
information to make responsible decisions about financial transactions;
(2) consumers are protected from unfair, deceptive, or abusive
acts and practices and from discrimination;
(3) outdated, unnecessary, or unduly burdensome regulations
are regularly identified and addressed in order to reduce
unwarranted regulatory burdens;
(4) Federal consumer financial law is enforced consistently,
without regard to the status of a person as a depository institution,
in order to promote fair competition; and
(5) markets for consumer financial products and services
operate transparently and efficiently to facilitate access and
innovation.
(c) FUNCTIONS..The primary functions of the Bureau are.
(1) conducting financial education programs;
(2) collecting, investigating, and responding to consumer
complaints;
(3) collecting, researching, monitoring, and publishing
information relevant to the functioning of markets for consumer
financial products and services to identify risks to consumers
and the proper functioning of such markets;
(4) subject to sections 1024 through 1026, supervising covered
persons for compliance with Federal consumer financial
law, and taking appropriate enforcement action to address violations
of Federal consumer financial law;
(5) issuing rules, orders, and guidance implementing Federal
consumer financial law; and
(6) performing such support activities as may be necessary
or useful to facilitate the other functions of the Bureau.
SEC. 1022. RULEMAKING AUTHORITY.
(a) IN GENERAL..The Bureau is authorized to exercise its
authorities under Federal consumer financial law to administer,
enforce, and otherwise implement the provisions of Federal consumer
financial law.
(b) RULEMAKING, ORDERS, AND GUIDANCE..
(1) GENERAL AUTHORITY..The Director may prescribe rules
and issue orders and guidance, as may be necessary or appropriate
to enable the Bureau to administer and carry out the
purposes and objectives of the Federal consumer financial laws,
and to prevent evasions thereof.
(2) STANDARDS FOR RULEMAKING..In prescribing a rule
under the Federal consumer financial laws.
(A) the Bureau shall consider.
(i) the potential benefits and costs to consumers
and covered persons, including the potential reduction
of access by consumers to consumer financial products
or services resulting from such rule; and
H. R. 4173.606
(ii) the impact of proposed rules on covered persons,
as described in section 1026, and the impact
on consumers in rural areas;
(B) the Bureau shall consult with the appropriate
prudential regulators or other Federal agencies prior to
proposing a rule and during the comment process regarding
consistency with prudential, market, or systemic objectives
administered by such agencies; and
(C) if, during the consultation process described in
subparagraph (B), a prudential regulator provides the
Bureau with a written objection to the proposed rule of
the Bureau or a portion thereof, the Bureau shall include
in the adopting release a description of the objection and
the basis for the Bureau decision, if any, regarding such
objection, except that nothing in this clause shall be construed
as altering or limiting the procedures under section
1023 that may apply to any rule prescribed by the Bureau.
(3) EXEMPTIONS..
(A) IN GENERAL..The Bureau, by rule, may conditionally
or unconditionally exempt any class of covered
persons, service providers, or consumer financial products
or services, from any provision of this title, or from any
rule issued under this title, as the Bureau determines
necessary or appropriate to carry out the purposes and
objectives of this title, taking into consideration the factors
in subparagraph (B).
(B) FACTORS..In issuing an exemption, as permitted
under subparagraph (A), the Bureau shall, as appropriate,
take into consideration.
(i) the total assets of the class of covered persons;
(ii) the volume of transactions involving consumer
financial products or services in which the class of
covered persons engages; and
(iii) existing provisions of law which are applicable
to the consumer financial product or service and the
extent to which such provisions provide consumers with
adequate protections.
(4) EXCLUSIVE RULEMAKING AUTHORITY..
(A) IN GENERAL..Notwithstanding any other provisions
of Federal law and except as provided in section
1061(b)(5), to the extent that a provision of Federal consumer
financial law authorizes the Bureau and another
Federal agency to issue regulations under that provision
of law for purposes of assuring compliance with Federal
consumer financial law and any regulations thereunder,
the Bureau shall have the exclusive authority to prescribe
rules subject to those provisions of law.
(B) DEFERENCE..Notwithstanding any power granted
to any Federal agency or to the Council under this title,
and subject to section 1061(b)(5)(E), the deference that
a court affords to the Bureau with respect to a determination
by the Bureau regarding the meaning or interpretation
of any provision of a Federal consumer financial law shall
be applied as if the Bureau were the only agency authorized
to apply, enforce, interpret, or administer the provisions
of such Federal consumer financial law.
(c) MONITORING..
H. R. 4173.607
(1) IN GENERAL..In order to support its rulemaking and
other functions, the Bureau shall monitor for risks to consumers
in the offering or provision of consumer financial products
or services, including developments in markets for such products
or services.
(2) CONSIDERATIONS..In allocating its resources to perform
the monitoring required by this section, the Bureau may consider,
among other factors.
(A) likely risks and costs to consumers associated with
buying or using a type of consumer financial product or
service;
(B) understanding by consumers of the risks of a type
of consumer financial product or service;
(C) the legal protections applicable to the offering or
provision of a consumer financial product or service,
including the extent to which the law is likely to adequately
protect consumers;
(D) rates of growth in the offering or provision of
a consumer financial product or service;
(E) the extent, if any, to which the risks of a consumer
financial product or service may disproportionately affect
traditionally underserved consumers; or
(F) the types, number, and other pertinent characteristics
of covered persons that offer or provide the consumer
financial product or service.
(3) SIGNIFICANT FINDINGS..
(A) IN GENERAL..The Bureau shall publish not fewer
than 1 report of significant findings of its monitoring
required by this subsection in each calendar year, beginning
with the first calendar year that begins at least 1 year
after the designated transfer date.
(B) CONFIDENTIAL INFORMATION..The Bureau may
make public such information obtained by the Bureau
under this section as is in the public interest, through
aggregated reports or other appropriate formats designed
to protect confidential information in accordance with paragraphs
(4), (6), (8), and (9).
(4) COLLECTION OF INFORMATION..
(A) IN GENERAL..In conducting any monitoring or
assessment required by this section, the Bureau shall have
the authority to gather information from time to time
regarding the organization, business conduct, markets, and
activities of covered persons and service providers.
(B) METHODOLOGY..In order to gather information
described in subparagraph (A), the Bureau may.
(i) gather and compile information from a variety
of sources, including examination reports concerning
covered persons or service providers, consumer complaints,
voluntary surveys and voluntary interviews
of consumers, surveys and interviews with covered persons
and service providers, and review of available
databases; and
(ii) require covered persons and service providers
participating in consumer financial services markets
to file with the Bureau, under oath or otherwise, in
such form and within such reasonable period of time
as the Bureau may prescribe by rule or order, annual
H. R. 4173.608
or special reports, or answers in writing to specific
questions, furnishing information described in paragraph
(4), as necessary for the Bureau to fulfill the
monitoring, assessment, and reporting responsibilities
imposed by Congress.
(C) LIMITATION..The Bureau may not use its authorities
under this paragraph to obtain records from covered
persons and service providers participating in consumer
financial services markets for purposes of gathering or
analyzing the personally identifiable financial information
of consumers.
(5) LIMITED INFORMATION GATHERING..In order to assess
whether a nondepository is a covered person, as defined in
section 1002, the Bureau may require such nondepository to
file with the Bureau, under oath or otherwise, in such form
and within such reasonable period of time as the Bureau may
prescribe by rule or order, annual or special reports, or answers
in writing to specific questions.
(6) CONFIDENTIALITY RULES..
(A) RULEMAKING..The Bureau shall prescribe rules
regarding the confidential treatment of information
obtained from persons in connection with the exercise of
its authorities under Federal consumer financial law.
(B) ACCESS BY THE BUREAU TO REPORTS OF OTHER
REGULATORS..
(i) EXAMINATION AND FINANCIAL CONDITION
REPORTS..Upon providing reasonable assurances of
confidentiality, the Bureau shall have access to any
report of examination or financial condition made by
a prudential regulator or other Federal agency having
jurisdiction over a covered person or service provider,
and to all revisions made to any such report.
(ii) PROVISION OF OTHER REPORTS TO THE
BUREAU..In addition to the reports described in clause
(i), a prudential regulator or other Federal agency
having jurisdiction over a covered person or service
provider may, in its discretion, furnish to the Bureau
any other report or other confidential supervisory
information concerning any insured depository institution,
credit union, or other entity examined by such
agency under authority of any provision of Federal
law.
(C) ACCESS BY OTHER REGULATORS TO REPORTS OF THE
BUREAU..
(i) EXAMINATION REPORTS..Upon providing
reasonable assurances of confidentiality, a prudential
regulator, a State regulator, or any other Federal
agency having jurisdiction over a covered person or
service provider shall have access to any report of
examination made by the Bureau with respect to such
person, and to all revisions made to any such report.
(ii) PROVISION OF OTHER REPORTS TO OTHER REGULATORS..
In addition to the reports described in clause
(i), the Bureau may, in its discretion, furnish to a
prudential regulator or other agency having jurisdiction
over a covered person or service provider any
H. R. 4173.609
other report or other confidential supervisory information
concerning such person examined by the Bureau
under the authority of any other provision of Federal
law.
(7) REGISTRATION..
(A) IN GENERAL..The Bureau may prescribe rules
regarding registration requirements applicable to a covered
person, other than an insured depository institution,
insured credit union, or related person.
(B) REGISTRATION INFORMATION..Subject to rules prescribed
by the Bureau, the Bureau may publicly disclose
registration information to facilitate the ability of consumers
to identify covered persons that are registered with
the Bureau.
(C) CONSULTATION WITH STATE AGENCIES..In developing
and implementing registration requirements under
this paragraph, the Bureau shall consult with State agencies
regarding requirements or systems (including coordinated
or combined systems for registration), where appropriate.
(8) PRIVACY CONSIDERATIONS..In collecting information
from any person, publicly releasing information held by the
Bureau, or requiring covered persons to publicly report information,
the Bureau shall take steps to ensure that proprietary,
personal, or confidential consumer information that is protected
from public disclosure under section 552(b) or 552a of title
5, United States Code, or any other provision of law, is not
made public under this title.
(9) CONSUMER PRIVACY..
(A) IN GENERAL..The Bureau may not obtain from
a covered person or service provider any personally identifiable
financial information about a consumer from the financial
records of the covered person or service provider,
except.
(i) if the financial records are reasonably described
in a request by the Bureau and the consumer provides
written permission for the disclosure of such information
by the covered person or service provider to the
Bureau; or
(ii) as may be specifically permitted or required
under other applicable provisions of law and in accordance
with the Right to Financial Privacy Act of 1978
(12 U.S.C. 3401 et seq.).


(edited to fit the space)

(A) IN GENERAL..The decision to issue a stay of, or
set aside, any regulation under this section shall be made
H. R. 4173.611
only with the affirmative vote in accordance with subparagraph
(B) of 2.3 of the members of the Council then serving.
(B) AUTHORIZATION TO VOTE..A member of the Council
may vote to stay the effectiveness of, or set aside, a final
regulation prescribed by the Bureau only if the agency
or department represented by that member has.
(i) considered any relevant information provided
by the agency submitting the petition and by the
Bureau; and
(ii) made an official determination, at a public
meeting where applicable, that the regulation which
is the subject of the petition would put the safety
and soundness of the United States banking system
or the stability of the financial system of the United
States at risk.
(4) DECISIONS TO SET ASIDE..
(A) EFFECT OF DECISION..A decision by the Council
to set aside a regulation prescribed by the Bureau, or
provision thereof, shall render such regulation, or provision
thereof, unenforceable.
(B) TIMELY ACTION REQUIRED..The Council may not
issue a decision to set aside a regulation, or provision
thereof, which is the subject of a petition under this section
after the expiration of the later of.
(i) 45 days following the date of filing of the petition,
unless a stay is issued under paragraph (1); or
(ii) the expiration of a stay issued by the Council
under this section.
(C) SEPARATE AUTHORITY..The issuance of a stay
under this section does not affect the authority of the
Council to set aside a regulation.
(5) DISMISSAL DUE TO INACTION..A petition under this
section shall be deemed dismissed if the Council has not issued
a decision to set aside a regulation, or provision thereof, within
the period for timely action under paragraph (4)(B).
(6) PUBLICATION OF DECISION..Any decision under this
subsection to issue a stay of, or set aside, a regulation or
provision thereof shall be published by the Council in the
Federal Register as soon as practicable after the decision is
made, with an explanation of the reasons for the decision.
(7) RULEMAKING PROCEDURES INAPPLICABLE..The notice
and comment procedures under section 553 of title 5, United
States Code, shall not apply to any decision under this section
of the Council to issue a stay of, or set aside, a regulation.
(8) JUDICIAL REVIEW OF DECISIONS BY THE COUNCIL..A
decision by the Council to set aside a regulation prescribed
by the Bureau, or provision thereof, shall be subject to review
under chapter 7 of title 5, United States Code.
(d) APPLICATION OF OTHER LAW..Nothing in this section shall
be construed as altering, limiting, or restricting the application
of any other provision of law, except as otherwise specifically provided
in this section, including chapter 5 and chapter 7 of title
5, United States Code, to a regulation which is the subject of
a petition filed under this section.
(e) SAVINGS CLAUSE..Nothing in this section shall be construed
as limiting or restricting the Bureau from engaging in a rulemaking
in accordance with applicable law.
H. R. 4173.612
(f) IMPLEMENTING RULES..The Council shall prescribe procedural
rules to implement this section."

 

[mheslep]

Would the net effect of these points be less money in the general economy?

I think you mean less aggregate demand, not the amount of money which is pretty much set by the fed. Anyway, my opinion is no it won't, not on net. It suppose it will lessen the AD directly attributable to govt. spending. But if that were the only issue every job would be with the government.

Would reducing aid to the states force them to reform or simply do away with their pension plans (which seem to be a major factor wrt states' economic problems)?

The block grant puts the states in charge, it doesn't take their money away. As they're closer to the problem, they have incentive and ability to innovate.

Rhode Island applied to the feds for a waiver and run their own program:

The results? After 18 months, Rhode Island's Medicaid spending, which was projected to reach $3.8 billion, has declined to $2.7 billion, according to a report by Mr. Carcieri's Office of Health and Human Services. The state implemented a blizzard of reforms, including wellness programs, co-payments, audits of hospitals and nursing homes, fraud prevention, and letting seniors move from nursing homes into home and community care. The state has also saved a bundle by replacing federal "any willing provider" rules—which require that Medicaid dollars flow to any federally approved doctor or hospital regardless of cost—with competitive bidding.

Not every Rhode Island reform has worked, and some critics question whether the savings are as large as advertised. The state HHS is studying that issue now. But what almost no one challenges is the improvement in the quality of patient care.

The Providence Journal investigated the program and acknowledged last year: "To the surprise of many, everyone involved seems satisfied with the way the state's much-debated 'global Medicaid waiver' is working—at least for now."

Kathleen Connell, the head of Rhode Island AARP, says her group supports the waiver because "Seniors have absolutely benefited from being moved out of nursing homes into home and community-based care. The program is moving in the right direction for seniors."

Steven Costantino, the state's new Medicaid director and former Democratic chairman of the state's House Finance Committee, says "The trend rate of spending [in Rhode Island] has been 7.6% per year, and that's not sustainable. I do believe that the waiver offers us the flexibility to make the necessary policy changes to transform the system."

Note the last part and sustainability. A decision to maintain the status quo is a decision to collapse the Medicaid system.

 

[Oltz]

Just like large established companies do not mind over regulation because they can afford it and small/new companies can not, thus enabling them to buy out or undercut and bankrupt startups.

The burdens of Dodd-Frank fall harder on smaller banks that have less to leverage.

Local small banks are more likely to loan to local small bussiness as they better understand the needs of a community and what it can sustain. No more time to explain or get sources maybeo somebody else can pick this up and run with it.

 

[ThomasT]

I suppose it will lessen the AD directly attributable to govt. spending.

That's what I would guess. So, eg., companies that rely on tenants getting federal housing aid, and companies that rely on consumers getting federal food aid, etc., and the owners and employees of those companies would have to be hurt by reductions in aid programs, wouldn't they?

The block grant puts the states in charge, it doesn't take their money away. As they're closer to the problem, they have incentive and ability to innovate.

This makes sense to me. And RI seems to be getting positive results.

 

[ThomasT]

@ WhoWee,

That's a lot to digest. I was hoping you could narrow it down a bit, taking points that you think are bad for small banks and businesses, and talking about them one at a time.

I did notice this in there:

(3) outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens;

Which would seem to allow for the 'streamlining' that Romney advocates.

 

[mheslep]

That's what I would guess. So, eg., companies that rely on tenants getting federal housing aid, and companies that rely on consumers getting federal food aid, etc., and the owners and employees of those companies would have to be hurt by reductions in aid programs, wouldn't they?

From these actions?

53. Immediately cut non-security discretionary spending by 5 percent
54. Reform and restructure Medicaid as block grant to states
55. Align wages and benefits of government workers with market rates
56. Reduce federal workforce by 10 percent via attrition
57. Cap federal spending at 20 percent of GDP

No I don't see how these cut housing aid and food aid. Anyway helping the companies dependent on welfare spending is IMO a backwards way of getting the economy moving.

 

[ThomasT]

The burdens of Dodd-Frank fall harder on smaller banks that have less to leverage.

That's what I'm asking about. What exactly are those burdens (ie., specify them in the bill)?

 

[ThomasT]

From these actions? No I don't see how these cut housing aid and food aid.

53. Immediately cut non-security discretionary spending by 5 percent
54. Reform and restructure Medicaid as block grant to states
55. Align wages and benefits of government workers with market rates
56. Reduce federal workforce by 10 percent via attrition
57. Cap federal spending at 20 percent of GDP

I was thinking of 53.

We agree that 54 is a good thing to try.

Wrt 55 and 56, won't that reduce aggregate demand in the general economy?

57 seems sort of arbitrary to me.

Anyway helping the companies dependent on welfare spending is IMO a backwards way of getting the economy moving.

I don't think it's backward. Federal aid helps a lot of people, not just the direct recipients of it. Imo, reducing current fed aid levels is certain to negatively affect the general economy.

 

[WhoWee]

@ WhoWee,

That's a lot to digest. I was hoping you could narrow it down a bit, taking points that you think are bad for small banks and businesses, and talking about them one at a time.

I did notice this in there:
Which would seem to allow for the 'streamlining' that Romney advocates.

I posted the maximum 20,000 (had to trim 900 words from the section) to make a point. We need to start over (as Romney has indicated) with a plan that solves problems. This legislation is a nightmare for smaller institutions and raises the cost for all consumers (ultimately) - when compliance costs are passed on (compliance is a major cost in the insurance industry as well).

 

[ThomasT]

I posted the maximum 20,000 (had to trim 900 words from the section) to make a point. We need to start over (as Romney has indicated) with a plan that solves problems. This legislation is a nightmare for smaller institutions and raises the cost for all consumers (ultimately) - when compliance costs are passed on (compliance is a major cost in the insurance industry as well).

I agree that there needs to be a comprehensive plan that solves problems. However, I think that Romney is mainly dealing with problems that are problems for corporations, the financial sector, and the wealthy. Most of his points, imho, will not serve to improve the general economy and the US as a whole.

If Dodd-Frank is a "nightmare for smaller institutions", then exactly how/why is that? What are the mechanics of it, via projections wrt specific points in the bill? Examples like, say, "compliance with this particular rule entails three additional forms, and approximately x man-hours".

EDIT: By the way, I think I understand how constraining leveraging can reduce a financial institution's revenues. But, imho, if a financial institution needs to be overleveraged in order to stay in business, then it shouldn't be in business.

I also think I understand how certain lending requirements will reduce the number of loans that will be able to be made. Isn't this a good thing? Isn't making bad loans, and the subsequent mass defaulting, a big part of what caused the downturn in the economy?

 

[WhoWee]

I agree that there needs to be a comprehensive plan that solves problems. However, I think that Romney is mainly dealing with problems that are problems for corporations, the financial sector, and the wealthy. Most of his points, imho, will not serve to improve the general economy and the US as a whole.

If Dodd-Frank is a "nightmare for smaller institutions", then exactly how/why is that? What are the mechanics of it, via projections wrt specific points in the bill? Examples like, say, "compliance with this particular rule entails three additional forms, and approximately x man-hours".

I have an account with a local bank with 9 branches. After reading a few of the 848 pages of Dodd-Frank, how much money do you think my local bank will need to spend on lawyers, accountants, consultants, and administrative costs to comply?

 

[Oltz]

I have an account with a local bank with 9 branches. After reading a few of the 848 pages of Dodd-Frank, how much money do you think my local bank will need to spend on lawyers, accountants, consultants, and administrative costs to comply?

And the larger competition already has enough "legal counsel" on staff that decoding the regs has no additional cost.

 

[daveb]

I posted the maximum 20,000 (had to trim 900 words from the section) to make a point. We need to start over (as Romney has indicated) with a plan that solves problems. This legislation is a nightmare for smaller institutions and raises the cost for all consumers (ultimately) - when compliance costs are passed on (compliance is a major cost in the insurance industry as well).

If your objection is that it's so big, the problem with that is that if there are only a few words, then it would rely on court interpretation if there are any "gray areas". Sure it's long. Have you ever read any of the Code of Federal Regulations? 49 CFR (Department of Transportation) is a nightmare! However, I see it as useful since there is no wiggle room - the requirements are explicitly spelled out for shipping just about every hazardous material. I'd expect regulations spelling out the financial world to be long (though not as long as 49 CFR).

Now, if it is a nightmare as you claim, and raises costs, then how is it a nightmare, and how does it raise costs (I ask not because I don't believe but because I haven't read it, so don't know)?

 

[ThomasT]

I have an account with a local bank with 9 branches. After reading a few of the 848 pages of Dodd-Frank, how much money do you think my local bank will need to spend on lawyers, accountants, consultants, and administrative costs to comply?

I don't know. That's part of my question. Obviously, certain portions of the bill don't impact small banks. But some do. Which ones do? And exactly what do they require that would make Dodd-Frank such a huge problem for them?

As I understand it, the main aim of Dodd-Frank is to promote transparency, reduce overleveraging, break up institutions that are "too big to fail", thus obviating bailouts, and reduce the opportunities for and the probability of fraudulent practices. Obviously this is a huge problem, if actually enforced, for the sorts of institutions that were bailed out by the federal government. But I still don't understand why it's a problem for small banks.

I can see why it's a problem for the small businesses and individuals who shouldn't be given loans anyway.

 

[ThomasT]

I have an account with a local bank with 9 branches. After reading a few of the 848 pages of Dodd-Frank, how much money do you think my local bank will need to spend on lawyers, accountants, consultants, and administrative costs to comply?

I would guess that any bank, no matter how small, has a certain number of salaried people on staff who can each read a section of the bill and report, in depth, on how it pertains to their bank. Net cost so far ... $0.

Then we get into the area of increased paper work, etc, if any. Net cost ... $? .

 

[MarcoD]

Isn't making bad loans, and the subsequent mass defaulting, a big part of what caused the downturn in the economy?

It's a classical bubble, right? During the growth of the bubble, everybody seems to profit, and there's a lot of spending, and when the bubble collapsed, the game was over and everybody is angry about that they participated in a bubble economy. Well, except for those who profited, of course.

I also think I understand how certain lending requirements will reduce the number of loans that will be able to be made. Isn't this a good thing?

Define good. I am sure there are US economists who find the housing bubble a normal, maybe even healthy, phenomenon and a part of the normal US boom-bust cycle. If you now pump less credit into the US economy, I guess you might even end up with deflation. But I am clueless, really.

Personally, being Dutch with a somewhat awkward perspective, the more I read all different opinions, the more I feel inclined to convert to communism.

 

[AlephZero]

I don't care much for the insurance-related section or this expansion of powers:

Hm... why am I not surprised that somebody working in the insurance industry doesn't want the insurance industry to be regulated?

 

[mheslep]

I was thinking of 53.

Entitlement aid is not included in 'discretionary' spending, unfortunately.

I don't think it's backward. Federal aid helps a lot of people, not just the direct recipients of it.

Helping people with money is not the same thing as growing the economy, i.e. increasing productivity, building business and creating new jobs.

Imo, reducing current fed aid levels is certain to negatively affect the general economy.

The logical extension of your argument is that the government should be the entire economy, raising or lowering itself at will.

 

[WhoWee]

Hm... why am I not surprised that somebody working in the insurance industry doesn't want the insurance industry to be regulated?

Good point. However, from this perspective PPACA is my personal nightmare. Label this IMO - the compliance related legal/accounting/consulting for my current venture (a start up with several other firms) has cost more than my house. Regulations and mandates are not free and they absolutely add to consumer prices (eventually).

 

[ThomasT]

Entitlement aid is not included in 'discretionary' spending, unfortunately.

Sorry. So, this is a moot point as far as Romney is concerned? That is, he wouldn't reduce entitlement spending?

Helping people with money is not the same thing as growing the economy, i.e. increasing productivity, building business and creating new jobs.

I agree. But none of these is aimed at growing the economy:

53. Immediately cut non-security discretionary spending by 5 percent
54. Reform and restructure Medicaid as block grant to states
55. Align wages and benefits of government workers with market rates
56. Reduce federal workforce by 10 percent via attrition
57. Cap federal spending at 20 percent of GDP

And my point was that 53, 55, and 56 might reasonably be expected to reduce aggregate demand, and thus hurt the general economy. Speculating on the affect of 57 seems less clear to me.

The most reasonable approaches to improving things, imo, involve increasing regulatory capabilities (thus increasing stability and preventing massive financial debacles), and increasing revenue. Romney's plan seems to involve decreasing regulatory capabilities, and decreasing revenue.

The logical extension of your argument is that the government should be the entire economy, raising or lowering itself at will.

What do you mean by "the government should be the entire economy".

Anyway, I'm just making an assumption that reducing current fed aid levels would negatively affect the general economy. So, suppose that's done and that's what happens. Then what? Is the next logical step to increase the aid level back to at least what it was before the reduction, or for the government to take over ownership of everything?

 

[WhoWee]

If your objection is that it's so big, the problem with that is that if there are only a few words, then it would rely on court interpretation if there are any "gray areas". Sure it's long. Have you ever read any of the Code of Federal Regulations? 49 CFR (Department of Transportation) is a nightmare! However, I see it as useful since there is no wiggle room - the requirements are explicitly spelled out for shipping just about every hazardous material. I'd expect regulations spelling out the financial world to be long (though not as long as 49 CFR).

Now, if it is a nightmare as you claim, and raises costs, then how is it a nightmare, and how does it raise costs (I ask not because I don't believe but because I haven't read it, so don't know)?

Romney has a great deal of experience dealing with financial regulations - isn't it possible he might be able to streamline the process of regulation?

Here is an interesting discussion of Dodd-Frank - please note the timeline (through 2015) for implementation and the ongoing uncertainty of the program (sounds a bit like PPACA).

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2574

"'A Major Transformation': The Pros and Cons of the Dodd-Frank Act
Published: January 11, 2011 in Knowledge@Wharton "

 

[CAC1001]

Hm... why am I not surprised that somebody working in the insurance industry doesn't want the insurance industry to be regulated?

Not all industries dislike regulation; quite a few, or at least the big companies within them, like regulations, as it let's them knock out of business their smaller competitors.

 

[mheslep]

Sorry. So, this is a moot point as far as Romney is concerned? That is, he wouldn't reduce entitlement spending?

Yes he would, though those 4-5 points don't cover that. Any half responsible President has to reduce at least the rate of increase in Medicare spending, or it will collapse. The trick will be in doing so in manner that controls cost while actual medical benefit maintains or improves. To my mind there's only one method invented, so far, that accomplishes this goal: competition in the free market, i.e. price signaling, transparent reporting on medical quality, etc.

I agree. But none of these is aimed at growing the economy:

I think they are by reducing the deficit. I argued elsewhere that that a huge deficit on top a huge debt drags on the economy: absent a big cut in spending, people rationally anticipate the future holds large tax increases and restrain consumption accordingly.

 

[ThomasT]

Yes he would, though those 4-5 points don't cover that.

I was thinking about the food and housing stuff more so than the medical.

Any half responsible President has to reduce at least the rate of increase in Medicare spending, or it will collapse.

Agreed.

The trick will be in doing so in manner that controls cost while actual medical benefit maintains or improves.

The $64K conumdrum.

To my mind there's only one method invented, so far, that accomplishes this goal: competition in the free market, i.e. price signaling, transparent reporting on medical quality, etc.

It seems to me that if the healthcare industry was totally free market, with, say, nothing like medicare and medicaid, then a lot more people would be without adequate health care than are now. So, I guess I don't know what you're getting at. Healthcare costs are, afaik, across the board, inordinately inflated. The government is paying a lot of these costs. So, why can't the government simply say that "this" is what will be paid for this service or item, and no more?

I think they are by reducing the deficit. I argued elsewhere that that a huge deficit on top a huge debt drags on the economy: absent a big cut in spending, people rationally anticipate the future holds large tax increases and restrain consumption accordingly.

I don't know about this reasoning. I really don't think that the national debt or the deficit has anything to do with how people spend their money.

As far as I can tell, the average person's buying power is being continually eroded. That is, prices go up, little by little, but wages and salaries don't keep up with that trend. So, there is, continually, less aggregate demand for consumer products. I don't see how reducing the national debt or deficit helps this. But I do see how taking money out of the general economy via reductions in welfare programs might contribute to the problem.

 

[mheslep]

It seems to me that if the healthcare industry was totally free market, with, say, nothing like medicare and medicaid, then a lot more people would be without adequate health care than are now. So, I guess I don't know what you're getting at. Healthcare costs are, afaik, across the board, inordinately inflated. The government is paying a lot of these costs. So, why can't the government simply say that "this" is what will be paid for this service or item, and no more?

There could still be a competitive free market, unwarped by the government, by giving money directly to the people in need, via a health voucher or similar mechanism, and let them decide how to spend it. No tax games via the current employer tax deduction or government payments to providers. Then we get a reduction in cost from a competitive system which helps everyone, and which further aids the plight of those least equipped to afford healthcare.

 

[turbo]

As far as I can tell, the average person's buying power is being continually eroded. That is, prices go up, little by little, but wages and salaries don't keep up with that trend. So, there is, continually, less aggregate demand for consumer products. I don't see how reducing the national debt or deficit helps this. But I do see how taking money out of the general economy via reductions in welfare programs might contribute to the problem.

This is something that never gets headlines, but is a major force in the erosion of our economy. People of modest means spend all of their money, and they tend to spend it locally. Erode their buying power, and you erode the economies in their neighborhoods. If Mitt doesn't care much about the poor, then he doesn't understand local/regional economies, and can't be trusted with the Presidency. I don't want a President that is overly concerned with the health of Wall Street (we already have one!) but there has to be some shift of focus to the poor and the middle-class who are seeing their incomes eroded and their options limited.

I'm about to turn 60 in another month. I would never have envisioned years ago that the US would be studded with full homeless shelters, warming sites, and food-programs where homeless people might get a sandwich and a hot drink. It's so sad.

 

[WhoWee]

It seems to me that if the healthcare industry was totally free market, with, say, nothing like medicare and medicaid, then a lot more people would be without adequate health care than are now. So, I guess I don't know what you're getting at. Healthcare costs are, afaik, across the board, inordinately inflated. The government is paying a lot of these costs. So, why can't the government simply say that "this" is what will be paid for this service or item, and no more?

The Center for Medicare and Medicaid do set the standards.
http://www.cms.gov/apps/physician-fee-schedule/

 

[ThomasT]

There could still be a competitive free market, unwarped by the government, by giving money directly to the people in need, via a health voucher or similar mechanism, and let them decide how to spend it.

The voucher thing is an interesting idea, but I think they would have to be vouchers that could only be spent on healthcare services. Is that what you meant?

No tax games via the current employer tax deduction or government payments to providers. Then we get a reduction in cost from a competitive system which helps everyone, and which further aids the plight of those least equipped to afford healthcare.

I don't see how this would reduce costs.

 

[ThomasT]

The Center for Medicare and Medicaid do set the standards.
http://www.cms.gov/apps/physician-fee-schedule/

I haven't read this yet. But, apparently, they haven't set the prices low enough. For example, the cost of getting a two block ride in an ambulance to a local hospital, and a cursory exam in an emergency room, would, in most metropolitan areas, be around $1000. For something that, imho, should cost around, say, $50.

 

[WhoWee]

Mitt Romney talks a good bit about the Medicaid system - as a former Governor he knows a great deal about how the system works. The following graph demonstrates the expansion of Medicaid spending over the past few years. You can also view your state.

http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html

 

[mheslep]

The voucher thing is an interesting idea, but I think they would have to be vouchers that could only be spent on healthcare services. Is that what you meant?

Yes.

 

[WhoWee]

I haven't read this yet. But, apparently, they haven't set the prices low enough. For example, the cost of getting a two block ride in an ambulance to a local hospital, and a cursory exam in an emergency room, would, in most metropolitan areas, be around $1000. For something that, imho, should cost around, say, $50.

Most insurance carriers would agree with your assessment.

 

[ThomasT]

This is something that never gets headlines, but is a major force in the erosion of our economy. People of modest means spend all of their money, and they tend to spend it locally. Erode their buying power, and you erode the economies in their neighborhoods. If Mitt doesn't care much about the poor, then he doesn't understand local/regional economies, and can't be trusted with the Presidency.

Agreed. And this is my current assessment of Romney (as well as all the other GOP candidates and the current president). But I will say that I think he could be trusted to be the usual sort of president. Which, for me, while not catastrophic, isn't very inspiring.

I don't want a President that is overly concerned with the health of Wall Street (we already have one!) but there has to be some shift of focus to the poor and the middle-class who are seeing their incomes eroded and their options limited.

I agree. I would like to see the nationalization of the financial sector (a great source of income for the government), and an increase in the minimum wage to, say, something more than $12/hour. I think this would be a boon to the general economy as well as improve the lives of millions of working Americans.

I'm about to turn 60 in another month. I would never have envisioned years ago that the US would be studded with full homeless shelters, warming sites, and food-programs where homeless people might get a sandwich and a hot drink. It's so sad.

Well, I'm 64, and things do seem to be a bit worse now than they were, say, 40 years ago. But that's just my subjective take on things from my very limited experience.

 

[ThomasT]

Most insurance carriers would agree with your assessment.

So why doesn't the government, a principle payer, just lower what it will pay for services and items?

 

[ThomasT]

Mitt Romney talks a good bit about the Medicaid system - as a former Governor he knows a great deal about how the system works. The following graph demonstrates the expansion of Medicaid spending over the past few years. You can also view your state.

http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html

Thanks for the info. I'm sure that Romney knows a great deal about how the system works. So, why not just significantly lower what the government is willing to pay for services and hardware? As far as I can tell, wrt medicare and medicaid, it's a buyers market.

 

[russ_watters]

So why doesn't the government, a principle payer, just lower what it will pay for services and items?

Do you mean dictating the price? I suspect if an ambulance company is only allowed to get paid $50 per ride, most will just quit the business. Or should the government also force people to work the jobs and force the pay rates too?

 

[ThomasT]

Do you mean dictating the price? I suspect if an ambulance company is only allowed to get paid $50 per ride, most will just quit the business. Or should the government also force people to work the jobs and force the pay rates too?

Are you saying that they can't make a profit charging $50 for a two-minute ride and a five-minute examination?

 

[russ_watters]

Are you saying that they can't make a profit charging $50 for a two-minute ride and a five-minute examination?

You think the average ambulance pickup takes 7 minutes and that's all you're paying for?