Peter Wallison: Dodd-Frank slowing economy

On this week’s episode, anchor Jeff Greenfield speaks with Peter Wallison of the American Enterprise Institute.

Wallison says the Dodd-Frank financial reform bill has actually slowed our economy.  He blames the 2008 financial crisis on federal housing policies which he says led to the sub-prime mortgage meltdown.

Do you agree? Share your thoughts in the comments below.

 

Comments

  • Jbowen43

    It wasn’t government policy that caused the housing crash it was greed and financial products created by banks to satisfy the greedy. Corrupt banks and loan officers are more to blame that the government or the borrowers.

  • Sonny

     You are correct.   Need To Know should never invite Mr. Peter Wallison to give his opinion ever again.   For example, he said that Dodd-Frank caused the July 2010 drop in the GDP.   Anyone not bias would realize that the Tea-Party insistence on not raising the Debt Ceiling and the subsequent drop in the US credit rating (1st time is history of the nation) was the cause.  

  • Dlhouck_nm

    Who lobbied congress to create the sub prime mortages?  Answer: the financial industry so they could write more paper to make more money.

  • Guest

    We need the reinstate the Glass–Steagall Act

  • Anonymous

    The Bond rating agencys are the ultimate example of how self regulation is suposed to work. In fact all the Bond Rating agencies rated the subprime products as the best possible investment grade. Rating agency employees who had a problem with this rating were fired! The Bond Rating Agencies make huge amounts of money for what they do. They get their money from the organizations they are rating? Who in their right mind would think they can be objective about their ratings given that scenerio? In fact the events of 2007-08 are irrefutable proof they failed…totally.. to give rational financially justafiable ratings to these bonds…billions and billions of dollars of them. The financial collapse cost the world about $35 Trillion dollars…lost over all due to this whole bull shit they call the financial markets. This is absolute proof that markets CANNOT regulate themselves. If Standard and Poors, Moody’s, etc are just rubber stamps for Huge fees, then they irrefutably cannot regulate themselves. Undeniably the government must have good laws, wise knowledgeable regulations, enough regulatiors and the will to enforce those good laws. The belief in free markets without regulations is a false god, and proof that those who run the system are brainwashed beyond the ability to think/act rationally is proven withd this analysis. They cannot even claim they have “enlighted self interests.” There is no enlightment in totally destroying the markets thru mindless greed and mindless dogma that doesn’t acknowledge the irrefutable shortcommings that are inherint in unregulated markets. Did these morons learn anything from 2008? The government is obviously not the problem here. I am completely behind free markets.But to say regulation ”caused” this is insane. There is a huge cost to that kind of “free markets”  Except those who took the money and run. Those who condemn good regulation are just crooks..

  • Bill Jefferys

    This guy told three flat-out lies in a row. Three strikes and you are out.

    But then, consider the source: American Enterprise Institute, a so-called “think tank” full of right-wing toadies.

    It is beyond me why “Need to Know” goes to sources like this. I guess they are trying to be “Fair and Balanced”, which these days seems to mean “balance a mainstream opinion by bringing in the right-wing kooks”. We don’t need this kind of “balance”, PBS.

  • Sonny

    This is the most important change that needed to be in Dodd-Frank.  After the Roaring 20′s, the Great Depression was fixed by Glass-Steagall legislation.  For the next 70 years, no banks were allowed to gamble depositors money on high risk ventures.  Soon after this Act was repealed, the same type of financial consequences return.  An even worse crash will occur in the future unless Glass-Steagall in reinstated. 

  • Sonny

    The Bond rating agency was part of the US government at one time.  I don’t know what trick the lobbyist used to change it, but this also has to be put under government control.   If you think about it, it like paying your teacher in order to get a higher grade. 

  • Sonny

    The balance tipped to the right when the Bush appointments to the Supreme Court allowed BIG MONEY to influence elections.   I don’t blame PBS or NPR for trying to be fair.  Now It is difficult to figure mainstream when big money corporations are allowed to muddy the waters. 

  • http://profile.yahoo.com/RBAYLTG4GF76YEQPIPHXFKON74 Mike C

     

    Peter Wallison stated that the housing crisis was brought on
    by the governments housing policy.  He
    stated that the government followed policies to encourage people to purchase homes
    whether they could afford it or not.

     

    However the facts totally undermine this popular lie to
    place the blame on the government and not the Too Big To Fail Banks fraud on the
    government.

     

    First, “More than 84 percent of the sub-prime mortgages in
    2006 were issued by private lending”. 
    This statement can be found in the article “Lest We Forget: Why We Had A
    Financial Crisis” by Steve Denning on Nov 22, 2011 in forbes.com (http://www.forbes.com/sites/stevedenning/2011/11/22/5086/)

     

    Second, the lowering of the lending standards were not only
    needed to cash in on the greed of the TOO BIG TO FAIL BANKS, but to defraud the
    government. The case in point is Citibank.

     

    In the article “How Citibank Dumped Lousy Mortgages On The Government”
    Cora Currier of ProPublica on Feb 16, 2012 (http://www.propublica.org/article/how-citibank-dumped-lousy-mortgages-on-the-government)
    details the story of whistle blower Sherry Hunt an employee of Citi’s mortgage department.

     

    It is here where we find out that Citibank “… passed along subpar loans to
    the FHA until very recently, making “substantial profits through the sale
    and/or securitization of FHA-backed insured mortgages” while “it
    wrongfully endorsed mortgages that were not eligible.”

    In spite of the fact that the government sued and won a
    settlement from Citibank for a mere $158 million, no one from Citibank has been
    prosecuted for this obvious fraud.

     

    At a side note, Bernie Madoff went to jail because he stole
    from millionaires.  TOO BIG TO FAIL BANK
    employees get huge bonuses for bailout money supplied from the taxpayers of
    this country.

     

    I am saddened by the fact that Jeff Greenfield let Mr. Wallison
    off the hook on this blatant lie.

    I would expect a show from PBS would put to bed
    these lies and promote the truth so the American people can truly see that the enemies
    of out country are these out of control financial corporations that are driving
    the US
    to financial ruin while profiting from fraud.

  • lgfromillinois

    Mr. Wallison blames naive and desparate people seeking a home and a mortgage for the collapse five years ago.  He did NOT meantion that these mortgages were combined into toxic instruments and sold as ‘safe’ investments to unwitting investors.  Do you blame a dog who barks and begs to be let out, and you ignore him, when he has an accident on the floor?  If you do, you are a careless and unfeeling master.  Just like a big bank.

  • Mitchn

    In the thirty years I have been a WNET 13 watcher and supporter, this was hands down the worst five minutes of television the station has ever aired. Greenfield’s puffball questioning of Wallison, a notorious right-wing shill for Wall Street and the the banking industry, was lame and disgracefully inept. Journalism? Not even close. Kabuki theater? Only if you have a sense of humor. Time for Greenfield to retire.

  • Aash

    This was the worst segment I’ve ever seen on any PBS news show.  Everything he spoke are either 1) deliberate lies, or 2) woeful ignorance.

  • Mr. Brain

    God…Wallison is completely full of bullshlt.

    The Dodd-Frank Act causing the drop in U.S. GDP, slowing the economy?  Actually it was the winding down of the 2009 Stimulus Program, starting in late 2010, that lowered GDP.
    http://www.cbo.gov/publication/43274

    The financial crisis was caused primarily by Federal housing policies that created the sub-prime mortgage collapse?  Not according to the exhaustive, year and a half long study done by the Fiscal Crisis Inquiry Commission (FCIC).  Not even CLOSE.
    http://fcic.law.stanford.edu/

    His defense of Dimon and JP Morgans “hedge” trade that blew up in their faces was especially nauseating.  PBS Newshour gives a FAR more accurate account of what went down.
    http://www.pbs.org/newshour/businessdesk/2012/06/breaking-down-the-finer-points.html

    The rank misinformation spewed by people like Wallison must be exposed, and crushed, otherwise we’re doomed to repeat the same mistakes over an over again, and people like him will continue to profit from it.

  • jan

    When you have guests like this on, particularly if the invitations appear to be issued only to people from the far right of the spectrum, and don’t ask any hard or serious questions or do not follow up on the guests answers with hard questions and insist on an answer, you reinforce the feeling that the deck is stacked against anyone and everyone who isn’t at least a millionaire.  This appears to be little more than a cameo appearance by Mr. Wallison. 

    People have been taking a financial beating for quite a few years now and interviews like this ignore what’s been going on to the average person and try to deflect blame on everyone but the guilty. 

  • jan

    In my opinion, what Mr. Wallison appears to be attempting is another round of PR and laying blame on victims instead of finding an actual solution to a very real problem.  What he’s forgetting is when problems become so bad, so corrupt, so in-your-face, no amount of PR is going to smooth things over.  There are some people who probably should have been threatened with prison time but were not and as a result, nothing improved. 

  • Jar124c41

    Need to know – 7/15/12 – peter wallison

     

    Wallison expresses the opinion that, after Dodd/Frank in
    July, 2010 the GDP fell. After Dodd Frank, the sun began putting out
    potentially damaging solar flares. Both are the prime examples of the post hoc
    fallacy. How can you repect the opinion of someone doesn’t have better
    substantiation for an opinion like that?
     

  • Jimsandersaz

    Very! disappointed in Jeff Greenfield tossing softballs to Wallison without letting the Better Markets guys respond to that tripe.
    –Jim Sanders– 
    Tucson

  • Jimsandersaz

    I really do wonder what value you guys add to an informed public. Sell-out!