Wright in New York Post: Financial Regulatory Bill Would Reduce Jobs Creation
Professor Joshua Wright estimates that credit restrictions in the financial regulatory bill now before Congress would have the effect of reducing job creation by 4.3%, or about 60,000 fewer jobs per year.
Consumer protection provisions in the bill have the potential to reach beyond credit cards and restrict availability of all forms of credit, at the same time raising costs to consumers, according to the New York Post. In addition, some financial experts believe new restrictions on "angel investors," who provide start-up capital for for business ventures, could threaten to shut down that investment market.
Dodd's jobs-killer, New York Post, April 20, 2010. By Mark A. Calabria.
"Reductions in credit directly result in declines in job creation. We know, for instance, that the two most common sources of funds for starting businesses are home-equity and credit-card debt. The bursting of the housing bubble largely eliminated the first option; now Washington is trying its best to kill the second.
"Dodd's proposed 'consumer protections' would reach beyond credit cards and restrict the availability of all forms of credit, while raising costs.
"The bill would expand the depth and scope of federal financial regulation, raising both regulatory and litigation costs that are ultimately passed on to the consumer. Dodd gives his proposed bureau almost unlimited authority to decide which products and services it can regulate.
"The increased cost of offering products to higher-risk borrowers would likely result in many of those products being eliminated from the marketplace, reducing credit for the very individuals who need it the most.
"George Mason University Professor Joshua Wright estimates that the Dodd bill's credit restrictions would reduce job creation by 4.3 percent -- about 60,000 fewer jobs every year."