Dodd-Frank Achieving Results of Axing Financial Jobs
If Dodd-Frank was designed to increase layoffs in the financial sector, it is an overwhelming success. As the WSJ points out, Bank of America's announcement this week to cut 30,000 jobs is coincidentally tied to the timing of the implementation of Dodd Frank's draconian "swipe fee" limitation, which will reduce revenue at B of A alone by almost half a billion dollars.
Restricting bank profits on a particular product may have obvious populist appeal, but politicians shouldn't be surprised if banks decide that such consumer credit operations aren't good businesses and can function with fewer employees. Add in the various federal programs aimed at extracting penalties for this or that mortgage-foreclosure error and it's understandable that a bank would have trouble forecasting growth to justify its current work force.
...But given the real-world results for bank employees, politicians should not be allowed to pretend that there are no consequences when they deliberately reduce the profitability of employers. Mr. Obama proposed last week to spend some $450 billion more in outlays or tax credits to create more jobs, but it would have cost a lot less to save these 30,000.