Pub. 4 2016 Issue 3

www.uba.org 4 F ree market capitalism is the driving force pulling millions of people and families out of poverty around the world every year. The U. S. free market economy has lead the way for this emergence of prosperity. One of the critical contributing factors of America’s success is that decisions about how capital is allo- cated are decentralized. Decisions about who gets capital, what do they do with it, and what rates of return and wealth creation can be achieved are made in thousands of local communities throughout America by local bankers and business owners who are intimately connected with the needs of their communities. But with the passage of Dodd Frank, Congress has begun the process of consolidating economic power in America. Since the passage of Dodd-Frank, community bank market share has dropped at double the rate of the drop in market share caused by the crisis itself. That means that Dodd Frank has been twice as damaging to community banks as the financial crisis. In short, we are losing community banks at a rate of more than one per day! It is becoming very clear that Dodd-Frank wasn’t really about Wall- Street, it’s about a few political elitists in Washington D.C. who want to aggregate economic power inside the beltway because they think they know how to allocate our nation’s capital better than the collective decisions of millions of Americans. Their goal is to drive the nations assets into a handful of large institutions that they can regulate and control. This plan actually empowers their friends on Wall Street! It’s imperative that Americans realize that Dodd-Frank was an attempt to use the recent economic crisis to shift economic power away from their local community and concentrate it in Washington D.C. Ironically, Washington D.C. is exactly where the last economic crisis began. If you find this hard to believe, just look at the opponents of Dodd-Frank reform. These are the same people who openly ad- vocate for socialist based economic solutions and a bigger federal government as the answer to all of our problems. These zealots don’t like free market capitalism. They don’t like wealth creation unless it’s completely uniform. They view the pursuit of happi- ness as a collective goal rather than an individual pursuit. They opportunistically used a crisis, created by flawed federal housing policies to create a false narrative that vilified the pillars of free market capitalism – traditional banks. Everyone who knows anything about the crisis knows that traditional banks did not cause it. But since Dodd-Frank, we have been losing traditional banks at historic rates and key members of Congress oppose any reform. It makes absolutely no sense, unless that was their plan all along. It’s time to set aside all the false narratives and fight the war at hand – the war against the concentration of power in a strong and unaccountable central government in Washington D.C. It’s a war that has raged since the founding of our nation. The popu- larity of the musical “Hamilton” is a well-timed reminder that the seduction of a strong central government has always existed and has often overcome even some of the brightest minds throughout history. But history clearly teaches us the pitfalls of concentrat- ing power in a strong central government and we are watching this playing out right before our eyes in the form of the many unintended consequences of the Dodd-Frank Act. n The Bottom Line By Howard Headlee, President, Utah Bankers Association Concentration of Power The popularity of the musical “Hamilton” is a well-timed reminder that the seduction of a strong central government has always existed and has often overcome even some of the brightest minds throughout history.