Big Wall Street banks caused a financial crisis and brought the nation to the brink of economic collapse; President Obama signed the Dodd-Frank Act to punish those banks and end government bailouts of too-big-to-fail financial institutions.
That’s what President Obama believes, at least. He said so when he signed Dodd-Frank into law on July 21, 2010: Wall Street banks long had tricked Americans with fine-print traps, opaque investment pitches, and “abusive practices in the mortgage industry,” but Dodd-Frank would foster transparency and competition, and “make sure that everybody follows the same set of rules.” Wall Street banks had used the threat of systemic financial collapse to extort bailouts from the public, but Dodd-Frank would ensure that “the American people will never again be asked to foot the bill for Wall Street’s mistakes.” Above all else, there would be “no dividing line between Main Street and Wall Street. We rise or fall together as one nation” under Dodd-Frank.
So you can imagine the president’s frustration two years later, when he stood onstage at the first of three presidential debates and heard his opponent paint a very different picture. Said Mitt Romney:
Dodd-Frank was passed. And it includes within it a number of provisions that I think [have] some unintended consequences that are harmful to the economy. One is it designates a number of banks as too big to fail, and the y’re effectively guaranteed by the federal government. This is the biggest kiss that’s been given to—to New York banks I’ve ever seen.