How Third Way Thwarted Attempts to Sabotage Dodd-Frank
The Dodd-Frank bill, passed in the wake of the 2008 calamity in the financial sector, was a vital part of stabilizing the economy and moving out of a recession. By 2012, Dodd-Frank reforms had helped bring economic stability, and they could potentially add $351 billion to the US economy over the next decade—but the law has been under attack since the moment it was passed in 2010. Those on the right have blamed Dodd-Frank for slowing economic recovery, and those on the left have considered the law ineffective and called for a total overhaul.
Enter Third Way. We have staunchly defended Dodd-Frank for years: holding events with key Senators, firing off a litany of educational products, and presenting in front of the Democratic caucus.
But most importantly, we’ve challenged the extremes. Our educational work on capital markets wasn’t just about fighting back against Republicans—it was about creating a more informed debate on both sides. We arranged intensive financial regulation education for dozens of top staffers at Wharton’s business school. We testified to the positive impact of Dodd-Frank to congressional committees. We developed a speaker series (with key figures like Paul Volker and Sheila Bair) that has drawn hundreds of staffers from both sides of the aisle. And we rolled out a consistent drumbeat of reports quantifying the ways Dodd-Frank strengthens the US economy.
The end result of our efforts? A bipartisan constituency dedicated to protecting DoddFrank’s most substantial reforms.
We realized the full power of our strategy when the House voted in 2017 on the Financial CHOICE Act, the most serious legislative threat to emerge against Dodd-Frank. At the bill’s hearing, ours was the only expert testimony from a left-leaning group that defended Dodd-Frank from a pro-market perspective. We also published a report quantifying the value of financial stability provided by the law, which Members of Congress cited in debates on the House floor.
Our educational groundwork had laid a rock-solid foundation of understanding of the importance of Dodd-Frank. As a result, the CHOICE Act had no chance: it died instantly in the Senate and was immediately replaced with a narrower, bipartisan bill that makes necessary and reasonable tweaks to the law while leaving its central components intact.
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