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Opinion

Dodd-Frank will test both Romney and Obama

By Roy C. Smith, Kenneth G. Langone Professor of Entrepreneurship and Finance and Professor of Management Practice

roy smith opinion article

... everyone agrees that Dodd-Frank was ambitious to a fault, and writing all the rules that it requires is both demanding and very complex.

Mitt Romney’s appointment of deficit hawk Paul Ryan as his running mate was intended to shift the main debate to economic issues where the parties are sharply divided. The last time economic issues took centre stage with such significant importance was 20 years ago when Ross Perot, as an independent, gathered 19% of the popular vote in support of his deficit reduction agenda.

Romney: has promised deficit reduction through reform of entitlements

His strategy denied George HW Bush the White House, handing it instead to a very fortunate Bill Clinton who won with just 43% of the vote. Perot argued that a deficit of 4.5% of gross domestic product was reckless and irresponsible. It is now 8%, which the Romney/Ryan duo hope might be enough to drive a significant number of worried voters to them.

But voters are also suffering from a decade of no growth, a shattered real estate market and high unemployment. The latest tick-up in the housing market is unlikely to make much difference.

Voters dislike the deficit, but many believe that America’s prolonged economic slump, which has weakened their financial security, is a greater problem.

A recent New York Times/CBS poll has showed Romney better able to “deal with the deficit” (51%-43%), but Obama was slightly preferred as being able to “handle the economy, taxes and unemployment”. Overall Obama was the choice of “likely voters” (49%-46%). The election is still close, but last week’s polls show that despite choosing Ryan as a running mate, Romney is falling further behind Obama.

Read full piece as published by Financial News.