Chamber of Commerce Tom Donohue slammed the Obama administration in a speech at Nasdaq Wednesday morning, saying the last eight years of "restrictive, punitive, redundant and overlapping regulations" explain why the economic recovery has been so slow. A key part of the problem, he said, was the "vilification" of the financial sector.
"That's one of the primary reasons we are stuck in an economy with a glass ceiling of 2 percent growth," Donohue said. "The bottom line is that the primary goal of financial regulation must not be financial stability alone. Growth must be the top priority."
Donohue pointed in particular to efforts by the Consumer Financial Protection Bureau to expand the reach of the Dodd-Frank financial reform law and the Labor Department's recent rule increasing legal liability for investment advisers whose advice to clients doesn't pan out.
"Checks and balances need to be applied to the Consumer Financial Protection Bureau just as they are with any other agency. The bureau's large budget is not subject to congressional approval, and too much power is vested in its director, who answers to no one," he said.
He said the regulators' efforts to wring risk completely out of the financial system had replaced promoting growth. He added that it wasn't an accident; the advocates of the policies simply don't care about growth in the first place, he argued. Instead, they blame the financial sector "for everything from income inequality to the common cold."
Donohue's speech came in the midst of a presidential election that has seen aggressive anti-Wall-Street rhetoric on the Democratic side and featured the emergence of a Republican candidate, Donald Trump, who, despite being being a business mogul himself, has bashed the financial sector as well. Donohue said such thinking is ignorant of how the economy works and said one of its most prominent advocates in Congress had her own agenda for promoting it.
"Let's be clear: Sen. [Elizabeth] Warren and her allies don't have a reform agenda. They have a big goverment agenda. They want to centralize all decision-making in Washington. They mistakenly think that they can make better decisions than the American people who rely on our financial system... They are looking to gain more power for themselves," Donohue said. "Their proposals would trap us in this anemic recovery."
Donohue stressed that the Chamber was not opposed to regulations in and of themselves. Indeed, he argued that they were necessary to allow for competition. But he said they had to be applied smartly.
"The next administration, regardless of party, must flatly reject the no-growth agenda we're hearing from politicians and Wall Street critics," he said.