Economist Henry “Dr. Doom” Kaufman on Tuesday weighed in on why he dislikes the Dodd-Frank Act and why Trump should bring back the Glass-Steagall Act.
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The Dodd-Frank Wall Street Reform and Consumer Act, which was passed by the Obama administration, amid the 2008 financial crisis, was put in place to regulate the big banks.
The former Salomon Brothers chief economist believes that the Trump administration should eliminate the Dodd-Frank Act.
“I never appreciated Dodd-Frank. It was too big, too much, [and] too complicated. The underlying issue dealing with Dodd-Frank is what to do with big institutions that are too big to fail,” he said.
The Glass-Steagall Act, which was put in place during the Great Depression to separate investment and commercial banking activities, was taken down by both Democrats and Republicans in 1999.
Kaufman agrees that President Trump should bring back the Glass-Steagall Act.
“Both [Parties] favored the removal of the Glass-Steagall Act… It was a mistake because the central bank did not understand or didn’t want to warn about the consolidation that was going to take place in the financial system,” he said.