Down with (Banking) Profits!

A correspondent pointed me to this op-ed in the New York Times, which quotes some people in the know saying that the Dodd-Frank regulation is too complex and will compromise the financial industry's ability to do its job and drive the economy forward:

However you feel about banks — and I know that many people harbor enormous, justifiable anger at what they did — our economy can’t function without them. And they needed to be regulated. But three years ago, overly complex securities were one of the root causes of the crisis. So why, then, do we have faith that overly complex regulations will prevent the next crisis? Sad but true: they won’t.       

Now I don't pretend to know or understand what's in Dodd-Frank; frankly I'm clueless about the details of it so I can't really defend the bill.

However, I will say that if the new rules make banks less profitable, that would be a feature, not a bug. A big problem with the banking industry is that they're making too much money by taking risks that are too destructive to the rest of the economy. We need those reckless risk-taking types to get out of the banking industry and go into something that won't bring the whole economy down- I'd rather see those guys create tech startups or something.

One other thing I'd say is that Dodd-Frank need not be a static reform. If Republicans would return from CrazyTown, they could propose changes to Dodd-Frank that Democrats would probably be happy to approve. Right now, however, they seem to be saying that we should just return to the pre-2008 world of regulation that we know was a failure.