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News March 26, 2012 Issue

"Dodd-Frankery"

Get ready Webster, make room for a new noun.

What do you call it when inexplicable conflicts of law arise?

Dodd-Frankery.

What happens when even the lawmakers can’t make sense of the legislation?

Dodd-Frankery.

The Economist, exasperated by the "confused, bloated" financial reform law, has coined the term "Dodd-Frankery" to describe the morass produced by the legislation.

Calling the Dodd-Frank Act "too big not to fail," it offered as an example the proposed Volcker Rule. At eleven pages in the final law, the federal agencies charged with the rulemaking offered a 298-page proposal containing 383 questions and, by law firm Davis Polk’s count, 1,420 sub-questions.

The Economist quoted an unnamed banker – who favors the Volcker Rule – as saying the release is "unintelligible any way you read it."

And that was just one of a dozen examples offered detailing conflicts, unintended consequences, and heavy-handed results spawned by the multi-headed "Hydra" that is Dodd-Frank.

Financial regulatory reform certainly has its share of critics. The article, however, apparently stirred up some strong feelings.

In a subsequent issue of The Economist, every letter to the editor was a denouncement of the article – by key players in financial regulatory reform. Senator Chris Dodd (R-CT), Representative Barney Frank (D-MA), former FDIC chairman Sheila Bair, and assistant secretary of the Treasury Neal Wolin each offered pointers on how the magazine got it wrong, from bad facts to bad graphics to quoting out of context. Words were not minced.

Perhaps now along with Dodd-Frankery, we can add another term to our lexicon: "Economisted."