Whenever you hear the names Dodd & Frank, economic disaster is the result

[Baruch Menachem]

Dodd and Frank prevented the reforms needed in Fannie and Freddie for years.


Here is a disaster that is new, built on 'good intentions' Still a heartbreak

From the Economist.

In the past year Goma has suffered a miserable decline. Hundreds of mines in the surrounding countryside have cut output by as much as 95%. At the Humule coltan mine a few gumbooted miners scramble up a red-earth ravine where last year there were thousands. Most stopped coming because they could no longer find buyers for their nuggets of coltan, a metal used in electronic gadgets. They blame what they call “the American law”.

An obscure provision in the 2010 Dodd-Frank banking act forces companies listed in America to disclose the exact source of metals procured from Congo. The intention behind the law was good. Congolese militias and rogue army units, whose members rape and murder with abandon, finance themselves through mining and extortion from miners. The law tries to shame big buyers, such as Apple and Motorola, who use Congolese coltan, into dealing only with bona fide suppliers. But the effect has been to frighten them away from Congo altogether.

So the local economy has dropped off a cliff. Some unemployed miners had been expected to join militias, though evidence that they have done so is scant. Still, militia leaders and corrupt army commanders targeted by the Dodd-Frank law are doing rather well. Unlike legitimate dealers, they run smuggling networks and take metals across borders to sell them. Officials in Burundi, Kenya, Rwanda and Uganda are complicit or turn a blind eye.