WATCH: Former Wells Fargo CEO rails against regulatory burdens
This stunts America’s growth
While America should be growing faster, the wrong mix of fiscal and monetary policies is smothering any room for potential growth, at least that is what Former Wells Fargo (WFC) Chairman and CEO Richard Kovacevich said.
The Bureau of Economic Analysis announced Friday that the economy contracted 0.7% in the first quarter of 2015, showing the truth behind how tough the start of the year was for the market.
Kovacevich argued that the economy should be growing at 3%, given the difficulty of this last recession.
"We always get a higher and faster recovery from a tough recession, and this is the slowest ever, and I think it's the policies that are coming out of Washington DC that are causing this," said Kovacevich.
As for why, Kovacevich explained that small business have not led the recovery as they have in the past.
The Dodd-Frank bank reforms in particular have "killed" small banks, Kovacevich said. Rather than investing in sales staff companies are allocating more money to technology and compliance costs. Wells Fargo alone employs about 10,000 people in compliance-related positions, he added.
"It's absurd that we are investing that kind of money on compliance that, in my opinion, is way over the top," he said.