Updated

This election year, 2016, is unconventional, to say the least. However, not unlike previous elections, the economy and jobs are top-of-mind for voters.

Immigration and trade have largely – and incorrectly – taken the blame for America’s economic woes. What’s been ignored is overregulation – specifically, financial regulation.

Talking about red tape may not elicit the same emotional response as these other heated issues, but if politicians were serious about addressing the real source our economic malaise, they would look first and foremost to Dodd-Frank – the sweeping overhaul of financial regulation passed in 2010.

Our core problem is a lack of new businesses.

The politicians who supported and now defend Dodd-Frank would have Americans believe that the law is a safeguard against harmful financial risk-taking. Even if that was that their intent, the result has been a lop-sided, top-heavy recovery.

Americans are hungry for more good jobs. In any normal economic conditions, the main source of these jobs would be new businesses. However, research by AEI’s Peter Wallison (and board member of MSGP, my organization) demonstrates that Dodd-Frank is the single biggest reason why enough new businesses aren’t being started. Our historically weak, oddly geographically-constrained recovery is because small-business loans have never recovered from the recession.

Simply put, the lawyers’ bonanza that is Dodd-Frank has allowed big financing for big companies recover while holding back the small loans needed by new businesses.

Hillary Clinton has, admirably, connected excess regulation on small banks to the troubles of small business. But we need to hear exactly how she will “right-size” regulation.

Donald Trump has, admirably, pledged to repeal Dodd-Frank. But we need to hear what he’ll replace it with.

Everyone agrees that the pre-crisis financial system needed major surgery, but Dodd-Frank just made D.C. regulators, lawyers, and lobbyists more powerful. You can support Dodd-Frank or Main Street, but not both.

We need to hear how to get American would-be entrepreneurs the credit they need to start new businesses.

Addressing the lack of new business starts isn’t just about job growth. The other problem, as the Obama Administration has noted, is that without new entrants, too many industries don’t face new competition and thus possess excess market power in both hiring and pricing – and less incentive to put the customer first.

We win so many ways with more new business creation.

Americans benefit from the growth of new businesses in three ways. The first and most obvious benefit is that an unemployed person can start working. The second benefit is that employers have to compete harder for employees. This dynamic results in workers getting better wages, benefits, etc. Lastly, new businesses give consumers more choices, forcing existing businesses to innovate to stay profitable.

The stakes may only get higher if we have a downturn.

Remember, the current ecomomic anxiety is happening during a seven-year recovery. The good news is that the recovery is longer than average (the average since 1854 is 39 months). The bad news: We’re due for a recession. The worst news? We have precious few tools to boost the economy, especially with Federal Reserve still keeping interest rates near zero.

One pro-growth tool we can use now is regulatory reform. Reducing the onerous regulatory burden on small banks will lead to more new businesses and thus more jobs. The key thing here is that job growth most benefits those looking for work. This group is disproportionately recent immigrants, young people, mothers returning to work, and ethnic minorities. It is appalling to see politicians profess support for immigrants yet support the very policies that create resentment of newcomers. Want to help the Dreamers, the world’s poor, tired, huddled masses? Then reform Dodd-Frank. People want to work, to start businesses, to fill up empty store fronts on beaten-down Main Streets.

To Congress, President Obama, and the next President, I ask that you be part of the solution, not the problem. It’s a better way to live, and the right thing to do. Reform Dodd-Frank such that Main Street workers, banks and aspiring businesspeople aren’t paying the price for the sins of others.

I’m aware that financial regulation isn’t a sexy topic. When I talk to people outside D.C. about Dodd-Frank, they often guess that it’s a country music duo, or perhaps a law firm. It’s not sexy. It just matters to everyone trying to pay the bills and put dinner on the table tonight.