Dodd-Frank and other costly regulations are punishing businesses, keeping them from expanding and creating more jobs, hedge fund investor Ken Langone told CNBC Tuesday.
Regulation should be passed to protect people, said the chairman of Invemed Associates, but "we’re at a point in time when...we’re creating regulations to punish people. When I’m getting punished for doing something, guess what happens? I’m gonna do nothing."
In a freewheeling discussion reuniting Langone with the other founders of Home Depot, Bernie Marcus, chairman of the Marcus Foundation, agreed the cost of complying with regulation, particularly Dodd-Frank, is "enormous."
"Dodd-Frank is a really serious problem for small business people," he said. "Dodd-Frank is really causing the demise of the community banks and community banks for small business people are critical because this is where they get the cash flow from."
Small business people have told him that "they're doing OK, they're making money and they're not expanding and not planning to" because "nobody knows how to deal with the things coming down the pike."
Arthur Blank, now the owner of the National Football League's Atlanta Falcons, said people - consumers as well as the government - have to be held accountable for their actions, particularly in their personal finances.
"People haven’t been living within their budgets. Obviously the government hasn’t been living within its budget," Blank said. "People aren’t being held accountable the way they used to be," which is one reason why Dodd-Frank and other measures were enacted.
The "problems we have in America [are] fixable," Langone countered. "The politicians won’t let us fix them. We desperately need term limits in America. You need common sense and [politicians] lose common sense, and a touch of reality."
Marcus agreed with Langone on term limits while Blank, who said he is socially liberal and fiscally conservative, agreed that politicians need to get out of Washington more and talk to people.
"When we were running the company we spent 40 to 50 percent of our time in the stores, talking to customers, talking to [sales] associates, walking the floors," Blank said of the Home Depot days.
"We did this not to tell the associates and the customers that we cared about them but to maintain a sense of reality, of what was really going on in our business as opposed to just reading reports and getting information from other people," he said.