Beyond resistance: Holding Wall Street accountable
It is the 11th day of my email series, “Beyond Resistance: The things we should do to make us safer, healthier, and more economically secure.” Today’s topic: holding Wall Street accountable.
The 2008 crisis was among the greatest challenges that our country ever faced. Eight million jobs were lost. Housing values crashed, leaving millions of families faced with foreclosure, bankruptcy, and homelessness. Billions of dollars of retiree savings were wiped out, while massive taxpayer-financed bailouts were implemented. The crisis also ushered in a financial anxiety that threatened the entire world’s financial system. The resulting panic hindered growth and negatively impacted the global economy for over six years.
To make sure that a crisis like this doesn’t happen again, we should regulate, prosecute, and defend.
- We need to reinstate Glass-Steagall, the Depression-era bank regulation that helped promote stability in the financial industry. Not only would it remove unnecessary complexity from the financial markets, but it would also limit some types of risky bets that contributed to the Great Recession.
- The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was created to rein in Wall Street, end taxpayer bailouts of big banks, and protect consumers. Among the most important provisions of this legislation is the Consumer Financial Protection Bureau (CFPB). Just as American consumers are protected from products that can cause serious physical harm, they should also be protected from products that can cause financial ruin.
- Extending homeowners the same financial status in bankruptcy as speculators is another simple protection we should put in place. People who speculate in multiple real estate properties can use bankruptcy laws to alter their loan balances and interest rates. If homeowners were treated similarly, we could have kept hundreds of thousands of people in their homes and forced banks to be more responsible lenders.
- We should prosecute wrongdoers. Sending people to jail will send a message. All of the people in U.S. prisons collectively have not stolen as much with guns as the American public, pension funds, and businesses lost in the near meltdown of the economy. Every time someone illegally profits from a financial transaction, someone else loses. Crooks, whatever the color of their collars, should be held accountable.
- Finally, we must defend the progress we made during the Obama administration, and block the concerted effort by some in the finance industry to hijack consumer protections and rebuild them in their favor. Regulation like Dodd-Frank and regulatory agencies like the CFPB protect people from irresponsible business practices and ensures that they do not pay the price for others’ illegal actions.
I welcome your thoughts, ideas, and opinions. You can connect with me here.
Member of Congress