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NationofChange / Op-Ed
Published: Sunday 9 October 2011
“The truth is that millions of Americans lost their jobs, their homes and their life savings because of the greed, recklessness and illegal behavior of Wall Street.”
Rein in Wall Street And Rescue The Middle Class
The protest movement called Occupy Wall Street has struck a nerve. The demonstrators' goals may be vague but their grievances are very real. If our country is to break out of this horrendous recession and create the millions of jobs we desperately need, if we are going to create a financially-stable future, we must take a hard look at Wall Street and demand fundamental reforms. I hope the protesters provide the spark that ignites that process.
The truth is that millions of Americans lost their jobs, their homes and their life savings because of the greed, recklessness and illegal behavior of Wall Street. Even Federal Reserve Chairman Ben Bernanke agreed when I questioned him this week at a joint economic committee hearing that that there was "excessive risk-taking" by Wall Street. Bernanke also said the protesters "with some justification" hold the financial sector responsible for "getting us into this mess", and added, "I can't blame them."
The demonstrators and millions of sympathetic Americans understand that odds are stacked in Wall Street's favor because of the extraordinary economic and political clout of the big banks. Believe it or not, the country's six largest financial institutions (Bank of America, CitiGroup, JP Morgan Chase, Wells Fargo, Morgan Stanley and Goldman Sachs) now have amassed assets equal to more than 60% of our gross domestic product. The four largest banks issue two-thirds of all credit cards, half of all mortgages, and hold nearly 40% of all bank deposits. Incredibly, after we bailed out the behemoth banks that were "too big to fail", three out of the four are now even bigger than they were before the financial crisis.
Not only do these financial institutions have enormous economic clout, their wealth makes them an extremely potent political force. From 1998 through 2008, in order to achieve their goal of repealing Glass-Steagall and other financial regulations, they spent more than $5bn on lobbying and campaign contributions. They also spent hundreds of millions to water down last year's Dodd-Frank reform bill. After the law was passed, hundreds of millions more were spent to repeal provisions and weaken regulations. They never give up.
Where do we go from here? How do we convert the protesters' enthusiasm into concrete results?
For starters, we should break up the giant financial institutions. Left to their own selfish devices, Wall Street bankers will continue to gamble with other people's money. Sooner or later, when their bets go wrong, they will come back to Congress asking to be bailed out again. Why not nip that in the bud? There also is a sound economic argument against too few owning far too much. The idea that six giant financial institutions can exert such enormous control over the economy should frighten anyone who believes in a competitive free-market system. Good Republican presidents like William Howard Taft and Teddy Roosevelt broke up Standard Oil, the railroad trusts and other huge monopolies a century ago.
Now is the time for us to end the financial oligarchy that has been so destructive to our economy. If a bank is too big to fail, it is too big to exist.
Wall Street reform also must address the powerful and secretive Federal Reserve. A Government Accountability Office audit that I requested found that the central bank provided $16tn in revolving, low-interest loans to every major financial institution in this country, multinational corporations and some of the wealthiest people in the world. The Fed even helped bail out other central banks around the world. When Wall Street was on the verge of collapse, the Fed acted boldly. Today, with the middle class collapsing, the Fed must act with equal vigor.
Real unemployment is more than 16%. Median family income has declined by $3,600 over the last decade. A record 46 million Americans live in poverty. The gap between the very rich and everyone else, the widest of any major country, is growing wider.
Under emergency provisions already in law, the Fed has the authority to provide low-interest loans to small businesses that are starving for capital so that they can create the millions of jobs our economy needs. It should do so. The Fed also has authority to make credit card issuers stop bilking consumers with sky-high fees and interest rates of 30% or more. Especially in a recession, working people use credit cards to stretch their paychecks for basic needs. Usury is already regarded as a sin in the eyes of every major religion. It should be a crime. The Fed has the authority to limit interest rates and fees. It should do so.
The Occupy Wall Street demonstrators are shining a light on one of the most serious problems facing the United States: the greed, recklessness and power of Wall Street. Now is the time for the president and Congress to follow that light - and act. The future of our economy is at stake.
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By Kiley Kroh
20 comments on "Rein in Wall Street And Rescue The Middle Class"
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October 31, 2011 1:17pm
Would that Sen. Sanders became the Eugene McCarthy of 2012!
October 10, 2011 4:11pm
What single thing is it that the 1% "Rich and Powerful" in the United states of Americxa fear the most out of the 99%?????
That the 99% will organize and join together!!!!! There is nothing else that makes them lay awake at night and worry about what "We the People" will do next.
Will we vote the stooges out of Elected Office that they the "Rich and Powerful" paid to put them into elected Office?
Will we make our Demands known and Demands get done by our Elected Officials?
Will we Demand a Constitutional Amendement to prohibit the "Rich and Powerful" buying elections for those they support? All the Amendment needs to do is clarify that an Individual is a Living Breathing Member of the Homo-Sapien Species. Only Congress should have the ability and authority to place limits on who can make Contributions to a Political Parety and to a Political Candidate. Only Congress should have the ability and authority to place limits on Who, What, Where, When and How a Contribution can be made. I reccomend that all contributions should be made directly to the FEC with a stipulation as to what Political Party or to what Political Candidate it is to be given to. Then the FEC should transfer the Contribution to the Political Party or the Individual Political Candidate anonymously, thereby eliminating the obligation a candidate might otherwise feel if they knew who it was that was support them Financially.
We need to Demand that Congress spend the same amount of money that they spent on bailing out the Financial Institutions to create jobs for the American Citizens here in the United States of America. Seeing as "We the People" bailed out the Financial Institutions it is now time that they and the "Rich and Powerful" bailed out the American People by paying for the Creation of the Jobs.
The the Income Tax Code be Repealled and replaced. Eliminate ALL of the Exceptions, Exemptions, and Deductions. That every source of Income would be subject to the same Tax Code no matter what it was from or where it was earned.
Those who earn less than $10,000.00 would pay 2.5% Tax Rate.
Those who earn $10,000.01 to $20,000.00 would pay 5% Tax Rate.
Those who earn $20,000.01 to $30,000.00 would pay 7.5% Tax Rate.
Those who earn $30,000.01 to $40,000.00 would pay 10% Tax Rate.
Those who earn $40,000.01 to $50,000.00 would pay 12.5% Tax Rate.
Those who earn $50,000.01 to $75,000.00 would pay 15% Tax Rate.
Those who earn $75,000.01 to $100,000.00 would pay 20% Tax Rate.
Those who earn $100,000.01 to $$200,000.00 would pay 25% Tax Rate.
Those who earn $200,000.01 to $450,000.00 would pay 30% Tax Rate.
Those who earn over $450,000.01 would pay 35% Tax Rate.
Corporate Tax Rate would be 10%. With NO Exceptions, Exemptions or Deductions. This would ensure that if a Corporations, Company, Institution or for Profit Organization earned money they would PAY TAXES.
We want a Balanced Budget Constitutional Amendment to the Constitution of the United States of America. Congress with a 2/3 majority vote could allow a deficit during a Declared War or a Declared national Emergency.
We want a set of Ethic Rules and Regulations to be written to cover every individual who is employed by the United States of America in any manner, is elected to office, or is appointed to a Governmental Position. There must be Mandatory Sentencing to Federal Prison for the violation of said Rules or Regulations. The responsibility to enforce these Rules and Regulations shall fall to the Justice Department.
We want all Limitations or Caps removed from the Taxable Income for Social Security. We want Social Security Benefits to be "Means Tested."
We would like to have an open discussion to see if there should be Caps and Ratios placed upon the Salaries and Benefits of Executives in relations to the other employees within the Organization.
We would like to see a change on the Rights of Stockholders. When voteing for Directors or Compensation packages for the Organization we would like to see that EACH owner of Stock got ONE vote and not get a VOTE for Each share they own.
We demand that Congress open and examine each and every Trade agreement that exists and determine if we are being treated Fairly and Equally by our Trade Partners. If not we need to get out of all bad Trade Agreements and put TARRIFFS on all goods that we are being taken advantage on.
We want Congress to write a law that Prohibits any Individual, Corporation, Company, Organization, Instution from moving work from the United States of America to another country and then shipping the goods produced, in another country, back into the United strates of America.
October 10, 2011 6:16pm
It would be an excellent beginning towards solving the problems. If only the worst nightmare of the "Rich and Powerful" could come true!
Before the 99% gets organized and join together they, as individuals, need to see through the party ideology separating them. That's very hard.
Then, perhaps they need to realize that voting the stooges out is only half the answer. Too many just like them are lined up to be voted in.
There is something wrong with our much cherished democracy when we have to wait patiently to vote them - next time- out of office: The crooks, the authoritarians, the demagogues and even some imbeciles, the ones we voted for in the first place, last time.
That needs to be fixed, our democracy.
Again, Mr Sanders is on point. I ask again - WHAT THE HELL IS OBAMA DOING JUST "COMMENTING" ON THE WALL STREET OCCUPATION WHEN HE COULD BE MAKING THE TREASURY OFFER THOSE LOW INTEREST LOANS TO CREDIT-STARVED SMALL BUSINESS? Biz as usual with our Prez-talk a good game while continuing to allow Wall Street & the biggest banks to plunder the treasury and continue to kill middle Americans with obscene interest and bank fees. WHY WON'T OBAMA DO SOMETHING EFFECTIVE? Call ALL those zero-interest loans and create a fund for zero-interest loans to the people B of A is still throwing out of their homes. What a freaking loser- Bernie for prez!!
October 09, 2011 5:56pm
I wonder how many of you can see that this is not a problem peculiar to America but is something that is a feature common to the global economy. Those who do realize this will also realize that it cannot be fixed at national level and that it has to be engaged at global level.
Those who realize this and begin to act on their realization are the HUMANS…the rest are Americans and Indians and Chinese and Europeans and Russians and Australians….National and Regional creatures on their way out of the evolutionary game…
October 14, 2011 1:34pm
Reply to Nirmalan Dhas
Yes it is an nternational problem. And the same actors who are behind it in this country, are behind it world wide; the trans-national corporations, the same corporations that hollowed out our economy are warring on the economies of the rest of the planet. Resistance has to start somewhere. Why not here? Why not now? Why not us?
October 09, 2011 5:20pm
As promised: Idea number 1. The housing industry is the strongest economic engine of the several available to us. The second strongest is (dare I say this) the defense industry. As of now, the government is doing about all it can to keep the defense industries up and running. For the time being, let's leave that one alone. Housing, on the other hand, is stuck in the mud. Think of it this way; The building of houses requires more or less 50 different ingredients. Trades people, building materials, business services, fixtures, appliances, decor items and land scaping products and labor. Those are the direct inputs. There is also the ripple effect caused when new homeowners buy new furnishings, additional yard scapes, and other niceties which make a house a home. Since most new home buyers are "move up" buyers, they create a series of sales down the line which has a similar ripple effect. I think you get the picture. When the housing industry is healthy, so is the economy. So how do we get there from here? I won't be easy or speedy, but it can be done.
We need to do 3 things. First, all those underwater homes need to be put on dry land. As much as possible the existing loans need to be re-written to reflect the current value of the property. The new loan should not exceed 90% loan-to-value ratio. The lenders will not be able to withstand the $billions in losses so some method will need to be found to keep them solvent. That would appear to be a role for the Federal Reserve. Second, the millions of foreclosed properties now on the market or being held off market til later must be cleared out. Until the inventory of foreclosed properties begins to approach normal levels the home builders will sit on the sidelines. Third, attractive and straight forward home financing must be made available to purchasers regardless of the mortgage banking industry objections. Only the federal government has the power to accomplish the second and third items so it will be up to we the people to push them to do what needs to done. That's my number one idea. There are more for later.
October 09, 2011 4:56pm
While all of you are correct, as is Sen.Sanders, it seems that it is about time to start making some actual demands. What is it that we, the99%, want to happen? What actions should be taken? How do we set about solving the problem? Better yet, what is the real problem? Doctors know to treat the decease, not the symptoms. It is time to start treating the true source of the troubles we face. Having spent the bulk of my 75 years in and around the housing industry as well as investing for retirement in the stock markets, I think I have some answers. I'm sure there are many others out there with expertise in the key areas that can offer valuable insight to solving the problems. I'll be happy to lay out my ideas and hope that others with knowledge and experience will do so as well.
October 09, 2011 12:41pm
Keeping it honest: Remember the Movie: “Wall Street?” Isn’t Greed supposed to be NOT good? So many news articles stating that American protesters have “no clear “agenda? It seems crystal clear to the middle class America that they are frustrated by the lack of concern that exists for the people in this country who need jobs and hope to support themselves and families. Millions of unemployed people looking for work in this country are being ignored and slowly erased by mega-corporations including Big Oil, Banks, Computer Co., Drug Insurance Companies, whose only concern is for their obscene profits far exceed anyone’s understanding! The beauty and treasured tradition of America allows people the freedom to unite and speak out to draw attention to these huge social injustices. It’s about time that Americans did and said, “we are mad as hell and we are not going take it any longer!” Are you listening Mr. Cantor, you and your war on the Middle Class of America? For the record, “Greed is Not good”; it’s ugly, selfish, obscene and destructive for our society. After all, We are a still a democracy, not aristocracy, nor a Banana Republic! Just look around this great county! " It's no surprise that the Romney campaign and his republicans in the Congress are raising money from Wall Street by saying they want to repeal consumer protections sand allow Wall Street to write its own rules, AND the recipients of dollar tax payer bailout with no conditions and used it for non-performance bonuses!
October 09, 2011 12:38pm
Senator Sanders as usual, perfect on point, succent, and elequently written.
October 09, 2011 12:26pm
Verbatim, I'm not sure why you think nothing is happening or that "The Middle Class is so terribly slow to provide impetus".
Things ARE happening - who do you think is occupying Wall Street? Rich? Poor? Middle Class? Someone else?
And have you stopped to consider how exhausted we are? The poor and the middle class - and there isn't much difference, these days - are overworked and underpaid and tired.
I don't mean just physically - I mean soul-weary - the kind of mental, physical, and emotional exhaustion that sets in when you feel "all used up". We've been lied to, promised change, given hope, and disppointed again and again.
If you are fortunate enough to be employed you are likely working two or three jobs and still aren't able to make ends meet. If you are unemployed you are focused on getting a job - there is no energy for anything else.
If you have no money you cannot get to New York for the main action and if you have no car or gas or mass transportation in your area you may not be able to get to one of the other "Occupy" events - the nearest to me is nearly fifty miles from here - I cannot walk that far.
In spite of all of that, there are STILL people organizing EVERYWHERE - the mainstream media ignores us for now, but even my little efforts (calling, talking, spreading the word, passing petitions, et cetera) will not remain unnoticed forever.
There ARE protests happening.
There ARE petitions being passed.
There ARE groups organizing.
Our media ignores us, our politicians ignore us.
We are civilized people; we do not want to blow things up (whatever some hotheads may say). We are being arrested by the hundreds - and pepper-sprayed, and thrown to the ground and into walls - and the penalties are escalating for some of the arrested - and the media is carefully quiet.
What more would you like to see beyond protests, petitions, and speaking to our so-called "leaders"?
October 10, 2011 11:06am
Well, I got through to one of you, the middle class, at least. I said the middle class has been slow to provide impetus -- to a movement which is vulnerable to unfair attacks from the spin machine of the very rich they are protesting against.
One thing the writers of the middle class need to do is to denounce the politicians and the pundits, beholden to the rich and corrupt, for the derogatory statements made against the Occupy Wall Street. Those statements show the true contempt these politicians have for the average people, the middle class that actually voted them into office.
Another thing the middle class could do is to openly endorse the movement and provide it with inspiration : Material support and above all specific purpose.
Finally, let me assure you that I did not intend to be critical of what is being done, only stress the point that it's time to step up to the plate. And most definitely I had NOT suggested any unlawful acts, just the effective use of our rights.
So that "Our media and our politicians (can't anymore) ignore us."
October 09, 2011 12:17pm
Maybe we should take a page from the protestors in France, Greece and other countries and just get a bit more ........ emphatic.
October 09, 2011 12:09pm
It's not the Middle Class that is slow to respond, it is the Right Wingers and Repubs who need to look at what they are doing to us and to our country. I am 76 yrs. old and have to work to pay my expenses and will continue to protest in my way, especially at the ballot box. I am definitely moving my money out of Bank of America and will find a better places to place my trust, values and confidence
October 09, 2011 12:05pm
The Fed should.There were lots of things listed that the Fed should do - and it should. Of course, if everything was as it should be.......
October 09, 2011 12:04pm
Amen to that! Savage beasts they are.
October 09, 2011 11:56am
It is a disgrace that The Middle Class is so terribly slow to provide impetus to this movement of Occupy Wall Street. The middle class seems to need first to be rescued from itself, at least its lack of purpose and the will to demand its rights.
How ironic that the derogatory so-called rabble-rouser, stand up for the middle class and are even asked to inspire it. It should be the other way around.