No one should be very surprised to learn that Wall Street has been working very hard in Congress to protect its turf over the past several years. Its efforts have intensified during the past year. Hopefully enough members of Congress will resist the pressure from Wall Street that is designed solely to protect the big banks. Wall Street has been pounding Washington, fighting all attempts to rein in the too-big-to-fail banks. Lobby groups and front groups for Wall Street are hard at work trying to undo all of the progress that has been made over the years to protect investors and consumers. Unfortunately, they have been very successful in their efforts. For example, Wall Street got Congress to:
• Repeal Glass-Steagall;
• Prohibit the regulation of derivatives (Commodities Futures Modernization Act.);
• Defeat hard caps on bank assets (Brown-Kaufman);
• Weaken the Volcker Rule; and
• Keep the revolving door well oiled.
There should be little doubt that Main Street has to be defended against the ravages of Wall Street. But it’s important to understand that the fight is against the richest, most powerful industry in the history of the world. The rules and regulations that were enacted after the Great Depression allowed regulators to prevent that devastating event from happening again. The regulatory measures worked for 70 years. But the financial industry was able to take use its economic might to buy political power in their efforts to deregulate the financial industry. When Glass-Steagall was repealed in 2000, with almost no public awareness, a crescendo was reached. After about 15 to 20 years, Wall Street finally got what it wanted. This was a dagger in the heart of legitimate and badly-needed efforts to control Wall Street.
The second-worst event was when Congress passed the Commodities Futures Modernization Act. This Act, which prohibited the regulation of derivatives, was one of the worst things to have happened to a world-class financial system after 70 years of regulation. It took seven years of total deregulation to almost destroy our nation’s economy. The financial collapse crashed the global financial system and almost brought about a second Great Depression in this country.
President Obama and Congress must work together to control the financial industry. It will take a strong political will for our leaders to take on Wall Street. Never doubt that Wall Street will fight back and will be a very tough opponent. The question is, can the government take on the big-money interests and onslaught of Wall Street and win? For this to happen:
• The Securities and Exchange Commission, and especially its Division of Enforcement, and the Department of Justice must do their jobs.
• We need a sounder, and safer banking system that doesn’t require that taxpayers bail out Wall Street. The banks can still make good money and prosper under such a system.
• Rules and laws must be enacted that must be adhered to by Wall Street. We can’t continue to give super-rich Wall Streeters a pass when it comes to them breaking the law, then paying a fine and continuing to operate.
If we let another huge financial collapse happen, I don’t believe we can bounce back like we have done this time. Poor regulations, and in some cases no regulation, almost destroyed our nation’s economy. We can’t let that sort of thing happen again. We experienced the second worst financial collapse in U.S. history since 1929, which is responsible for the worst economy since the Great Depression, and our nation survived. Hopefully, our political leaders learned their lesson from what happened, and more importantly, understand why it happened. When there is no accountability, and no penalty against the real power on Wall Street and the financial industry, our country suffers as a result. I am convinced that the American people want Wall Street controlled and properly regulated. The politicians had best listen!
Source: Corporate Crime Reporter
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