Wall Street: the Real Roadblock to Economic Recovery

President Obama’s bold leadership and the swift action by congressional leaders last spring likely staved off a global economic depression. Because of that work, our economy is on the path to growth and hundreds of thousands of jobs have been saved.

But we are not out of the woods yet. And when I think about what still needs to be done to build a true economic recovery, I think about workers such as Maria Guerra.

Maria is a janitor I met last week in Chicago. She worked hard to buy her own home and before the crash she co-signed a mortgage to help her brother buy a home for his family. Since then, Maria’s brother was laid off and his unemployment benefits have run out. Now, he has to choose between paying his mortgage and scraping up enough money to put food on the table.

The bank refuses to help them and Maria’s own economic security is in danger; she’s worried about losing her own home.

The sad truth is that nobody is spared from the impact of this recession. Some of us may still have our jobs or our homes but, like Maria, we all have a family member or friend barely getting by.

Congress must act on legislation recently introduced to extend unemployment benefits an additional 14 weeks to help workers like Maria’s brother. But it’s the architects of our current economic crisis-big banks and Wall Street-which continue to be the biggest roadblock to our recovery.

Big banks and Wall Street begged for trillions in taxpayer bailouts and backstops when they were on the verge of collapse. Now that they’re back on their feet, they are back to paying out billions in bonuses and clinging to the same failed policies that created the crisis in the first place.

Have the banks done anything to help families facing foreclosure? Have they increased lending to small businesses to create jobs? Have they helped states and cities close their giant budget shortfalls?

Not a chance.

That’s why Maria and I -- and more than 5,000 other Americans from 20 states -- converged on the American Bankers Association convention in Chicago. It was the largest mobilization since the economic crisis began to demand banks stop fighting reforms that would help protect our families from future crises. And it was the beginning of a national movement to hold banks and Wall Street accountable for their reckless behavior.

Big banks and Wall Street have spent decades rigging the system so that no matter what they win and workers lose and we must act now to break the hold they have over our economy.

To build long-term economic progress we must:

• Create a strong Consumer Financial Protection Agency to serve as a watchdog against predatory and reckless banking products;

• Crackdown on out of control executive pay that rewards short term risks over long term results;

• End too big to fail once and for all by separating commercial banking from investment banking and raising capital requirements back to levels that promote safe and sound banks;

• Empower shareholders to act on executive pay and break the excessive power of executive-controlled boards;

• Force banks to expand lending to small businesses and state and local governments to create jobs and save critical services;

• Demand banks stop foreclosures and help families keep their homes;

• Investigate, and if necessary prosecute, the big banks and Wall Street for crashing our economy.

Our current crisis presents us with an historic opportunity to fundamentally change the way we value work and wealth in our country. The window to act is closing quickly but I know we are up to the challenge.

This post originally appeared on New Deal 2.0.

 

 

Follow Anna Burger on Twitter: www.twitter.com/SEIU_AnnaBurger

Comments

[DuganS1]

So when someone loses their job, lenders should lower the principal on the mortgage so that the newly unemployment person can still afford the payments with their unemployment benefits? Second, it was probably very favorable loan terms which allowed the two to afford the house in the first place (low interest rates, little to no money down, etc). .... but banks are still the bad guys, right?

[guard]

"President Obama's bold leadership"?! Are you crazy?
They can say they have "saved" any number of jobs, since there is no possible way of checking the numbers.

[William50]

If you had noticed North Dakota, you will note that they have a bank that is not in trouble and helps the people of their home state. I suggest that the main way to gain control of the super banks, along with your ideas are to open in each state a bank run exactly like the one in North Dakota to compete with and against the too big to fail banks. I also suggest that each state bank be awarded one billion dollars to be paid back with no interest from the profits the banks make.

To defeat the banks I would also suggest that not one highly educated economic major from any high powered school be allowed to work in these banks. After all why put the cream of the failures to work when there are other honest people in this country.

middleamerican2010
Casey

[Mountainhawk]

Wall Street was the one that secularized liar loans,, ballon loans and option ARMs to look like grade A prime loans. They are also the ones that sold Credit Default Swaps and syntheric credit default swaps.
AIG sold Credit Default Swaps to Goldman Sachs that allowed them to make a profit if the Collaterized Debt Obligations that they sold went belly up. It would have made some kind of sense for the customer if the CDO and the CDS had been part of the same instrument, but as it was Goldman created shaky instruments and then bet against them.

But more to the point, Wall Street has been looting and greenmailing the manufacturing economy for years via leveraged buyouts and hostile takeovers. Look up the NYTimes peice on Simmons Mattress and then multiply by 1000. Every company that I worked for has been bought out at one point or another, two were essentially stripped until nothing was left.

[research]

The Banksters who caused the crash, extroted 27t$ ib loans and guarantees from the Taxpayuers.

The Banksters now control where that money goes.

Banksters hate main street.

Banksters love leveraged derivatives gamlinbg insured with CDS insurance, backed by tax payers, who wouldn't?

outlaw ALL derivatives and cds,

Force the Banksters to invest in Main Street.

[marinara]

In Ms. Burger's story: why is the bank to blame for the dude losing his job? Rather you need to show how our trillions sent to the banks have gotten little at all.