05/14/2010 04:47 pm ET | Updated May 25, 2011

It's Time to Hold Wall Street Accountable

Almost two years have passed since the taxpayers of America gave the titans of Wall Street more than $700 billion to keep the world's economic system from plunging into another world-wide Great Depression. Yet, the big banks, the Wall Street investment houses, the hedge funds and the CEOs of America's top companies still have not taken the steps needed to tighten up the shoddy practices that led our economy right to the edge of the cliff.

Even worse, they are fighting common sense reforms being debated in the Senate that would end the insider games that put millions of Americans out of work, stole billions from our retirement plans, and left states and cities with huge amounts of unsustainable debt. They are spending millions of dollars on lobbying to prevent the Senate from enacting tough new rules to prevent another financial crisis and give investors and the public the kind of protection that has been missing for far too long in our economy.

Four years after the stock market crash of 1929, President Roosevelt and New Deal Democrats enacted important reforms to held Wall Street accountable. Those rules kept the financial system operating on an even keel for more than 50 years. But, beginning with the election of Ronald Reagan in 1980, the New Deal regulations were undermined, giving Wall Street unfettered freedom to turn our financial markets into a casino, where the homes and retirement security of middle class Americans became little more than chips to the traders and the CEOs.

While most Americans think of stocks and bonds as the investment instruments we purchase, Wall Street was busy creating new, risky and unregulated products like "collateralized debt obligations," and "credit default swaps." The lack of oversight and accountability in the trading of these new products led to the meltdown of 2008 and economic catastrophe. That is a major reason why we need new rules to regulate transactions of new and complex financial instruments.

All across the country, cities and towns, school districts and even sewer systems have been hit hard by these Wall Street products. Sellers misrepresented these instruments as a way to help reduce the financing costs for public projects, but hidden features were included that ultimately are costing taxpayers billions, if not trillions, in added costs. In Alabama, for instance, Jefferson County sought Wall Street financing for a $250 million sewer system. After purchasing a wide variety of "tools" from Morgan, Goldman Sachs and Lehman Brothers, the taxpayers of Jefferson County now owe more than $1 billion, just in interest and fees on their debt.

In every region of the country, Wall Street has sold derivatives that essentially bet on municipalities defaulting on their loans. Using "municipal swaps," the banks give investors a way to sell short -- or bet against -- countless cities, towns and states, including California, Michigan and New York. This is nothing short of a potential time-bomb for taxpayers, giving investors an opportunity to make millions while taxpayers might be forced to pay billions to paying off Wall Street gambling bets.

The financial reform bill being debated in the Senate would regulate the derivatives market and provide much-needed transparency to these risky deals. The Senate needs to resist the efforts of Wall Street and their Republican allies and pass this legislation immediately. The debate in the Senate has gone on long enough. It is time to get the job done and ensure that American people are not left paying billions of dollars because of the unregulated greed of Wall Street and the big banks. It's time for Congress to send a clear message that they will side with Main Street and not cave in to the power and money of Wall Street. It is time to close the casino.

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