A teacher of mine used to teach a simple, common sense lesson: it's cheaper to build a fence at the top of the cliff than pay for an ambulance at the bottom.
That lesson holds true for how the Democrats should approach the financial accountability legislation being considered by Congress.
In short, stay strong. The crackdown on Wall Street's abuses is the right thing to do. It will hold Wall Street bankers accountable today so that middle class families -- and all Americans -- never have to face this kind of economic collapse ever again.
For years, Wall Street operated with reckless abandon, packaging and selling mortgages that fueled the foreclosure epidemic and caused the nation's economic crisis. Washington insiders and Wall Street lobbyists wrote rules to remove the traditional wall between risky investment trading and commercial deposit banking. That led to a "one-stop shop" of risky financial products that imperiled the global economy.
Citigroup just announced that the big paydays of the past had returned -- with their bank raking in $4.4 billion in profits during the first quarter of the year.
Now, people may not understand how credit derivatives work or the structure of sub-prime schemes. But they do understand that their pensions have vanished and that their families are losing their homes. And they most certainly understand that they've lost their jobs.
That's why it's not enough to complain. There is no shortage of that -- especially in Washington. What Ohioans deserve are leaders who will put forward solutions to make our economy work for us again. Democrats have an opportunity to lead -- and they should.
That's why I'm proud to say that I'm the only candidate in the race for the U.S. Senate here in Ohio who strongly supports permanent, independent steps to boost accountability and transparency on Wall Street. Common sense steps such as:
- Creating a strong consumer financial protection agency. Unlike temporary "task forces," this watchdog agency would have the power to investigate outrageous overdraft fees charged by banks without the consent of its customers, soaring credit card interest rates and predatory mortgages. It would go a long way to restoring confidence in our economic system and rebuilding our economy.
- Reinstituting policies that prevent banks from becoming "too big to fail." The one-stop shops of the past, in which common banking transactions like deposits and loans are mixed with risky credit schemes, got us into this economic crisis. Splitting these two roles will restore basic safeguards and prevent this kind of economic disaster from ever happening again; and
- Ending excessive bonuses at bailed out banks that have not paid back the bailout funds. We need to send a clear sign to struggling middle class Americans that the golden parachutes of the past are over. Executives who signed off on -- and even encouraged risky investment schemes -- shouldn't get a payday while Americans lose their shirts.
Of course, Republicans have gone back to their scripted talking points, waxing poetic on how they want Democrats to slow down, how boosting accountability would have cataclysmic consequences, and how the end is near.
Not that these talking points should be a surprise to anyone. We heard the same points about health care reform. And for years, Washington insiders like our Republican opponent here in Ohio, Congressman Rob Portman, have lined their pockets with contributions from Wall Street's army of lobbyists while turning a blind eye to this looming financial disaster.
Democrats shouldn't be fooled; Republicans are more interested in scoring petty political points than actually standing up and protecting middle class families from economic disaster.
Americans have two choices for dealing with the current crisis: we can choose the past and go back to the same people and the same policies that got us into this economic crisis. This choice will inevitably lead us right over the economic cliff again, and leave middle class families bailing out bankers. Or we can choose to hold Wall Street accountable at the top of the cliff and lay the foundation to create good-paying jobs in Ohio and across America.
It's time for action. Democrats should build a strong financial fence today and stand up for middle class families for years to come.
Lee Fisher is Ohio's Lieutenant Governor and is running for the U.S. Senate in 2010. Please visit FisherForOhio.com to learn more about his campaign.