Three years ago this summer, the flood tide of Wall Street recklessness began to overtop the weakened levees of restraint erected decades ago to protect our nation from financial disaster. By the fall of 2008, the economy was drowning in a sea of recession, with businesses shuttered and struggling, millions of people tossed out of their homes and their jobs, and the hopes and aspirations of millions more crushed beneath the weight of the financial floodwaters.
One year ago this week, to begin repairing the damage wrought by this avoidable catastrophe and to avert the next financial crisis, President Obama signed the Dodd-Frank financial reform law, enacting sweeping and needed new protections for the marketplace and consumers. The law contained the most significant changes in financial regulation since the 1930s, sensibly so given the magnitude of the calamity we faced.
From the beginning, it was obvious that overhauling the financial system would be no easy task given the power of Wall Street and their political allies and the increasing concentration of wealth and clout that has come to shape our economy and political system. But the fierceness of the resistance to change has been nothing short of breathtaking. Instead of putting all hands on deck to fix the breached levees in the nation's interest, opponents of reform have thrown every roadblock imaginable into the path of the repair crews charged with carrying out the new law.
From the moment the legislation was signed, the agents of its destruction went to work. Wall Street lobbying has intensified, with expenditures of nearly $52 million during the first quarter of this year exceeding the amount spent in the same period last year when the bill was being debated. Congressional Republicans introduced a raft of bills to repeal or eviscerate the newly minted reforms. They have blocked the appointment of key regulators when the nation most needs a steady and strong hand at the financial tiller, including pledging to reject any nominee to head the new Consumer Financial Protection Bureau unless the agency's authority is weakened.
They have slashed at the funding of the Securities and Exchange Commission (SEC) to cripple its ability to pursue financial wrongdoing and to enforce the law. They've done so even though the SEC is funded by fees and fines, not taxpayer dollars, and despite the fact that JP Morgan and Citigroup each spent four times as much on technology upgrades alone last year as the agency's total budget. And, they have repeatedly tried to cut the budget of the Commodities Future Trading Commission (CFTC) to hobble its ability to regulate the $300 trillion plus domestic over-the counter (OTC) derivatives market.
The result: a troubling uncertainty about the ultimate outcome of financial reform. While regulators plow ahead with limited resources against a fierce wall of resistance, much of what led to the financial meltdown remains unchanged. The OTC derivatives market remains without oversight or transparency. Rules on critical matters such as credit rating agencies, consumer protection, and proprietary trading remain to be enacted. All the while business as usual has resumed. Compensation at publicly traded Wall Street firms hit a record $135 billion in 2010, while profits have bounced back. As Sheila Bair, the former head of the FDIC recently noted, "I see a lot of amnesia setting in now."
While opponents of reform have zealously sought a reprieve for the nation's bankers, perhaps what is most striking is that there has been no reprieve for the American families crushed by the financial irresponsibility in which those bankers engaged. Wages as a share of national income have fallen to their lowest level since the Great Depression while the share going to corporate profits has rebounded to pre-crisis levels. From the second quarter of 2009 through the first quarter of this year, 92% of income growth went to corporate profits while none went to wages. The median pay of CEOs soared by 28 percent in 2010, while the average length of unemployment grew to nine months, the highest since record keeping began in 1948. And, young people across the country attending state universities have faced steep tuition hikes as state budgets collapsed in the wake of the meltdown -- with increases since 2007 of 132% in California, 95% in Arizona, and 54% in Florida.
That we would emerge from the financial crisis with bankers resplendent and fighting with their allies to keep the status quo -- while working families are struggling to survive -- should remind us of how far we have to go to right the financial and economic ship of state. And, it should be our clarion call on this anniversary to finish the work before us and to commit ourselves anew to building a financial system and economy that works for all Americans.
Phil Angelides served as Chairman of the Financial Crisis Inquiry Commission, which conducted the nation's official inquiry into the financial and economic crisis.
This blog has been updated since its original publication.
Follow Phil Angelides on Twitter: www.twitter.com/PhilAngelides
Rev. Seamus P. Finn, OMI: Restore Faith in the Markets
Michael Thornton: Millions of Long-Term Unemployed Are Living Desperately on the Edge
Dory Rand: Consumers and Lenders Both Better Off With Fully Functioning CFPB
Personal integrity and the interests of the nation and it's taxpayer citizens are non existent in our legislature. They've chosen sides and dedicated their souls to the "party", position, power, and money.
None are now able to "serve" anything more than some singular cause before moving on without penalty or pain.
Corporations and their defenders say, the reason they aren't creating jobs in America is because the government is anti business. What a joke. Regulations have been so badly striped of any meaning that corporations have been allowed to get completely out of control and screw themselves into bankruptcy, and then have the nerve to turn to tax payers to bail them out. Moreover, effective tax rates are now so low that a third of corporations pay no taxes at all. But, still, every time some entity makes a move on corporations to try and impede their predatory practices, they yell that the government is anti business, or it's some sort of socialistic take over. Lots of corporations aren't job creators in America anymore, they've become pinstriped gangsters. It's nothing more than the top 1% intending to keep 90% of the nation's wealth.
If the debt ceiling is lifted that is the only positive thing that has developed. Maybe in 2012 the teapartiers in the House will be defeated and these disastrous concessions will be reversed. For now there is no way for Obama to keep HIS pledges. At best we have to view this as temporary capitulation and hope for the best despite the odds.
Ralph Nader has outlined three or four solutions that immedicately take care of the deficit.
Most of it is just waste and corruption that drives both taxes on the Middle Class and the deficit up.
Entitlements don't have to be touched and are a minor component. In developed courtries they pose no threat to their superior and much cheaper healthcare systems.
Republicans of course deny this, but its the strongest argument that this is false debate, especially in regard to "Obamacare".
And Medicare and Social Security have been solvent and self-financing for 70 years.
We are bankrupt because of wealth and tax inequity, factories closed down and jobs outsourced and wars.
We WERE a wealthy country, but now no more, thanks to the last 10 years of political failure.
Sounds good, huh? Especially if you are sitting pretty at the top two percent of the economic pyramid in our country. You know, that same two percent that is bitching about rolling back tax cuts; that same top two percent whose income has skyrocketed in the last 30 years while everyone else's earning power has flatlined on the operating table.
All of this while the nation of morons busies itself with its iphones and its American Idol while munching away on a double-double. Pathetic.
Not the let the Democrats off. We need to vote much smarter, voting democrats is not enough.
Vote for the Progressive caucus in the primaries and the dems in the general. The real founders types.
http://cpc.grijalva.house.gov/
Not the DLC Obama/Clinton/Rahm corporatism anti-populist economics folks(not in the primaries):
http://en.wikipedia.org/wiki/Democratic_Leadership_Council
One party upholds this overtly, the other covertly (or as it has become apparent under Obama, not so covertly).
http://www.nakedcapitalism.com/2011/07/matt-stoller-dodd-frank-made-no-structural-changes-to-banking-system.html
I hope Obama makes good on this promise to end child labor laws so that the urchins are FREE to work in coal mines. Oh, you didn't hear? "Kids Love Coal" is the latest "sweetner" Obama threw onto the bone fire of the New Deal Programs to get a Debt Limit deal.
Thus we've gone from Enron to a total financial collapse and several other catastrophes like the BP oil spill or food contamination in between whereby industry, allowed to have it's way has ended up almost ended up destroying our entire way of life.
So what is the response to all of this? The industries fight with all their lobbying might to deep deregulation in place. The Right continues to demonize government and worship at the altar of 'free enterprise' even as their housing values plummet into the sea and the Republicans run on the platform of more deregulation.
Government is not the problem nor the solution. Corporations are not the problem or the solution. How we structure our government and how we regulate our corporations is. Either we're going to learn from what is happening to us or we're going to continue down the god forsaken path of neo-liberalism and 'laissez-faire' economics. If we continue down that road, I guarantee, human nature being what it is, those who are free to act without restraint or oversight will continue to destroy our way of life.
we dunt need no sinkin' facts, cuz weve got FAITH. USA USA USA
we dunt need to be payin ours bill jist cauze Nancie Pelosee says so.
I'z agreed wid de President -- end medicare and social security -- why's we payin the sick people to be sick, and why pay people not to work.
Government, regulations, agencies are the problem -- so do away with these
Also see Trickle Down Theory -- Reagan and Thatcher
Privatization of everything --
Destruction of the commons --
Globalism --
neocon / neoliberal - two sides -- same coin.
Embraced by both bankrupt political parties
http://www.corpwatch.org/article.php?id=376
Ignores the fact that there has never been a free market ..