I'm going to Chicago next week for the American Bankers Association meeting. Oddly, I haven't been invited to the Roaring '20's dance party I hear they're having.
Why wouldn't they celebrate the era of wild money and hot times (which slid into the Great Depression)? After all, the bankers are doing well these days.
They're doing well because after financial institutions caused the global economic crisis, we bailed them out, to the tune of some $700 billion.
Now they're in good enough shape to pay the suits $7 billion in bonuses for driving working families and our economy to our knees -- to the verge of a second full-fledged depression.
Things might be turning around for the bankers, but for the rest of us, unemployment heads toward 10 percent and home foreclosures continue to devastate families and communities. Working families have lost health care, pensions and savings--and in exchange we've gotten predatory lending, outrageous overdraft fees and sky-high credit card interest rates.
Meanwhile, the bankers are doing the Charleston, taking taxpayer money, handing out bonuses for disastrous failure, becoming profitable without lending money that could put people back to work -- and spending billions lobbying Congress to kill financial reform.
Shameless. Absolutely shameless.
On Tuesday, about 5,000 of us will be in Chicago to tell them what we think.
It's called the Showdown in Chicago. We're gathering outside the American Bankers Association meeting to demand financial reform and re-regulation that will allow us to rebuild our communities, our lives and the real economy.
We've got a lot to rebuild.
For decades, these bankers have been dealing to each other in what amounts to their own private casino, inventing more and more exotic financial vehicles together and basically regulating themselves. Their Wild West capitalism allowed them to take outsized risk with no oversight and then come hat in hand to the American taxpayers when their house of cards collapsed.
They've become a menace. No one is safe while their private casino bankrupts the real economy and ignores necessary investments in jobs, health care and retirement without oversight or regulation.
This is a complicated topic, but we can break down a plan for reform into four basic needs.
- The Consumer Financial Protection Agency (CFPA) that President Obama has proposed. This agency would protect the public against credit card and mortgage rip-offs. The agencies that were supposed to protect us from financial meltdown failed. The CFPA would place consumer protection authority in the hands of a single agency that would monitor banks and other institutions and their credit products like mortgages and credit cards -- but not your butcher, as a ridiculous over-the-top ad by the U.S. Chamber of Commerce claimed.
- A council of regulators to identify and fix systemic risks that could threaten the entire financial system -- risks such as institutions becoming "too big to fail," too complex or too interconnected. When the government intervenes, the purpose has to be to protect the public, not just rescue executives and rich investors. The past year has proven that the Federal Reserve Board is just too close to the banks. We need either to reform and democratize the Fed or to give this job to a true public agency. Let's do it right.
- Bring the "shadow markets" into the daylight. Most people probably don't really know what hedge funds, private equity funds and derivatives are or do. You're not supposed to -- it makes them easy to manipulate. They've been unregulated and totally lacking in transparency. These vehicles need serious regulation and oversight before they suck more money into the black hole of convoluted transactions.
- Reform corporate governance and CEO compensation to protect the interests of long-term investors -- people saving for retirement, not speculating.
It's time we hold banks and other financial institutions accountable for making this mess that required trillions of our dollars to clean up.
It's time to hold them accountable for the pain they've inflicted on working families.
It's time to put them back to work for working people, supporting families and jobs.
I've been spending a lot of time on Capitol Hill, calling for reform in meetings with committee chairs and other members of Congress. And everywhere I go, financial industry lobbyists are there, pushing back all out to block reform.
Congress is deciding right now how it will shape financial reform -- we need congressional support and intense presidential leadership.
Call your members of Congress. They're sure hearing from front groups for the banks. They need to hear from you, too. Tell them to produce a financial system that isn't set up to reward big banks at the expense of everyone else. The money has to start flowing to regular people and businesses that can create jobs.
And if you're in Chicago on Tuesday, join me. We'll meet up at 10:30 a.m. at Wacker Drive and Michigan Avenue to march to the Sheraton Chicago Hotel & Towers where the bankers are meeting.
See you at the Showdown.
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