05/01/2010 05:12 am ET Updated May 25, 2011

Let's Not Kid Ourselves: Unless You're on Wall Street, It's All Smoke and Mirrors

It was only a month ago that President Obama's tough talk about financial reform inspired us to hope for measures to protect taxpayers from future Wall Street shenanigans. Despite high unemployment, rising foreclosure rates and other lackluster economic indicators, Congress believes serious financial reform is not needed, and Wall Street can be trusted not to repeat the mistakes of the past. As it stands now, the financial reforms under consideration will do little to change the status quo, and many of us wonder if the White House has the political muscle to do anything about it. As the head of a national community group that works to insure that our banks lend responsibly to all people, the National Community Reinvestment Coalition, I will make the best of whatever we get from Congress to protect taxpayers from malfeasant lenders and bad lending practices. But let's not kid ourselves, Wall Street will win this legislative fight if nothing changes. The rest of it is smoke and mirrors, designed to pacify the masses, including people as different as liberal advocates and the conservative Tea Party crowd.

Detractors will say my thinking only promotes class warfare. Sorry to wake you up, but the war is already in full swing, and has been for years. Blue-collar and even middle-class families have been fighting to maintain whatever wealth they had built. But a very small and select group of uber-wealthy has continued to see their wealth grow, while the working-class has watched theirs shrink. The generals in this war are from the U.S. Congress and Wall Street and they have fought a masterful battle. Imagine having only a very small army, greedily stripping away the assets of the many and then when this small army goes broke, getting that same people who you just pillaged to bail you out. Thank you Congress, thank you President Bush (remember who brought us TARP and the big bank bailouts) and thank you Wall Street for nothing.

Like David Byrne of the Talking Heads, you may ask yourself, well, how did we get here?

Personally, I think the person most responsible for getting us here, more so than anyone, was the guy who never saw a tax dollar that he didn't want to spend three times; yes, I'm speaking of President Ronald Reagan. The great communicator really should have been called the great spender, the great destroyer or the great defender of Wall Street, take your pick.

The Great Destroyer killed the faith and good will that the American people had in their government. He made it fashionable to criticize and have contempt for the American government. Remember he said: "The eight most feared words in the world are, I'm from the government, I'm here to help." And, people have felt comfortable lambasting and ridiculing the American government ever since.

Like Senator Phil Gramm, the man the Washington Post once called a "relentless foe of government." Senator Gramm is an overlooked culprit in this class warfare; he almost singlehandedly stopped any and every effort to reign in abusive lenders, and then left the U.S. Senate to work for one of those lenders he protected after his wife lost her seat on the Enron board.

Once a great and beloved President challenged the people to "ask not what your country can do for you; ask what you can do for your country." President Reagan and Senator Gramm have taken that question off the table. Their challenge seemed to be, ask not how to contribute to society, ask yourself: what's good for me?

We must recapture those Americans who have lost faith in our nation. To be sure a self-serving Congress who seems to look out for themselves but not consumers challenges this faith. But if things are going to change, we need to build up a movement of people demanding real change. We do speak out because together we can make our democracy real and make our opinions matter.

On March 11, NCRC members will head to Capitol Hill, as part of our annual conference in Washington, DC, to advocate on behalf of a completely independent Consumer Financial Protection Agency with substantive enforcement powers to prevent financial institutions from hyping unsafe financial products like we witnessed in the lead-up to the subprime crisis. We also are pushing for the passage of an anti-predatory lending law, as Congress as not yet purged many of the same lending practices that caused the foreclosure crisis in the first place. We also oppose any effort to diminish state laws regulating the financial industry and favor the ability of bankruptcy judges to renegotiate mortgage loans, as one way to stem foreclosures.

NCRC also has proposed foreclosure prevention efforts that would not require legislative action. We want to see the Treasury Department acquire mortgage loans at a discount through the powers granted to the Administration under TARP or through the power of eminent domain. This would allow for the permanent and sustainable modification of loans, including principal reductions, which could then be packaged and resold to the market. The American people have seen Congress help out Wall Street, it's time to use TARP and other programs to provide real help to working Americans.

It's become obvious that trial modifications and loan forebearances -- the main thrust of the Administration's Home Affordable Modification Program -- are just delaying the evitable foreclosures -- foreclosures that are dragging down economic recovery efforts. After having gambled with trillions of taxpayers' dollars to prevent a global economic disaster and, as a consequence, keep Wall Street executives in a lifestyle they have become accustomed to, you would think a proposal to help borrowers stay in their homes would be given serious attention by government officials. So far, it hasn't. Surprisingly, though, some investors of mortgage-backed securities are beginning to see that taking a haircut on bad loans that they chose to invest in is more financially advantageous than having the loans fall into foreclosures. Still others are making money investing in these same securities and reducing loan principals to keep the borrower in their home.

Maybe there's hope after all -- if we can convince Wall Street that it's in their interest to do what's good not just for themselves, but for the rest of the country. I'm not holding my breath, though.