Elizabeth Warren on Budget & Economy
Massachusetts Senator; head of CFPB
Franklin Roosevelt reined in the big banks and giant corporations in ways that had never been done before. Government became a more active participant in keeping markets honest. Together, over time, we built economic stability and growth. In the 1980s, Ronald Reagan turned that around. He declared that government was the enemy and began unraveling the regulatory net, and he led the country down a path that ultimately resulted in the greatest economic crash since the Great Depression.
For starters, we should put in place a modern version of Glass-Steagall and separate plain-vanilla banking like checking accounts and savings accounts from crazy risk-taking on Wall Street. This doesn't have to be partisan. My first cosponsor for a twenty-first-century Glass-Steagall bill was the Republicans' 2008 presidential nominee, Senator John McCain. In 2016, Donald Trump campaigned on this idea, and, at his insistence, adopting Galss-Steagall was added to the Republican platform. But the Republican leadership has refused to move any such legislation and now President Trump has put in place an economic team that is headed in the opposite direction.
Here's another idea: The SEC should hire a leader who doesn't work for Wall Street.
Oh, and here's a good one: when CEOs break the law, they ought to go to jail, just like anyone else.
When risk and cost aren't disclosed, and when market data and information are not made publicly available, it's bad for families, it's bad for markets, and it's bad for our country.
The death wouldn't be a public execution. Instead, the Senate Banking Committee would propose a financial reform bill with no consumer agency. No one would ever know exactly who had killed it, or why.
I tried everything. I wrote an Op-Ed for the Wall Street Journal. I showed up [on TV shows]. To me, the issue was simple: Banks versus families. And the request was reasonable: A public vote. The lobbyists bore down. Plan A: Kill the agency. Plan B: Maim it so it won't interfere with the big banks' business plans.
Martha Coakley and I wrote an op-ed piece in the New Republic, strongly advocating for a new agency. [The article was entitled, "The Right Way to Regulate", New Republic, November 18, 2009.
All around the country, the overwhelming majority of people filing for bankruptcy were regular families who had hit hard times. Nearly 90% were declaring bankruptcy for 1 of 3 reasons: a job loss, a medical problem, or a family breakup (typically divorce, sometimes the death of a husband or wife). By the time these families arrived in the bankruptcy court, they had pretty much run out of options.
Worse yet, the number of bankruptcy families was climbing. In the early 1980s, Banks complained loudly about unpaid credit card bills. The word "deadbeat" got tossed around a lot. It seemed that people filing for bankruptcy weren't just financial failures--they had also committed an unforgivable sin.
No single change made the difference. Instead, it was death by a thousand cuts. The law got more complicated. The paperwork multiplied. Single mothers got less help, and they had a harder time collecting past due child support. Filing fees went up. Some people were still eligible for relief, some people weren't. Some debts could be discharged, some could not. There were hundreds of changes, some big and some small, but every change tilted in the same direction: Squeeze the families in trouble and increase the profits for big banks, credit card companies, car lenders, and a slew of other very successful businesses.
By the time TARP came along, pretty much everyone had grown to hate TBTF [Too Big To Fail]--except for the bankers who benefited. TBTF allows the megabanks to operate like drunks on a wild weekend in Vegas. They can take any kind of crazy risk--put $1 billion on black 22!--and if the bet pays off, the CEOs and the shareholders will be richer than kings. If it doesn't pay off and the bank is wiped out, the taxpayers will foot the bill. A no-strings-attached bailout created a Too Big to Fail monster, and I was pretty sure we'd be paying for that mistake for a long time.
After a little eyeball rolling, someone finally answered, "Uh, it'll take complaints."
I figured we could be stupid for a while. "Uh-huh. And what will we do with the complaints?"
"Uh, take them."
"And then what?" We eventually got to the key point: A lot of government agencies collect complaints from consumers, but to those who complained, the process often seems like a dead end. Nothing seems to happen.
Surely there had to be a better way. To begin with, a 21st century agency could use new technologies to take complaints online, tag them electronically, email them to the appropriate bank--and then track what happened.
And what if we also made the complaint data PUBLIC? The big banks would HATE this. It would be their worst nightmare come to life: we'd be taking their dirty laundry and airing it in public. The bank lobbyists got more hostile. There was even talk of a lawsuit if we went ahead. But we went ahead anyway.
Yes, the deficit is a problem, and it deserves serious attention, but I don't buy that there's only one way out. I think we have to face a more fundamental issue first: How we spend our government's money is about values, and it's about choices. We could cut back on what we spend on seniors and kids and education, as the Republicans in Congress insisted we should. Or we could get rid of tax loopholes and ask the wealthy and big corporations to pay a little more and keep investing in our future. How we spend our money isn't some absurdly complicated math problem. It's about choices.
In those speeches she would outline the impact on middle-class Americans of rising health-care costs, burgeoning debt, and the depletion of not only their savings but also, with the rise in joblessness, their confidence. She spoke of "the Wild West" conditions deregulation had created, where banks could sell virtually any product they wanted, on any terms: mortgages they knew consumers could not pay off, credit cards whose rates they could raise at whim. Her final remarks: "We cannot run our country without a strong middle class. We cannot run a democracy without a strong middle class," she said, her voice quavering slightly. "If we hollow out the middle class, then the country we know is gone."
[We tried to] find a couple of good books we could recommend. Everywhere we went, we found plenty of books on the difference between bull and bear markets, and lots of tips on how to find a great deal in potato futures. In other words, we found oodles of advice for people who are financially secure and just want to make a little more money.
But what about the people who AREN'T so secure? What about the people who stopped us in the grocery store, the mothers at the preschool, and the guys at Home Depot? Where was the advice for them? It didn't exist. Se we developed "All Your Worth."
Christian Coalition publishes a number of special voter educational materials including the Christian Coalition Voter Guides, which provide voters with critical information about where candidates stand on important faith and family issues. The Christian Coalition Voters Guide summarizes candidate stances on the following topic: "Passage of a Balanced Budget Amendment to the U.S. Constitution"
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