Little more than a decade ago, Wall Street greed and government inaction caused the worst economic slowdown since the Great Depression. Unemployment rates in Southwest Washington doubled. Neighborhoods were decimated by foreclosure. And now? Banks are bigger and more powerful than they ever were, homeownership rates have fallen, and income inequality has worsened. Some parts of our district have still not fully recovered.
Until we put limits on what Wall Street can do to turn a profit, our livelihoods will be subject to the whims of Wall Street gambling. Banks should not be able to take undue risks with our money. To accomplish this, Congress needs to reinstate the Glass-Steagall Act to keep commercial banks from gambling with federally-insured deposits. Additionally, no bank should be “too big too fail.” When banks are so big that their bankruptcy would tank the global economy, the government is forced to bail them out. At that point, banks have no incentive to curb risky behavior. They win no matter what happens to us.
We need to close the revolving door between Wall Street and the highest levels of government. The SEC should have the power to hold banks accountable in a real way. This means we need to eliminate conflicts of interest between outside auditors and the banks they audit. When banks commit fraud or money laundering, the SEC must have the teeth necessary to give more than a slap on the wrist.
With growing income inequality and the economic impacts of climate change threatening the long-term stability of the economy, short-term economic thinking is not an option. For all our sakes, it’s time for a responsible financial system that doesn’t gamble with our futures.