The Great Recession is far from over. Millions of Americans are without jobs or much hope of finding adequate employment anytime soon. Millions more have lost their homes and a new wave of foreclosures is set to sweep the country.
The sad truth - this epic disaster didn't have to happen. This was a devastating financial hurricane fueled by carelessness, incompetence and greed.
The release of the Financial Crisis Inquiry Commission's final report confirms what some of us have been shouting for the past several years: It did not have to happen, and it must not happen again. This financial crisis - described by Fed chairman Ben Bernanke as "the worst financial crisis in global history, including the Great Depression"- could have been avoided had Wall Street and federal regulators acted responsibly.
"The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public," reads the report.
If we choose to ignore the lessons that should be learned from this crisis, then we choose future peril.
Two years after this crisis began, millions of Americans are still suffering. People are wondering if today's high unemployment and lower expectations are a new normal. Yes, we have the Dodd-Frank financial regulations and a foundling Consumer Financial Protection Bureau. But we also remain in crisis. Some of us anyway.
I am incensed by the reaction of some to the FCIC's report. Already those who created this unprecedented global crisis are eager to move on - and to do so brazenly without learning any lessons. Wall Street is smiling again as the stock market steadily climbs. It is easy for financial titans to whistle a happy tune as they collect their obscene bonuses once again, but those on Main Street remain mired in the aftermath of the storm.
The narrative, according to those who caused this mess, is that despite the report's conclusion, no one could really have foreseen or prevented the financial calamity. And anyway, this report is too late to make a difference. Time to move on. Dodd-Frank is already law. Happy days are here again. But they aren't.
The abuse continues. Just ask anyone trying to negotiate a loan modification to save their home from foreclosure. Much of the blame for the Great Recession lies with abuses in the housing market - namely the creation of risky and unsustainable home loans that were packaged and sold as quality investments around the globe. And then the same people who created and sold these loans, bet against them to make even more money because they knew what they really were - financial toxic waste.
The Treasury's Home Affordable Modification Program (HAMP) was created to mitigate some of the financial abuse and give homeowners a chance to renegotiate terms of their loans and save their homes - and our economy. That was a good goal for all of us - even if you can steel your heart against the human tragedy involved in people losing their homes, large tracts of vacant, foreclosed homes are a cancer on our economy that creates problems far beyond the front yard of the foreclosed house.
But HAMP hasn't worked for most people. The Congressional Oversight Panel says HAMP may prevent 700,000 foreclosures - not the 3 to 4 million promised and certainly a small fraction of the 8 to 13 million foreclosures predicted to occur by 2012. The banks and lenders who put people into risky and unsustainable mortgages in the first place have gotten caught filing fraudulent, fly-by-night foreclosures as carelessly as they originated the loans. The banks are in such a hurry to foreclose rather than to save homes that in many cases they could not even be bothered to follow basic rules of reviewing documents - instead thousands are fraudulently robo-signed out of their homes.
So how can anyone say with a straight face that the status quo is A-OK, and that it's time we move on? Because these foreclosures - while devastating to individual families and horrible for our overall economy - make money for a few at the top of the rotten process.
On a daily basis, my office receives correspondence from homeowners desperately trying to renegotiate their loans and save their homes. The hoops these people are forced to jump through are maddening - especially when so many are shunted into foreclosure regardless of their best attempts to please the banks.
From one homeowner who knows from firsthand experience:
"Don't let ANYONE tell you the banks 'don't want your house' YES they do," wrote one frustrated homeowner. "I can't tell you how hard it is to see this happen and be helpless. To be told to 'take my emotion out of it' by attorneys. I've tried my hardest and the truth just didn't work. This country will never rebound when people with good credit can't get a loan and people with good experience can't get jobs."
And, "We're in an abyss," wrote another consumer who contacted my office. "We just want to resume our mortgage payments!"
The pain remains for far too many. The lessons from the financial meltdown certainly should not include: "It's too late now to do anything" or "It's time to move on." Taxpayers invested over a trillion dollars in bailing out those who created this disaster. We should expect more from our investment than a cavalier attitude and a quick return to giant corporate bonuses.
It is never too late to correct our mistakes. And if we do not, we risk repeating them. The FCIC report should serve as a wake up call. It details much of what caused this crisis, but reading the report doesn't fix the problem. The fact is that despite a near total collapse of our economy, far too little has changed to prevent a future implosion. We are far from finished protecting our country's or our individual financial futures.