Wall Street: the Real Roadblock to Economic Recovery

When I think about what still needs to be done to build a true economic recovery, I think about workers such as Maria Guerra.
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President Obama’s bold leadership and the swift action bycongressional leaders last spring likely staved off a global economicdepression. Because of that work, our economy is on the path to growthand hundreds of thousands of jobs have been saved.

But we are not out of the woods yet. And when I think about whatstill needs to be done to build a true economic recovery, I think aboutworkers such as Maria Guerra.

Maria is a janitor I met last week in Chicago. She worked hard tobuy her own home and before the crash she co-signed a mortgage to helpher brother buy a home for his family. Since then, Maria’s brother waslaid off and his unemployment benefits have run out. Now, he has tochoose between paying his mortgage and scraping up enough money to putfood on the table.

The bank refuses to help them and Maria’s own economic security is in danger; she’s worried about losing her own home.

The sad truth is that nobody is spared from the impact of thisrecession. Some of us may still have our jobs or our homes but, likeMaria, we all have a family member or friend barely getting by.

Congress must act on legislation recently introduced to extendunemployment benefits an additional 14 weeks to help workers likeMaria’s brother. But it’s the architects of our current economiccrisis-big banks and Wall Street-which continue to be the biggestroadblock to our recovery.

Big banks and Wall Street begged for trillions in taxpayer bailoutsand backstops when they were on the verge of collapse. Now that they’reback on their feet, they are back to paying out billions in bonuses andclinging to the same failed policies that created the crisis in thefirst place.

Have the banks done anything to help families facing foreclosure?Have they increased lending to small businesses to create jobs? Havethey helped states and cities close their giant budget shortfalls?

Not a chance.

That’s why Maria and I -- and more than 5,000 other Americans from 20states -- converged on the American Bankers Association convention inChicago. It was the largest mobilization since the economic crisisbegan to demand banks stop fighting reforms that would help protect ourfamilies from future crises. And it was the beginning of a nationalmovement to hold banks and Wall Street accountable for their recklessbehavior.

Big banks and Wall Street have spent decades rigging the system sothat no matter what they win and workers lose and we must act now tobreak the hold they have over our economy.

To build long-term economic progress we must:

  • Create a strong Consumer Financial Protection Agency to serve as a watchdog against predatory and reckless banking products;
  • Crackdown on out of control executive pay that rewards short term risks over long term results;
  • End too big to fail once and for all by separating commercialbanking from investment banking and raising capital requirements backto levels that promote safe and sound banks;
  • Empower shareholders to act on executive pay and break the excessive power of executive-controlled boards;
  • Force banks to expand lending to small businesses and state and local governments to create jobs and save critical services;
  • Demand banks stop foreclosures and help families keep their homes;
  • Investigate, and if necessary prosecute, the big banks and Wall Street for crashing our economy.

Our current crisis presents us with an historic opportunity tofundamentally change the way we value work and wealth in our country.The window to act is closing quickly but I know we are up to thechallenge.

This post originally appeared on New Deal 2.0.

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