Rewriting the rules of our economy
We can restore Americans’ faith in government by ending the revolving door that Wall Street uses to rig the game against Main Street.
The 2008 financial crisis eliminated 8.8 million jobs and wiped out $19.2 trillion in household wealth. According to the Financial Crisis Inquiry Commission, a root cause of the collapse was the excessive and irresponsible compensation of bankers on Wall Street. Reckless bets with Americans’ hard-earned savings were encouraged, and when the bets went bad (as they did) the banks got bailed out, the bankers kept their bonuses, and the American people were left to pick up the pieces.
Almost a decade later, the impact is still being felt by ordinary Americans. Small businesses and hard working families are still suffering from reduced economic growth, job layoffs, lost income, home foreclosures and retirement savings that were wiped away.
I was proud to support Dodd-Frank, which required regulators to prohibit reckless compensation schemes like the ones that caused the financial crisis. Last year, I led a letter to the Federal Reserve, the SEC and others to finally put these rules in place. (You can read my letter to Federal Reserve Chair Janet Yellen, SEC Chair Mary Jo White and others here.)
Now I am pleased that action has finally been taken to propose new rules on Wall Street pay.
As the Washington Post reported:
The long-awaited rules are aimed at stopping executives from making risky financial bets to boost their pay and then collecting large bonuses before the fallout is clear. Under the proposed rules, big banks could demand the return of executives’ bonuses if their gambles didn’t pay off.
This is a good first step, and to his credit President Obama has called for these rules to be completed before the next President takes office. But with Americans’ trust in government eroding, we can and must do more to ensure that these rules are enforced.
For too long, the so-called ‘revolving door’ has allowed Wall Street to influence our regulators charged with oversight of the financial industry by promising lucrative jobs and bonuses for favorable treatment.
That is why last year, I also introduced reform legislation to close the revolving door between the financial industry and government.
The American people can’t afford to have government officials in the pocket of the financial industry that they are charged with overseeing.
We need to ensure that government officials are working on behalf of the public interest and our common good. If you’re working for the government, you’re working for the people — not for an oil company, drug company, or Wall Street bank or money manager.
The middle class has paid a steep price for the irresponsible actions of some on Wall Street. And the American people deserve to have trust in the fact that government is working for them and that the rules are not being rigged against them.
That is why I will continue to advance reforms that rewrite the rules of our economy and make it work for everyone, not just those at the top.
