Rep. Matt Cartwright: Why reopening Wall Street 'casino' wrong choice for Main Street
When the 2007 financial crisis struck, Wall Street was the epicenter.
Big banks tricked Americans into mortgages they couldn't afford through predatory lending practices. Then, they packaged those doomed mortgages into securities, which they traded as triple-A securities, even though they knew they were rotten at the core.
By the time the whole house of cards came crashing down, they had devastated the financial system — but not before cashing out with their multimillion-dollar bonuses with money that belonged to the U.S. taxpayer. They did nothing to keep their greed in check because they knew Americans would have to bail them out at the end of the day.
The damage didn't stop there; the ripples spread throughout the United States, leaving shuttered businesses and foreclosed homes in their wake. Everyday Americans suffered because of Wall Street's risky bets and fraudulent deals. The financial crisis demolished 8.7 million jobs, raised national unemployment to 10 percent, and destroyed almost half of the average middle-class family's wealth.
Our country has worked hard to build the economy back up to full strength. From small business owners persevering through hardship to households working hard to get back on their feet and new financial watchdogs making sure everyone plays by the rules, the building blocks have been laid for a more stable economy. Over the last decade, we have put safeguards in place to ensure there are sufficient checks on irresponsible financial activity
But now, special interests are trying to topple these blocks.
Now, the Republican-controlled Congress is rolling out its Financial Choice Act — we're calling it the Wrong Choice Act — that takes us back to the times of unfettered Wall Street gambling with the American checkbook.
This bill would repeal the Volcker Rule that prevents the very same types of risky trading practices that started the financial crisis.
This bill would cripple the Consumer Financial Protection Bureau beyond repair. That is the same consumer bureau that took Wells Fargo to task for the millions of phony accounts they created without their customers' knowledge or consent, and it's the same consumer bureau that has returned over $10 billion to the American taxpayer since its inception in 2010.
This bill would provide a loophole for big banks to avoid the stress tests that ensure they can survive another financial crisis without relying on another taxpayer-funded bailout.
This bill would gut a number of provisions established to rein in irresponsible pay to executives — specifically the executives that got us into this whole mess in the first place.
This bill would eliminate a requirement for corporations to disclose how their CEO's pay compares to the average pay of all other employees. This is no costly, overbearing regulation — it's a mandate for transparency. And it allows us all to see how certain individuals are getting rich beyond belief no matter what disastrous impact they may have had on the lives of everyday Americans.
And this bill would eliminate a rule that bars incentive-based executive pay that encourages "inappropriate risks." Paying bonuses for putting our national financial stability at risk is simply immoral.
Proponents of this bill even want to abolish a rule requiring companies to disclose whether executives and board directors are allowed to bet against their own stock — like Enron did in the early 2000s.
We can, and should, reduce regulations on small businesses such as community banks. But going back to the days of Enron is simply a bad idea and the wrong choice for our country.
I am proud to say I voted against this bill Thursday. From experience, we know better than to gamble with our future.