By Dennis Kelleher (this op-ed originally appeared in The Hill)
The economy is one of the most important issues to American voters, regardless of party affiliation. This makes sense given how much economic stress and distress tens of millions of American families are suffering. They are working harder and harder for less and less, barely able to make ends meet from paycheck to paycheck.
While there are many causes for these poor economic conditions and pressures, the financial industry in general and Wall Street’s too-big-to-fail financial firms in particular are significant contributors.
First, their recklessness and illegal activities crashed the economy in 2008, causing widespread unemployment, business failures, foreclosures and so much more. The damage has cost the country more than $20 trillion. They also caused trillion-dollar deficits and historic debt, which meant that there was less money to spend on America’s other priorities, be they funding for health care, education or infrastructure – everything received less funding as a direct result of the costs of the crash and the money that was diverted to bail out the financial system.
Second, finance is supposed to support the real economy, jobs and growth by investing in individuals and businesses seeking to achieve their American Dream. But too many have turned finance into a wealth extraction mechanism enriching the already-rich rather than a wealth creation system that benefits all Americans.
These are the direct or indirect causes of many of the problems that candidates are hearing about on the campaign trail. The lack of well-paying jobs, the student loan crisis, the growth of income inequality — all can be traced at least in part to the 2008 economic crash and the economic crisis it caused. And another crash would derail all of the ambitious plans that the candidates have laid out in other policy areas.
That’s why it’s so important that the candidates talk about and take positions on these key issues, which have been largely undiscussed: how to get the financial system to be free from taxpayer bailouts and crashes and to promote prosperity for all Americans by supporting the real economy.
To help voters sort through those issues, Better Markets is launching a Voter Education Guide this week to track where the leading candidates fall on key economic and financial issues, like protecting retirees and savers from Wall Street predators, and ensuring that taxpayer-funded bank bailouts and economic crashes never happen again. The Voter Education Guide uses the candidates’ past votes (if any) and their campaign policy positions to inform voters about their views on these key issues.
The Democratic candidates participating in the debate in Houston this Thursday night can kick off this critical discussion by addressing the following five key questions.
One: This week marks the 11th anniversary of the collapse of Lehman Brothers and the onset of the worst economic crisis since the Great Depression; American taxpayers had to spend, lend, pledge or otherwise use more than $29 trillion to bailout Wall Street and stop the crash. Do Too-Big-To-Fail financial institutions still threaten our economy, putting taxpayers at risk of another bailout and what will you do about it?
Two: The financial crisis cost our country more than $20 trillion and millions of Americans are still suffering from its effects, with the bottom 90 percent poorer than they were in 2007. The next president must have a concrete, credible and comprehensive plan to ensure this never happens again. What specific steps will you take as president to make sure another devastating crash like 2008 doesn’t harm another generation of Americans?
Three: Our criminal justice system is tilted in favor of those who have money and influence. Even when companies get caught breaking the law, they too often get let off with a slap on the wrist or a small fine that is paid for by their shareholders. No CEOs or executives seem to fear spending a night in jail or even losing their bonuses as a result of even widespread and egregious lawbreaking by their company. That must change. Will you bring accountability to Wall Street executives with legal actions against them personally, and banish those with a repeated history of lawbreaking?
Four: “Forced arbitration” takes away consumers’ rights to a fair hearing before an impartial judge in open court and enables corporations to avoid accountability and keep their ill-gotten gains, sometimes hundreds of millions of dollars. Are you in favor of forcing injured consumers and investors into secret, biased, corporate-friendly arbitration proceedings, and what will you do to stop the abuse of consumers of financial products?
Five: It used to be that banking existed to serve society by providing savings and funding mechanisms to create economic growth, jobs and broad-based prosperity, so that everyone had a shot at the American Dream. But all too often, Wall Street today is focused on self-serving, bonus-driven, short-term trading and investments regardless of the consequences. Getting finance to serve society again has to be a key policy goal. How will you ensure that finance serves society rather than engaging in anti-social activities that enrich Wall Street at the expense of everyone else?
If candidates answer these key economic and financial questions, voters will be better able to evaluate their willingness and ability to revive an economy that creates jobs, economic growth and broad-based prosperity as well as prevent a repeat of the 2008 financial crisis and the taxpayer bailouts. Our Voter Education Guide will be tracking these answers and the candidates’ other positions, votes and statements on the key issues so that voters can make better, more informed decisions.
Dennis Kelleher is the president and CEO of Better Markets, an organization that advocates for enhanced financial regulation and oversight.