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Since the financial collapse of 2007 it has become apparent that the banking industry is under regulated and over zealous in their search for expanding profits. It appears their greed knows no bounds. Thus, the job has fallen to congress which has shown to be apathetic regarding the life of average Americans who are facing financial ruin. There is one brave congresswoman, Elizabeth Warren, who seems poised to take on the banking lobby. However, the chances of her reforming our financial institutions will be nil if the rest of congress does not join her fight.

Many believe the roots of the financial crisis began when the Glass-Steagall act of 1933 was repealed by the Gramm–Leach–Bliley Act of 1999. This allowed securities activities and affiliations between commercial banks and securities firms. The hope was that the money made on such affiliations would trickle down to everyone and strengthen the economy.

As I’ve mentioned before, “trickle down economics doesn’t work.” All one has to do is look at the shrinking middle class as corporations who are now counted as people continue to widen the economic disparity in America.

What did members of the financial elite believe before 2007. Here are some emails. This one from a Standard and Poor’s employee.

“Let’s hope we are all wealthy and retired by the time this house of card falters.”

Here’s an email from Thomas Mannix.

‘We believe that the loans that Lehman originated in 2005 and 2006 through the captive volume were originated under relaxed standards ( Aurora) and that the residuals retained from these securitizations may come back to haunt Lehman.’

So these folks knew of the impending crisis and did nothing about it except make money and place a large number of Americans at risk. Most if not all should be in jail.

There is on politician who appears up to the challenge. Elizabeth Warren was the principal architect of the U.S. Consumer Financial Protection Bureau. A bureau so unpopular with Republicans that they refused to confirm her as its leader. So, she turned around and ran for U.S. Senator from Massachusetts and won. In the senate she has been a thorn in the side of financial institutions that do not meet basic regulatory requirements. She is also a supporter of a second Glass-Steagall type of bill to further protect consumers.

Here is a quote from Ms. Warren.

“There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

Warren seems to have a solid grasp of the disparities in our current financial climate. However, two problems remain. One, when will Republicans end their infatuation with the rich and understand you build a solid financial sector from the bottom up? Two, will the Democrats show the courage of their beliefs and fight for a system that is fair for all? If those two scenarios do not happen, Ms. Warrens courageous attempts to change the way America does business may be for naught.

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Comment Preferences

  •  Tip Jar (3+ / 0-)
    Recommended by:
    prfb, FreeTradeIsYourEpitaph, Cliss

    The truth is that there is nothing noble in being superior to somebody else. The only real nobility is in being superior to your former self. -Whitney Young

    by Madrigal Maniac on Sun Jul 28, 2013 at 12:39:22 PM PDT

  •  Fact is, the Congress is tasked by the (1+ / 0-)
    Recommended by:

    Constitution with managing the currency, as well as other weights and measures.
    However, Congress abrogated that responsibility when it set up the Federal Reserve Banks, thereby insuring that bankers would get a cut of every public dollar spent. Lending those dollars back to the Treasury at interest adds insult to injury. We're supposed to pay to use our own money.
    In a rational world, Congress would distribute our currency and, rather tha having to constantly issue more, set up mechanisms to insure that the money circulates and comes back (revenue) to the Treasury to be counted and quantified.

    Now, it is possible that some members of Congress are directionally challenged and do not know where things come from and where they go, nor the proper order in which events occur. However, it seems reasonable to suggest that members of Congress enjoy the power of rewarding some people and punishing others, of dispensing dollars to supporters and rationing them so the undeserving get none.
    Indeed, it even seems logical to suggest that as our natural resources have all been dispersed or set aside for environmental reasons, bribing the electorate with dollars to ensure the long term tenure of Congress critters makes sense. Then too, while the Democratic Party has come to represent the interests of people who work with their hands and make the natural environment productive, the Republican Party has increasingly attracted people who need to be served or rewarded for speculating with other people's assets.
    What would the financial fraternity do, if they couldn't play with money and take a cut out of every dollar spent?

    We organize governments to deliver services and prevent abuse.

    by hannah on Sun Jul 28, 2013 at 12:59:36 PM PDT

  •  Absolutely right. (0+ / 0-)

    Excellent diary.

  •  . (0+ / 0-)

    a very important topic that is barely mentioned in an intelligent or informative fashion by MSM

    "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." -James Madison

    by FreeTradeIsYourEpitaph on Sun Jul 28, 2013 at 05:59:00 PM PDT

  •  That's Senator Warren (0+ / 0-)

    I too am a huge fan of what Senator Warren is doing, but please use her proper title--she's a United States Senator, not a "congresswoman."

    "...if they conscripted wealth like they have conscripted men, this war would not last over forty eight hours." Joseph Gilbert (Gilbert v. Minnesota, 1920)

    by kevin ssn on Sun Jul 28, 2013 at 08:12:51 PM PDT

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