The presidential candidates sparred over financial reform in Wednesday night’s debate, with Mitt Romney attempting to tack to the center, proclaiming his support for Wall Street regulations. Republicans, however, have fought tooth-and-nail to neuter or eliminate the key agencies charged with writing and enforcing those regulations, among them the Consumer Financial Protection Bureau, which Romney has derided as “the most powerful and unaccountable bureaucracy in the history of our nation.”
This week, however, brought fresh evidence of the need not only for strong regulations but strong regulators, like the CFPB, as well, to enforce those rules and police Wall Street’s financial institutions. New York Attorney General Eric Schneiderman filed suit this week against JPMorgan Chase for ”multiple fraudulent and deceptive acts” at Bear Stearns, which is now owned by JPMorgan, in the run-up to the financial crisis. In fact, the fraudaulent behavior was so bad, according to the civil complaint filed Monday, that Wall Street traders were circulating rumors of a full-blown meltdown at Bear Stearns more than a year before the firm nearly collapsed, triggering the financial crisis:
By the end of 2006, [Residential Mortgage-Backed Securities] traders at other banks were beginning to hear “rumors of a credit meltdown at [Bear Stearns]” … According to the trader who had heard the rumor, the “precise description” of Bear Stearns’ state at that time was “def co[n] 3” - or “defensive condition 3” - the military term signifying a heightened state of alert. The trader sharing the “rumors” then pointedly remarked: ”little due diligence upfront makes for a bad day 12 months later.”
Wall Street regulators were apparently so ineffectual that a full year of rumors about a “meltdown” at one of the world’s largest financial institutions escaped their attention. Now, Republicans are working relentlessly to gut the very institutions charged with preventing a similar meltdown from happening again.
(Source: upwithsteve)
![pantslessprogressive:
“As demonstrators converged on Wall Street — with police blocking them from reaching the New York Stock Exchange — much of the news media paid little attention to the protests. Meanwhile, much of the conservative punditry has taken to mocking the demonstrations, with conservative Twitter users lambasting the “hippies” in New York City. CNN contributor and RedState blogger Erick Erickson labeled the protesters as “profoundly dumb.”
Certainly, debates about the tactics and strategy behind an anti-Wall Street campaign are warranted. But in a country where much of the populist energy has been absorbed by a movement that compared expanding access to private insurance to “death panels,” it’s worth reviewing why Americans and others should be protesting against Wall Street.
While many of the conservative defenders of Wall Street may be quick to portray protests against the American financial establishment as driven by envy of its wealth or far-left ideologies, the truth is that people have a very simple reason to be angry — because Wall Street’s actions made tens of millions of people dramatically poorer through no fault of their own. In 2010, the International Monetary Fund and World Bank conducted studies of the effects of the global recession — caused largely by Wall Street financial instruments that were poorly regulated by government policies — and found that the recession threw 64 million people into extreme poverty:
The International Monetary Fund estimates that the global economy contracted by 0.6 per cent in 2009 and the implications of this have been severe for many. Economic growth in developing countries was only 1.7 per cent in 2009 compared with 8.1 per cent in 2007. However, if China and India are excluded, the economies of developing countries actually contracted by 1.8 per cent. The World Bank has estimated that an additional 64 million people will be living in extreme poverty on less than US$1.25 a day by the end of 2010 as a result of the global recession.
And nearly three years after the start of the global economic crisis — where taxpayers in multiple countries were called upon to save the financial industry — most of the banking elite’s top executives remain virtually untouched. There have been almost no high-profile convictions for fraud and related financial crimes, banking profits continue to soar, and unemployment not just in the U.S. but globally remains very high.
Given these facts, the question is not why more than a thousand people demonstrated on Wall Street yesterday. The question is, why aren’t even more people in the streets of the financial district in New York City?” - Zaid Jilani, ThinkProgress
[Photo: Paul Weiskel]](http://24.media.tumblr.com/tumblr_lrq7u2RYT01qzr73ro1_1280.jpg)
