Seven years after the Bush financial crisis and the subsequent Great Recession, it’s becoming clearer every day that the biggest banks on Wall Street haven’t learned a single thing. They’re back to their old dirty tricks, running amok while the Securities and Exchange Commission (SEC), the agency supposedly keeping watch over the financial giants to make sure they don’t cause another recession, stands idly by while Wall Street plays high-risk blackjack with public funds-threatening to implode our economy once again.
America’s real financial watchdog and consumer champion, Senator Elizabeth Warren (D-MASS), is furious at the SEC for their failure to take any substantial action to rein in Wall Street’s dangerous activities. Warren penned a harshly worded, 13-page missive to the Chairwoman of the SEC, Mary Jo White:”To date, your leadership of the Commission has been extremely disappointing…You have not been the strong leader that many hoped for — and that you promised to be.”
Warren, who originally approved of Obama’s choice of Ms. White and voted to confirm her, identified four key confirmation promises that the Chairwoman has thus far failed to make good on. Under Ms. White’s tenure, the SEC has failed to implement a key provision of the Dodd-Frank Act which would require companies to reveal how much their CEOs are paid in comparison to the average worker.
More concerning is the SEC’s granting of waivers to big Wall Street banks who are under investigation for criminal offenses. The waivers are usually given to clean companies, allowing them to bypass certain restrictions which makes it slightly more difficult to make billions of dollars with computer algorithms. For the first time since 2005, the SEC is granting the waivers to banks accused of criminal violations, including JP Morgan and Citigroup, who were just found guilty of rigging currency and conspiring with foreign banks to cheat the market.
Warren also takes aim at Ms. White for allowing the Wall Street banks who do get caught violating finance law to settle without pleading guilt- a slap on the wrist, a drop in the bucket fine, and back to business as usual. Ms. White has also had to recuse herself from several important cases due to her past at a Wall Street defense firm, and her husbands ongoing employment at a Wall Street bank. In hindsight, it appears that her prior connections and familial obligations make her untrustworthy and possibly collusive with the very institutions she is supposed to police.
On top of all this, Ms. White has made no progress on addressing undisclosed political campaign donations, written large loopholes in the Dodd-Frank Act, and issued new rules for small business capital that do not take enough steps to protect the consumer from the ruthless, Darwinian brutality of Wall Street hypercapitalism.
The SEC’s perpetual failure to rein in the power of Wall Street is a critically serious problem for our nation. It hasn’t even been ten years since the avaricious gambles taken by the big banks plunged the entire world into a recession, but they’re back to their old tricks- and stronger than ever before. In 1990, the top five banks in America owned 10% of the nation’s banking assets- now it’s up to 44%. They spent $169 million on the last election cycle and are battling to roll back the Dodd-Frank Act in its entirety. The SEC is a David in a field of Goliaths; reluctant to prosecute because of concern for the repercussions on the economy. Warren and Sanders have it right- its time to bust up the big banks and cripple Wall Street once and for all. Banking should be boring, not high-stakes gambling where the stakes are the livelihoods of millions of Americans.
Opinion columnist and former editor-in-chief of Occupy Democrats. He graduated from Bennington College with a Bachelor's degree in history and political science. He now focuses on advancing the cause of social justice and equality in America.