Brown Keynote Speech at Americans For Financial Reform Forum on the Financial Crisis Ten Years Later
WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – delivered the following keynote speech today at the Americans for Financial Reform’s event titled "Regulating Wall Street --10 Years Later".
Sen. Brown’s remarks, as prepared for delivery, follow:
Thank you Lisa Donner and Marcus Stanley for organizing the panel and for the work of Americans for Financial Reform.
You are one of the main reasons we secured Wall Street Reform eight years ago, and you help us to protect it every day.
Think back to 2007 and 2008.
You hear sometimes from people in Washington who think the crisis started in fall of 2008.
But advocates in communities saw the crisis coming for months and years before that. I saw it unfolding in Ohio.
In the first half of 2007, my zip code – 44105 – had more foreclosures than anywhere in the country.
Years before, housing advocates had gone to the Federal Reserve in Cleveland and asked it to use its authority to restrain subprime lending.
The Fed did nothing. The OCC did worse than nothing.
The financial crisis followed decades of deregulation of the financial industry, culminating with a Bush Administration that ignored the escalating risks.
Families were being sold scam loans that stripped hard-fought wealth from them and transferred it to the pockets of shady lenders.
Stagnant wages meant families had to tap home equity to catch up on credit card debt or pay for unexpected medical expenses.
And Washington did nothing.
It took the worst crisis since the Great Depression – and it took your advocacy, and the activism of unions and civil rights groups and so many others – to get Washington to wake up.
We passed Dodd-Frank so that Main Street would never have to bail out Wall Street again.
And Dodd-Frank did a lot of good things – established the Consumer Financial Protection Bureau, put limits on derivatives, and forced the Fed to pay attention to risks at the biggest banks.
Many of us thought there was – and still think there is – something fundamentally rotten in the way the financial industry does business.
We’ve seen it with scandal after scandal at Wells Fargo. We’ve seen it at Equifax, which exposed 145 million Americans’ personal information to cyber hackers. A year later, Congress has done nothing.
We continue to see the power Wall Street has over the political system and the economy.
Look at the tax giveaway Congress passed last year –more than 80 percent of the benefits are going to the top one percent by the end of the decade.
But for Wall Street, it’s never enough.
Once the famous naturalist John Muir was talking with a wealthy railroad tycoon, and Muir remarked that he was the wealthier man.
The tycoon laughed and said, you live in a cabin in the woods, you live off subsistence farming. I’m a titan of industry, I have the fanciest things, how can you possibly be richer than I am?
Muir replied, “I have everything I want, but you always want more.”
That’s Wall Street – they always want more.
On the day President Obama signed Wall Street Reform into law, a top Wall Street lobbyist said it was “halftime.”
Industry lobbyists have spent every day since 2010 fighting to weaken and roll back the rules. And the collective amnesia has spread in this town.
This year, bank lobbyists convinced this Congress to pass legislation to roll back and water down the Dodd-Frank rules— for mortgages and large banks.
The Federal Reserve has yet to complete the rulemaking required by Dodd-Frank – more than half a decade later – but it says it will complete the rulemaking on the rollbacks right away.
The CFPB is in the fight of its life. We know how important it can be. When we put Rich Cordray in charge, someone who was willing to take on Wall Street, working Americans got real help.
Now, we have a nominee who is unsure if she will even defend the existence of the CFPB in court.
And the nomination of Kathy Kraninger isn’t the only nominee we need to be worried about. The Administration looks like a retreat for Wall Street executives.
And now we’re seeing exactly what happens when watchdogs are more like corporate lapdogs.
While Wall Street rakes in tax breaks and rule rollbacks, Main Street is struggling.
The recovery looks pretty good from the executive suite at the top of a Manhattan skyscraper. But it looks a lot different from a kitchen table in Mansfield or Marion or Marietta.
Hours are flat and real pay has actually dropped slightly over the past year for most workers.
Workers who were displaced by the crisis are more likely to have poor heath, and their children are more likely to do worse academically.
Other studies suggest a correlation between the Great Recession and the opioid epidemic, with a rise in opioid abuse in areas with higher unemployment rates.
Meanwhile, Wall Street and corporations are doing better than ever – they’re on track to distribute $600 billion or more through stock buybacks this year. Last year, the CEOs of the six largest banks got an average raise of 22 percent.
What teller, or sales person, or even bank manager got a raise like that in the last year?
We still need to fundamentally change how we think about the economy.
Our economy simply doesn’t value work the way it should.
People in Ohio and around the country are working harder and longer than ever, but with less and less to show for it.
Over the past forty years, the link between productivity and wage increases has broken. Workers produce more and more profit for companies, but don’t see the benefits.
Health care, housing, higher education are all getting more and more expensive, while wages have barely budged. To rent a basic two-bedroom apartment in Ohio, you need to earn more than $15 an hour. But we know too many Americans don’t make that, no matter how hard they work.
Hard work doesn’t pay off.
Wall Street has tried to convince us that when the stock market does well, the economy does well and vice versa.
But you know better. To most workers the idea that a stock market rally means more money in their pockets is laughable. Most workers earn their money through a paycheck, not through a statement from their broker
Wall Street’s business model systematically undermines American workers.
Corporations and their CEOs focus almost exclusively on their quarterly performance in the stock market.
Wall Street analysts reward corporations when they minimize their costs to boost short-term profits – even if the company’s already profitable.
Companies’ stocks are downgraded when they give workers raises, and rewarded when they lay them off.
Workers are nothing more than a line item in a budget – a cost to be minimized.
We need to change how we think about the economy – CEOs don’t drive the economy. Workers do.
Companies can’t be profitable without their workers.
And workers don’t measure time in quarterly earnings reports – they think in terms of school years, and 30-year mortgages, and years left to save for retirement.
Of course we need to protect Wall Street reform, provide consumers with stronger protections, and work to prevent another financial crisis. That’s a tall order in itself, but that’s not enough.
We need policies that restructure our economy so that workers share in the profits they create, and Wall Street doesn’t determine when workers keep their jobs or how much is in their paychecks.
We need to restore the dignity of work.
Last year in Columbus, I rolled out a comprehensive plan to begin to do that – it’s about raising wages and benefits, it’s about giving workers more power in the workplace, it’s about changing the incentives at the biggest corporations.
It’s also where you come in.
You stand up for those workers and their families– for the people who so often have no other voice in government.
Most people don’t have millions of dollars. They don’t have a Super PAC. They don’t have the Koch Brothers behind them pushing their interests. You speak for them – you tell their stories, and stand up to powerful special interests.
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