Issue Position: Standing up for the Middle Class

Issue Position

"Casino capitalism has entered an era of no restraints, and the effects are squeezing middle class families into financial despair. It's time to hold Wall Street accountable to Main Street." -- Stanley Chang

Wall Street reform is urgently needed to avoid another painful financial crisis. If it wasn't clear that casino capitalism doesn't work before the crash in 2008, it's clear now. Allowing big banks to gamble the savings of hardworking Americans on high-risk speculation is a proven hazard. Sure, the too-big-to-fail banks may go on a winning streak for a few years, but no gambler wins every bet. And when these gamblers lose, we all lose -- as the government spends billions upon billions of our tax dollars to bail them out, while untold thousands lose their jobs and life savings.

It's time to get back to basics.

It's time to make sure that banks aren't gambling with your hard-earned money. It's time to make sure that no bank is so large that the nation's economy is in danger if it goes bust. No more "too big to fail."

It's time to make sure that our nation's financial institutions are not engaged in business practices that place billions of dollars in bank deposits, billions of dollars in taxes, and hundreds of thousands of jobs at risk.

The Glass-Steagall Act was passed in the depths of the Great Depression and brought us the Federal Deposit Insurance Corporation, which guarantees the safety of the money in your savings account. This measure was intended to prevent bank runs, and for fifty years after its passing it worked perfectly. It wasn't until congressional Republicans stripped away at the regulatory power within the act that unethical and dangerous financial practices found their way back into our economy.

The Glass-Steagall Act also prevented savings banks from trading securities with depositors' money. Basically, Glass-Steagall said that if a bank accepted deposits, it could not engage in risky speculation with its customers' money. Savings banks were limited to issuing loans and trading in safe government bonds. Meanwhile, investment banks, which underwrote securities, could not take deposits.

Basic common sense: don't let banks use working families' money for risky speculation.

Unfortunately, the basic common-sense behind the Glass-Steagall Act wasn't popular with Wall Street. Glass-Steagall limited how big banks could become and -- as a result -- how much they could make in profits. So they lobbied for changes, and Glass-Steagall was chipped away over the years. Finally, the provision which created a wall between savings banks and investment banks from affiliating came crumbing down in 1999.

Casino capitalism has entered an era of no restraints, and we all know the effect this is having on American families.

I believe it is time for meaningful Wall Street reform. We literally cannot afford another financial crisis like the one we suffered in 2008. It's time to get back to basics. Keep savings banks and investment banks separate. And let's make sure Wall Street regulators start regulating Wall Street like they are supposed to.

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