It has been more than 18 months since the financial sector collapsed, exposing rampant Wall Street abuses, sending jobs into free-fall and forcing a massive and unpopular taxpayer bailout.
The Great Recession has cost Maine thousands of jobs, leaving families’ lives turned upside down. Nationwide, the Wall Street debacle tore an 11 million jobs-size hole in our economy.
After Wall Street’s big banks created this mess, the rest of us have been forced to make hard decisions. Families struggle to make ends meet, having to decide which bills to pay. Our state legislators have chosen to make deep cuts to education, to essential services and to our towns and cities. And our communities, with decreased state funding now are forced to choose between cutting education and vital public services or increasing property taxes on families that already are struggling.
It’s clear who’s winning in this game: the Big Banks and their executives that pocketed $145 billion in executive pay and bonuses last year alone.
Unbelievably, after $700 billion in taxpayer bailout dollars, the Big Banks are back to business as usual. They still are not lending in their communities, and credit remains tight. They are fighting new taxes on risky financial speculation and excessive bonuses, even after handing out $145 billion in pay and bonuses in 2009. And they are pulling out all the stops to resist new financial rules that are so clearly needed.
On top of that, the 150 largest banks in the U.S have hired a lobbying group to launch an image-improvement campaign — to build trust in the financial industry.
We have a better idea. The big Wall Street banks should begin to earn trust — not through a public relations campaign, but by changing their behavior in two important ways. First, banks need to resume lending to help credit-starved communities create jobs, and second, they need to embrace a small tax to curb destabilizing short-term speculation and pay for the jobs they destroyed.
A small tax of about half a penny for every dollar on risky financial transactions such as stock, option and derivative trades would restore balance in the investment world. Even better than that, it would raise $175 billion to $350 billion a year to invest in American jobs. Major investors such as Warren Buffett have supported the concept of such a tax to reorient the economy toward long-term investments
And then, following Ronald Reagan’s famous advice (about foreign affairs), we should “Trust, then verify,” by reforming the rules for Wall Street, including creation of an independent consumer agency that will crack down on abuses by Big Banks and their CEOs and credit card companies to protect working families and small businesses. It’s clear that when left to their own devices, Big Banks have done little to rein in greed and plenty to drive our economy six feet under.
We need jobs in Maine. These proposals would raise the money to invest in the jobs of the future from the Big Banks that created the economic crisis and make sure their actions never can bring on financial disaster again.
That’s why Maine union members and community partners made three demands as we rallied at Bank of America in the past weeks:
Pay your fair share to restore the jobs you destroyed.
Stop fighting financial reform.
And start lending in your communities.
People in Maine who did nothing wrong and want to work have paid for the misdeeds of the Big Banks with their jobs, homes and retirement savings. Now it’s time for our government to hold Wall Street accountable and make them pay to create the good jobs they destroyed.
Richard Trumka is president of the AFL-CIO. Don Berry is president of the Maine AFL-CIO.