In the movie “Wall Street.” Michael Douglas plays Gordon Gekko, the iconic Wall Street villain: a slick, ruthless financial cowboy who would scam his own mother for a quick buck. Gekko’s famous quote became the mantra of Wall Street: “Greed, for lack of a better word, is good.” And while the movie was a work of fiction, real-world Gordon Gekkos on Wall Street took his message to heart — recklessly gambling, swindling and cheating their way into huge personal fortunes — and left the American people footing the bill.
The American public is rightly outraged with Wall Street. They helped create the biggest economic downturn since the Great Depression.
The House and Senate are beginning the process of merging their versions of Wall Street reform into a single bill that will regulate Wall Street and bring greater accountability and transparency to our financial system. The two bills take significant steps to regulate the previously hidden derivatives market, protect consumers with a new Consumer Financial Protection Agency, limit executive pay and end taxpayer bailouts.
But I am not yet satisfied by either version of the bill.
Neither adequately ends “too big to fail” and neither restores the barrier between traditional banks and investment banks, a barrier that served the United States well for decades, until it was repealed in 1999.
I will continue to push for stronger measures to limit the risks of unregulated derivatives and end the problems of “too big to fail.” I have offered an amendment to cap the size of banking institutions, because if a bank is “too big to fail,” it’s too big. I also offered an amendment to the House version of Wall Street reform to reinstate the Glass-Steagall Act, a measure born out of the Great Depression that prevents banks from engaging in risky investment activity, and separately co-sponsored a bill, The Glass-Steagall Restoration Act.
We must hold Wall Street accountable. We must end the practices that rewarded the few people whose greed caused our severe economic downturn. We must make sure that the American people never again pay for Wall Street’s sins.
That is why I voted against the Troubled Asset Relief Program (TARP) bank bailout bill because I thought the bailout plan was fundamentally flawed. The bailout didn’t have enough transparency or oversight, nor did it contain provisions that guaranteed the taxpayers’ money would be paid back. Once it passed, I voted to pass legislation to insert oversight and regulation TARP funds to help address the bailout bill.
Our economy should reward people who provide products, services, talents and ideas that benefit consumers. Those who produce dangerous products, practice deception or promote chicanery should be prevented from harming consumers.
Some argue that regulations will choke off free enterprise. I argue that we have tried the unregulated approach to our financial system for years. It hasn’t worked. It’s time for a saner approach that puts in place common-sense rules of the road.
Free enterprise, itself, depends upon the existence of rules of the road to prevent economic collisions between those who would put our economy and risk and the American investor and consumers. In fact, free enterprise will thrive within a sensible framework of legislation. Reform will strengthen our economy by increasing competitiveness, shining light onto the dark practices of Wall Street and providing consumers with the information they need to make educated financial decisions.
Our economy is starting to turn around, but we must learn from the recent past and enact reform legislation that will create greater transparency and accountability on Wall Street with smart, effective oversight.
U.S. Congressman Jay Inslee represents the 1st District, which includes Bothell and Kenmore.
