Corrupt social systems have plagued the U.S. for decades, one of the most frequent and possibly overlooked types being the financial system. A major hub of all the action is Wall St., and their irresponsibility caused the wealth inequality to skyrocket, resulting in the hardship and suffering of the 99% and catering to the 1%. Even after all this, the government has yet to emplace the regulations necessary to fix the problem and stop it in its tracks. In order to begin mending the damage done by Wall St. merchant princes and financiers, the U.S. government must take the people who enabled it in the first place out of power.
In 2007, Wall St. finance companies began to take part in subprime lending(companies were giving loans to people who were expected to have a great amount of trouble paying it off). These loans were plagued with high interest rates and poor quality collateral, meaning that it was close to impossible to keep up with and poorly insured, and the customers were struggling to pay off their loans. In the 2010 documentary Inside Job, Robert Gnaizda, former director of Greenlining Institute, one of the few companies the fought for public interest, stated: “Goldman Sachs, Bear Stearns, Lehman Brothers, and Merrill Lynch were all in on this. Subprime lending alone had increased from 30 billion a year funding to over 600 billion a year in 10 years-they knew what was happening.” The companies were betting against loans they were selling people and then paid every time it failed. These companies-the same ones americans trusted to hold their money and receive sound financial advice from- were literally gambling their customers’ money for odds they created to be in their favor. What’s worse is that those in charge of overseeing these operations, to make sure underground scams like this don’t take place, opted for deregulations.
In December of 2000, the Commodity Futures Modernization Act (CFMA), written by financial lobbyists, was passed. This act banned the regulation of derivatives that allowed the companies to play into the hands of their own success. Any spark of hope that shone through to Congress was extinguished by the moguls who were benefiting from the corruption on Wall St., and anytime a company got close to being held responsible for this injustice they managed to be let off by some technicality left unchecked by the laws they created. Here lies the vicious cycles of corrupt institutions working together to get ahead as quickly and easily as possible, without the slightest regard to the country they are exploiting.
As Wall St. has corrupted the economy over the years, the government has remained stagnant and kept the same people in control of the departments that regulate Wall St. operations. They aren’t held accountable for their lack of morale and integrity and are even reappointed to hold these positions. John Thain, a successor of the previous CEO of Merrill Lynch, made $87,000,000 in 2007, and after the company was bailed out by U.S. tax dollars, the company then handed out millions in employee bonuses. Careless decisions like this resulted in the crash of the economy. These Companies had no cushion money to cover the costs of debt when everything fell apart. Though President Barack Obama’s presidential campaign was built on the promise of change, he, too, failed to bring it about as he reappointed former culprits of Wall St. corruption who were perpetrators in America’s financial deficit. . A few of these people include Tim Geithner, who aided Goldman Sachs’s gambling habits, Mark Patterson, former Goldman Sachs lobbyist, and Gary Gensler, who helped ban regulations.
If the U.S. government stopped to think about it, they would realize that Wall St. corruption does not just involve deregulation, but the people in charge of overseeing and enforcing them as well. They are the common denominator. The country can not begin to move past this until we are free of those whose selfish ways keep us from moving toward a better future. It has become very clear that whatever these people are or aren’t doing isn’t working for the country and expecting progress to come about without some sort of change is the very definition of insanity, yet we’ve been doing exactly that all this time. We are due for new leadership- leadership that doesn’t have corrupt history and shows promise of allegiance and integrity by putting public interest above their own.
Cole, Juan . “Top 10 Ways the US is the Most Corrupt Country in the World.” Informed Comment, 3 Dec. 2013, www.juancole.com/2013/12/corrupt-country-world.html. Accessed 24 Sept. 2017.
“The White House.” National Archives and Records Administration, National Archives and Records Administration, obamawhitehouse.archives.gov/. Accessed 3 Oct. 2017.
“Sony Pictures Classics presents Inside Job.” Sony Pictures Classic, www.sonyclassics.com/insidejob/. Accessed 2 Oct. 2017.