With Saturday marking the tenth anniversary of the collapse of Lehman Brothers and the start of the worst financial meltdown since the Great Depression, Sen. Elizabeth Warren (D-Mass.) declared Thursday night that the only way to avoid another crisis is to break up the Wall Street banks that caused it and hold wealthy executives accountable for their crimes.
“Oh, yeah. Give me a chance,” Warren said when asked by Andrew Sorkin of the New York Times if she still supports breaking up big banks, many of which are far larger than they were before the 2008 crash.
“We have got to change the rules,” Warren declared, highlighting her effort to implement a 21st century Glass-Steagall Act to separate commercial and investment banking. “This Congress rolling back regulations on the biggest financial institutions, rolling back regulations on Wall Street, this is absolutely the wrong direction for us to go.”
Asked if the United States is prepared for another crisis—which a bipartisan deregulatory measure passed in March makes far more likely—Warren responded: “No, not even close.”
In addition to pushing for stronger safeguards against big bank speculation, Warren also argued in a tweet on Thursday that “we need to start holding Wall Street executives accountable” if we are to avoid another crash.
Far from being held accountable for their actions, former Lehman Brothers executives and staffers are reportedly holding a ritzy tenth anniversary get-together on Saturday to celebrate the anniversary of their firm’s collapse.
“I introduced the Ending Too Big to Jail Act to force law-breaking bankers to trade in their pinstripe suits for orange jumpsuits,” Warren said, highlighting legislation she unveiled in March.
If we want to avoid another financial crisis, we need to start holding Wall Street executives accountable. I introduced the Ending Too Big to Jail Act to force law-breaking bankers to trade in their pinstripe suits for orange jumpsuits. pic.twitter.com/qIXDEfiGFe
— Elizabeth Warren (@SenWarren) September 13, 2018
Warren’s warning about the vulnerability of the American financial system and renewed call to break up the big banks were echoed by progressive commentators, lawmakers, and journalists ahead of the official tenth anniversary of the crisis—which, for most Americans, never actually ended.
The official statistics say that the financial crisis is behind us, but for most Americans it's not.
— Equitable Growth (@equitablegrowth) September 14, 2018
As Rolling Stone’s Matt Taibbi noted in a crisis retrospective on Thursday, the overwhelmingly “poor, nonwhite, and elderly” victims of the crash have been neglected by much of the corporate press in favor of heroic-sounding narratives of bankers teaming up with regulators to save the financial system from total catastrophe.
“Persistent propaganda about what happened 10 years ago not only continues to warp news coverage, but contributed to a wide array of political consequences, including the election of Donald Trump,” Taibbi argued. “One of the main things the financial press missed in its countless crash post-mortems is that the subprime scam was significantly about race. In its particulars, it was really just a rehash of ancient race crimes like ‘contract selling,’ a predatory white-on-black home loan scam from the Jim Crow days.”
These scams ultimately had a disastrous impact on black families in the US, which lost an astonishing 50 percent of their overall wealth when the system came crashing down.
I don’t know. Only a very few people in the press, like @ddayen, spent significant time looking at the crisis from the point of view of real-world victims. So it remained an abstraction for many. https://t.co/ZwKdEKdnXl
— Matt Taibbi (@mtaibbi) September 14, 2018
As The Week’s Ryan Cooper has argued, the meltdown was made worse by the fact that the Obama administration—which was stuffed with ex-bankers—deliberately chose to prioritize bailing out Wall Street over assisting homeowners who were devastated by the foreclosure crisis that continues in the present.
Thanks to the Obama administration’s bailouts and the Trump administration’s massive gifts to Wall Street in the form of tax cuts and deregulation, America’s five biggest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs—have raked in more than $583 billion in combined profits since the crisis, according to a new analysis by Public Citizen published this week.
In an op-ed for USA Today on Friday, Morris Pearl—former managing director of the financial firm BlackRock Investments and now chair of the Patriotic Millionaires—argued that by allowing Wall Street firms to continue to expand and engage in risky betting, the Trump administration is actively heightening the risk of another major crisis.
“In an effort to inflate profits for big banks, the Trump administration and Congress are setting us up for another crash,” Pearl concluded. “Without adequate regulation, there’s no world in which bankers voluntarily refrain from taking reckless bets again and again, until we’re right back where we were 10 years ago.”