A recession is imminent, the experts say. We're in the worst financial crisis since the Great Depression. Americans are not only fearful of what's to come, but also are left wondering: what led to the meltdown on Wall Street and the suffering of everyday people on Main Street, and what can we do about it?
Poor lending practices and a sharp increase in credit card debt have contributed to the current economic crisis, leaving Americans also asking who contributed to the poor decisions that were made in the first place. According to the Center for Responsible Politics, companies like Merrill Lynch and Lehman Brothers, which were bought out by the government at the fall of our economy, were among major contributors to political campaigns.
http://www.opensecrets.org/news/2008/09/wall-street- shakeup-connects-t.html
This raises the question did campaign contributions and lobbying by the financial sector contribute to the meltdown on Wall Street?
In looking at the numbers, it's easy to see the power that the financial industry wielded over campaigns. In 2008, the financial, insurance and real-estate industries contributed $373,178,766 to federal campaigns. This is more than five times the amount contributed in nearly two decades before. And, within that sector, "the two industries getting the most attention right now [are the] securities and investment industry and commercial banks" which have together contributed over $150 million to finance campaigns.
http://www.opensecrets.org/industries/indus.php?ind= F
According to the Center for Responsible Politics' Open Secrets website, dollars contributed by the financial industry played a significant role in the Wall Street bailout:
"Election after election, the finance, insurance and real estate sector has been the top campaign contributor in federal politics, giving more than $2 billion to federal candidates and political parties since 1989." This had a powerful impact on the vote for the $700 billion bailout for Wall Street, when "263 House members who supported the bailout received an average of $833,077 since 1989 from the industries that were most eager to see the rescue bill passed."
http://www.opensecrets.org/news/2008/10/in-houses-fi nal-bailout-vote-m.html
"In the Senatesenators who supported the bailout received an average of $3,986,723 from the financial sector since 1989 - 139 percent more than their opponents, who had received $1,671,029, on average. Even excluding the millions of dollars that senators running for president in 2008 have collected from political action committees and individuals associated with the finance, insurance and real estate sector, money from the sector was soundly on the side of the bill's supporters."
The connection between campaign contributions and the votes of our representatives has become more than apparent. With the financial industry lining the pockets of candidates and legislators, it's no wonder policies have been passed in the last decade that call for de-regulation of the industry.
In 1999, Congress voted on a bill known as Gramm-Leach-Biley, which would lift regulations that were set on banks as a result of the Great Depression so as to protect our economy from another downfall. The Glass-Steagall Act passed in 1933 as a way to keep commercial banks from taking risks with depositors' money, setting up a "regulatory wall between investment banking and commercial banking, prohibiting commercial banks from underwriting insurance or securities."
http://www.opensecrets.org/news/2008/09/money-and-vo tes-aligned-in-con.html
Lawmakers who voted in favor of Gramm-Leach-Biley "received about $180,000 in campaign contributions from individuals and PACs in the financial sector" between 1997 and the vote in November 1999. Those who voted against the bill received half the funding of those in support.
Passage of Gramm-Leach-Biley enabled large financial institutions to get even larger. According to the Center for Responsible Politics, "critics of Gramm-Leach-Bliley predicted that if these mega-banks were to ever fail, the impact on the U.S.
and global economy would be so great that the public treasury - i.e. taxpayers - would have to rescue them."
Sure enough, not quite a decade later, taxpayers are footing the bill to the tune of $700 billion to keep our economy afloat. Campaign contributions and lobbying by the financial sector greatly contributed to the meltdown on Wall Street, and Main Street
is now paying for the consequences. It's time for our politics to put people before profits. We can no longer afford corporate greed, de-regulation of the industry and millions of dollars deciding the votes of our lawmakers. We need a political system where people matter more, and money matters less.