Obama to Wall Street: Regulation Is Coming
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Barack Obama's speech on regulating financial markets today will not get the applause of his recent speech on race relations, but it was a not a standard stump speech and squarely pointed the blame for the nation's economic woes on Wall Street's ethic of greed.
"Our free market was never meant to be a free license to take whatever you can get, however you can get it," Obama said, speaking in downtown Manhattan. "Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one - aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so, we encouraged a winner take all, anything goes environment that helped foster devastating dislocations in our economy."
The speech was labeled by the Obama campaign as a call to regulate financial markets, but most of the underpinnings were a serious critique of the culture of campaign contributions and big-money lobbying in Congress, where big business in America - particularly the financial services sector - have convinced lawmakers to dismantle the system of checks and balances put in place after the Depression of the 1930s. The result, Obama said, was excessive greed is now hurting Wall Street as much as Main Street.
"The core of our economic success is the fundamental truth that each American does better when all Americans do better; that the well being of American business, its capital markets, and the American people are aligned," Obama said. "I think all of us here today would acknowledge that we've lost that sense of shared prosperity."
"This loss has not happened by accident," he said, continuing. "It's because of decisions made in boardrooms, on trading floors and in Washington. Under Republican and Democratic Administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. We let the special interests put their thumbs on the economic scales. The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both."
Obama proposed a series of remedies, which he said would face stiff opposition in Congress by members beholden to big money. After summarizing his prior proposals to deal with the mortgage crisis, he outlined his reforms for Wall Street.
Steven Rosenfeld is a senior fellow at Alternet.org and co-author of What Happened in Ohio: A Documentary Record of Theft and Fraud in the 2004 Election , with Bob Fitrakis and Harvey Wasserman (The New Press, 2006).