U.S. Senator Robert Menendez is trying to unwind the safeguards implemented to protect $2.7 trillion in money fund assets, along with the entire global financial system.
While rolling back regulations is a gift to billionaires and giant banks, consumers stand to lose everything in another economic disaster like the one Menendez helped trigger in 2008.
That is to say, Menendez voted in 1999 to repeal the Depression-era law enacted by President Franklin Roosevelt and Democrats in Congress to stop bankers from gambling with other peoples’ money. Less than ten years later, everything crashed.
More than 9.3 million Americans lost their homes while taxpayers bailed out big banks through the TARP program, for which Menendez also voted. Congress and Wall Street’s fading memory shows how out of touch they are with normal people, because we remember it all very clearly.
While the U.S. economy is improving, most of us remain in the shadow of the Great Recession, a period in which more than eight million Americans lost their jobs, nearly four million homes were foreclosed each year, and 2.5 million businesses were shuttered.
Kurt Schacht, Managing Director of Standards & Advocacy at the CFA Institute, who criticized concerted efforts to roll back the Dodd–Frank Wall Street Reform and Consumer Protection Act, pointed to legislation co-sponsored by Menendez, the Consumer Financial Choice and Capital Markets Protection Act of 2017.
“Rising defaults in subprime mortgages kicked off the global financial crisis in 2007, but it was a failure in money market mutual funds that was the one-two punch bringing the global capital markets to a halt nearly a year later,” said Schacht.
“[W]illfully making capital markets susceptible to the mayhem seen a decade ago by removing modest systemic risk protections is something entirely different,” said Schacht.
“Regardless of how it is structured or how it is packaged by proponents of lighter touch regulation, reintroducing stable (net asset value) NAVs for prime money market funds would be imprudent and systemically perilous,” said Schacht, who explained that the Menendez legislation “continues the persistent financial industry assault on systemic protections.”
Menendez voted in 1999 to repeal Glass-Steagall, then he voted in 2008 to bail out the big banks and now, he wants to unleash that kind of reckless greed upon us once again.
Foreclosure signs around our state continue to illustrate to the lingering effects of the worst economic downturn since the Great Depression. New Jersey is leading the nation in foreclosures, with nearly 70,000 properties going through the foreclosure process in 2017. That’s more than ten percent of 676,535 foreclosures filed nationally.
We need lawmakers who are serious about protecting consumers of greedy bankers by imposing and keeping significant regulatory measures that keep our economy safe, locking up swindlers who cause chaos that threatens the rest of us, and possibly nationalizing financial institutions that persist in risky behavior and unethical conduct.
Lisa McCormick is a candidate for the Democratic nomination for U.S. Senator from New Jersey, a seat currently held by Robert Menendez. She supports strict banking regulations, Medicare for All and the expansion of free public education from pre-K to a college degree but her priority is rampant corruption, which has rendered American government ineffectual for the vast majority of citizens.
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