Between October 2007 and December 2008, the top 1,000 US pension funds lost $1.75 trillion, or 23.3% of their value, the worst losses in 30 years.
Declining property values and personal income have taken their tolls on state and local budgets, leading to cuts in essential services like public health programs, childhood education, and programs for the elderly and disabled.
3. Back to Greed & Business as Usual. While taxpayers are still suffering, the big banks are back to business as usual, paying out tens of billions in bonuses, making tens of billions in profits on the backs of American consumers, and returning to the same kinds of practices that caused the crisis in the first place.
The nation's top six banks paid out $31.2 billion in 2008 bonuses this past winter, and in the first half of 2009 alone, they set aside another $74.4 billion for bonuses and compensation for their employees.
The top six banks posted $29.6 billion in profits in the first half of 2009, just months after accepting $160 billion in direct TARP infusions. However, as George Soros points out, their "profits" come from the American taxpayer. http://www.reuters.com/article/businessNews/idUSTRE59M5K720091023?feedType=RSS&feedName=businessNews
The banks made these handsome profits by embracing the same kind of excessive risk-taking that caused the crisis in the first place: by trading highly-complex derivatives, by repackaging mortgage-backed securities, and by making predatory loans to low-income, high-risk consumers who typically cannot afford to pay them back.
Rising fees also contributed to the banks' bottom line. Americans will pay more than $38 billion in overdraft fees alone in 2009, more than $125 for every man, woman, and child in the United States.
Banks also raised credit card interest rates on American consumers in an effort to boost their profits before the new credit card reforms take effect next year.
Even as they continue lending to large corporations and private equity firms, the banks have drastically reduced their small business lending. Lending through the SBA's main program decreased 42% over the previous year in the first seven months following the bailout.
4. Banks Standing in the Way of Reform. Despite taking trillions in bailouts, the banks are now using our money to lobby against reforms that would protect us from their abuses. In the nine months following the bailout, companies in the financial, insurance, and real estate sector spent $321 million lobbying against federal reforms such as the creation of the Consumer Financial Protection Agency, limits on bonuses, overdraft fee regulation, credit card reform, loan modification proposals that could help keep millions of Americans in their homes, and a ban on payday lending.
This is not what we signed up for!
It's time for a real economic recovery. As Wall Street celebrates "green shoots' in the economy and points to signs of recovery, its déjà vu. The market was celebrating signs of recovery last year too, just months before the Lehman Brothers collapse.
Meanwhile, Main Street is still hurting. We don't need bankers trying to convince us that happy days are here again. We need real regulatory reform now so that we can have a real economic recovery on Main Street.
A year ago, Lehman Brothers' collapse shook Wall Street to its core and set off an economic crisis that threatened the foundations of the entire global financial system. In the flurry of bank failures and near-failures that followed, household names like Merrill Lynch, Washington Mutual, and Wachovia either disappeared or got swallowed up by competitors. Within a week, there were no more big, independent investment banks on Wall Street.1
As bankers across the country were fighting for their lives, taxpayers threw them a lifeline. We stepped in and bailed out Wall Street to the tune of trillions of dollars because we were told it was necessary to resuscitate the economy. The Treasury Department told us that banks would use taxpayer dollars to modify mortgages to help working families stay in their homes. Treasury also told us that the banks would resume lending to small businesses in order to stem rising unemployment rates and stimulate the economy. But that didn't happen.
One year later, what have the bailouts gotten us? While top bankers are continuing to make billions of dollars in bonuses, none of the promises made to the American people have been honored. Families continue to face rising foreclosures, rising unemployment, higher credit card interest rates, higher overdraft fees, and roadblocks to real financial reform that would protect us from a repeat of the same crisis in the future.
