Presidential Debates Let Wall Street Off the Hook
Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.
So we’ve managed to get through all three presidential debates.
But although the presidential election is (thankfully) in the home stretch, did we really learn anything new about either President Barack Obama or Gov. Mitt Romney?
And more importantly, what everyone should be asking is why neither candidate refused to acknowledge the 900-pound gorillas in the room. They were there, but they got a cursory glance at best. These issues are glaring and obvious, yet it is as if they did not exist. It is the reason why many voters are still scratching their heads and asking the following questions.
Why isn’t housing the No. 1 domestic economic issue in this campaign?
Both the president and Romney spent exceedingly too much time on the national debt, when our economy starts and ends with housing. For the first time since the Great Depression, the real estate market has not pulled the economy out of recession. Structurally that is huge, because it was in fact the real estate market that caused the recession in the first place.
But more importantly, the recession was caused by greed and a confluence of people falling asleep at the switch. You have the government that has not properly regulated the banks, who have used their cozy relationship with the regulators to grow larger and more powerful as our nation’s leaders stood idly by.
And now you are left with entire industries, including Wall Street, effectively overshadowing the role of government. At times it seems like moral character has been checked at the foot of Wall Street.
Surveys have shown that fraud has become part of the ethos of Wall Street. Bankers have cheated, violated their fiduciary duties, and thus committed, effectively, a type of economic homicide not just on individual investors but homeowners, families, unions, retirement funds, entire nations, and ultimately on our own country.
And our nation’s politicians have allowed this to happen. Yet it seems that there is this collective cloud of amnesia that occurred during the debates, a complete sense of denial.
And as we all know in history, if we do not learn our lessons, those same mistakes will be repeated time and again.
So when I look back at these debates and see that this huge chapter in our economic downfall has been overlooked and effectively dismissed, I am flabbergasted.
Will either candidate break up the banks?
This leads to my next conclusion, which is that the banks themselves have grown to be too big to be regulated, and as a result too big to fail, and too big to jail.
Our country’s ability to function as a constitutional capitalistic democracy is now in jeopardy because we have financial institutions that have repeatedly tried to exert influence over every level of both federal and state government. Even the judicial branch has been targeted.
Where is the (real) moral outrage against Wall Street?
Last but not least is the idea of moral hazard in connection with the bailout. The bailouts disproportionately went to large banks and companies, where they basically knew that should they fail, they would once again get bailed out by the government.
But small businesses and homeowners, the ones who have played by the rules with a far greater regularity, have not been granted the same safety net.
In fact the average homeowner is being forewarned time and again not to strategically default and not to walk away from their moral obligations.
The government has no problem coming after them, all the while handing billions of taxpayer dollars back to Wall Street. Those funds in many cases went to pay bonuses, went to pay for acquisitions, and oh yeah, were used to pay for lobbyists so they could curry even more governmental favors.
It is an immense double standard that neither Obama nor Romney thought worthy of discussion.
We are left with the distinct impression that both campaigns are just too tarred and feathered by these Wall Street banks, through lobbying, campaign contributions, and Super Pacs.
Which leads me to wonder if we are going to be asking the very same questions during the next presidential election.