Let me thank my good friends Representatives Barbara Lee, Jan Schakowsky, Ro Khanna, Mark Takano, and Ilhan Omar for joining me today, and all of the groups that are here with us this afternoon.
Today, we want to discuss an issue that gets very little attention in Congress or the media, but an issue of enormous consequence for the American people. And that is that a handful of people on Wall Street have extraordinary power over the economic and political life of our country.
Today, the six largest banks in America have over $10 trillion in assets equivalent to about 50 percent of our nation’s GDP. They underwrite nearly a third of all mortgages, control about 40 percent of all bank deposits, issue about two-thirds of all credit cards, and hold some 90 percent of all bank derivatives.
These huge banks who finance many corporations determine whether factories stay in America or go abroad. They determine whether workers earn decent wages, whether communities thrive or fail, whether we build affordable housing or luxury condominiums, and whether minority small businesses get the loans they need to grow.
And, in the midst of massive wealth and income inequality, the major CEOs on Wall Street are especially greedy.
Incredibly, the top 25 hedge fund managers in America made an average of $850 million last year. Unbelievably, the combined compensation of these 25 hedge fund managers was nearly double what every kindergarten teacher in America made. How is that for priorities?
But it’s not just the wealth and economic power of Wall Street that should trouble the American people. It is their political power.
Over the past 20 years, the financial sector has spent nearly $14 billion on lobbying and campaign contributions to get the government to do exactly what they want. And that means more tax breaks for corporations and the wealthy and more deregulation.
And when we talk about Wall Street, let us never forget that the business model of Wall Street is fraud.
Over ten years ago, as a result of the greed, recklessness and illegal behavior on Wall Street, our country was plunged into the worst economic crisis since the Great Depression. Millions of Americans lost their jobs, lost their homes, lost their life savings.
Since 2009, Wall Street banks and other large financial institutions have been fined more than $200 billion for their fraud and illegal activity.
And while millions of Americans suffered, Wall Street received the largest taxpayer bailout in the history of the world with no strings attached — $700 billion from the Treasury Department and $16 trillion in virtually zero interest loans from the Federal Reserve.
And today, as a result of that taxpayer support, not only has Wall Street fully recovered from the recession, but they are doing phenomenally well. Last year, financial institutions made a record-breaking $237 billion in profits.
This year, they will make $122 billion alone by charging the American people outrageously high interest rates on credit cards — up 50 percent over the past five years.
With their incredible wealth they were able to dole out over $27 billion in bonuses in 2018–52 percent higher than a decade ago.
Further, on top of all of the greed, bailouts and illegal behavior the top 23 banks in America last year received over $20 billion in tax breaks as a result of the Trump tax plan.
And here is the main point that I want to make this afternoon. As a nation, the time is long overdue for us to get our priorities right.
While Wall Street makes huge profits and its CEOs draw exorbitant compensation packages, over half of Americans are living paycheck to paycheck, nearly 40 million Americans are living in poverty, hundreds of thousands of young people are unable to go to college because they can’t afford it and millions more are struggling with outrageously high levels of student debt, and, unbelievably, life expectancy in the U.S. has gone down for the third year in a row.
Instead of giving Wall Street huge tax breaks, it is time that we made Wall Street pay their fair share of taxes and stop the type of reckless gambling by Wall Street speculators that nearly destroyed the economy over ten years ago.
And that is exactly what our legislation today is all about.
The Inclusive Prosperity Act that we are introducing today accomplishes two very important goals.
First, it will raise up to $2.4 trillion in revenue over the next decade. That is money that we could be using to make public colleges and universities tuition free and substantially reduce student debt.
It is money that we could be using to reduce child poverty, to rebuild our crumbling infrastructure, and to invest in affordable housing, child care, and renewable energy and energy efficiency.
The middle class bailed out Wall Street in 2008. Now, it’s Wall Street’s turn to help rebuild the middle class.
Second, our bill would substantially reduce high-frequency trading by Wall Street speculators by imposing a tax of a fraction of a percent on Wall Street trading in stocks, bonds and derivatives.
Today, Wall Street has invested hundreds of millions of dollars in super-high speed computers that can buy and sell huge quantities of stocks and bonds not in seconds, but in fractions of a second.
This high-speed speculation makes billions of dollars in profits for Wall Street, but makes buying and selling securities much more expensive for the average investor and provides absolutely no benefit to the productive economy.
Let’s be clear. A tax on Wall Street speculation is not a radical idea.
Today, some 40 countries have imposed a financial transactions tax including Britain, Germany, France, Switzerland, South Korea, Hong Kong, and Singapore.
This concept has the support of more than a thousand economists. It has the support of business leaders like Bill Gates and Warren Buffett. It has the support of the former Chairman of the Federal Reserve, Paul Volker, and former banking regulators in both Republican and Democratic administrations.
It is long past time for Congress to rein in the greed and recklessness of Wall Street and build an economy that works for all Americans. And working together, that’s exactly what we are going to do.