How Wall Street is Destroying America

The first real stock market investing began with investors funding European trade ships to Asia. Trade ships sought investors to offset the risk of a failed trip, and in return the investors would receive a share of the profits. The East India companies formalized the process by issuing stocks that paid dividends on all the voyages the company made instead of on individual trips by specific ships. These stocks were issued on paper, which allowed investors to exchange them for the first time. Stocks simply allow investors to share in the risks and potential profits of the company in which they are investing. These financial activities affect only the people and companies involved in the transaction. The problem with our financial system is when organizations that had become extremely wealthy trading stocks began to develop new ways to make money through financial transactions.

In the wake of the Great Depression, investment banks (large financial institutions that specialize in raising capital for the purpose of investment) were legally separated from commercial banks (regular savings and loan banks) in an effort to protect Americans. This law, called The Glass-Steagall Act, was repealed in 1999 after over 65 years of pressure from the financial elites. This allowed the wealthy investment banks to acquire our nation’s commercial banks, putting the savings and debts of individual Americans in the hands of investment banks to use as they saw fit. Even this might not have led to disaster, if the investment banks had not then directed their commercial banks to intentionally issue bad loans that they knew people would not be able to pay back, and then placed bets on the failure of the loans.

In this way, Wall Street made vast sums of money while intentionally causing the financial crisis that ruined the livelihoods of so many hard working Americans. They issued loans that they wanted their customers to default on, and made millions by betting that the loans would not be paid back. While people across the country lost their homes and saw their nest eggs dwindle to nothing, Wall Street bankers patted each other on the back and paid themselves bonuses. This was not simply “predatory,” but it was a deliberate and organized assault on the working and middle classes. Wall Street cannot be allowed to continue its attempts at class warfare, but our current political leadership has no interest in stopping them. We need a President that will protect Main Street, not throw us under the bus to make Wall Street millionaires a few more dollars.

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