Richard Trumka/George Nee: Make Wall Street pay for the jobs it destroyed

Thu, 05/13/2010 - 1:44pm

 It has been more than 18 months since the financial sector collapsed, exposing rampant Wall Street abuses, sending jobs into freefall and forcing a massive and unpopular taxpayer bailout.

All told, the Great Recession has cost Rhode Island 34,900 jobs.

That’s a lot of Rhode Island families’ lives turned upside down.

Nationwide, the Wall Street debacle tore an 11 million jobs hole in our economy.

 But unbelievably, after $700 billion in taxpayer bailout dollars, the big banks are back to business as usual. They are still not lending in their communities, and credit remains tight. They are fighting new taxes on financial speculation and excessive bonuses, even after handing out $145 billion in 2009 executive pay and bonuses. And they are pulling out all the stops to resist new financial rules that are so clearly necessary.

At the same time, the 150 largest banks in the U.S have hired a lobbying group to launch an image-improvement campaign — to build trust in the financial industry.

We have a better idea. The big Wall Street banks should begin to earn trust — not through a public-relations campaign but by changing their behavior in two important ways: (1) resuming lending to help credit-starved communities create jobs, and (2) embracing a small tax to curb destabilizing short-term speculation and pay for the jobs they destroyed. A small tax of about half a penny for every dollar on financial transactions such as stock, option and derivative trades would restore balance in the investment world, and it would raise $175 billion to $350 billion a year to invest in American jobs. Major investors such as Warren Buffett have supported the concept of such a tax to reorient the economy toward long-term investments.

And then, following Ronald Reagan’s famous advice (about foreign affairs), we should “Trust, but verify,” by reforming the rules for Wall Street, including creation of an independent consumer agency that will crack down on abuses by big banks and their CEOs and credit-card companies to protect working families and small businesses.

We need jobs in Rhode Island. These proposals would raise the money to invest in the jobs of the future from the big banks that created the current economic crisis and make sure their actions can never bring on financial disaster again.

That’s why the AFL-CIO and our community partners are making three demands of the big Wall Street banks:

• Pay your fair share to restore the jobs you destroyed.

• Stop fighting financial reform.

• Start lending in your communities.

People in Rhode Island who did nothing wrong and want to work have paid for the misdeeds of the big banks with their jobs, homes and retirement savings. Now it’s time for our government to hold Wall Street accountable and make them pay to create the good jobs they destroyed.