The AFL-CIO and its new president, Richard Trumka, are going to spend a day on Wall Street at the end of this month. Trumka, along with 10,000 trade unionists and their supporters, are expected to gather in Lower Manhattan where the wheels of the financial industry turn.
As you might guess, this isn’t a sightseeing trip. Labor visits Wall Street in a bullish mood. It is demanding more than cosmetic changes dressed up as real reform. Don’t expect President Trumka to ring the bell that begins the Stock Exchange trading day, but it is likely he will wring a few necks, in a figurative sense.
Not everyone on Wall Street is planning to welcome its visitors. Kathryn S. Wylde, president and CEO of the Partnership for New York City, for example, said that labor’s action and economic plan are “unfortunate.” She went on to say, “This is a time when Americans should be pulling together … Demonizing Wall Street diminishes us in the eyes of the world.”
Hello! Wall Street, in case you don’t know, Ms. Wylde, “demonized” and “diminished” itself “in the eyes of the world.” There is nothing that Trumka can say that will do further damage to the Street’s reputation. It has already been done and it was self-inflicted.
Furthermore, in insisting that “Americans should be pulling together,” she badly misreads the public mood. Ordinary people could care less about making nice to the engineers of this massive crisis that has left millions without jobs, homes and income. What Americans are demanding is that these financial schemers and firms be held accountable for their misdeeds of the past and be regulated in the future.
The financial manipulators should be glad that that is all that is on the people’s agenda so far. They are lucky to retain their parasitic wealth, remain in charge of our financial institutions, and escape jail time for grand larceny on a scale that is unprecedented. Next time they won’t be so fortunate.
Be that as it may, the immediate point of contention is financial regulation – will it be light or tough?
Should hedge and private equity funds be regulated? Should the derivative market be tightly policed and transparent? Should capital requirements be increased to cut down exposure to risk? Should taxpayers’ money bail out mega-banks and their shareholders and bondholders? Should the oversight power of the Federal Reserve be expanded? Should a consumer financial protection agency be independent? Should the ratings agencies be overhauled?
Not surprisingly, the financial institutions prefer light regulation, while the coalition opposing Wall Street, while not completely of one mind, favors stronger regulation.
In a larger sense, from the standpoint of the top layers of financial institutions – Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – the current legislative struggle over financial regulation is but one battle, although a crucial one, in an ongoing struggle to fully restore themselves to the preeminent position in the global economy that they occupied for the past three decades.
They like being captain of the ship, and the logic of the capitalism (its unending and competitive chase for more and more profits) pressures them in this direction too. After sitting at the pinnacle of power, seeing their wealth exponentially multiply, and shaping the dynamics and contours of the world economy, they are not about to yield, or even slightly lessen, their power and privileged position without a fight.
Call the financial czars whatever you like, but they are well aware of their class interests. What is more, they are mindful of the fact that the New Deal regulations hemmed them in for roughly four decades. Admittedly none of these fat cats starved, but during that period they did not enjoy the nearly unchallenged political and economic sway that they were able to grab in the Reagan-Clinton-Bush era.
Thus the stakes are high. Whatever the outcome of the legislative fight over financial reform, the struggle to curb and eventually eliminate the power of finance capital will go on, and its outcome will have a major impact on the politics and economics of our nation. If finance capital has its way, the prospects of working people are bleak – not to mention the probability of another deep crisis increases. If, on the other hand, the power of finance capital is progressively curbed in the course of successive and contentious struggles, the future of the multi-racial working class and its allies is far brighter.