As I’ve been reporting, the fallout from JPMorgan Chase’s “Fail Whale” trade has returned financial reform to the political agenda. The conventional wisdom previously was that Dodd-Frank would be implemented and the political system wouldn’t have to worry about Wall Street for a few years. The JPMorgan Chase test case, along with the frustration and anger from the public on these issues, particularly on the lack of accountability for criminal actions by bank executives, has made that position untenable.
Indeed, the public has a thirst for a real crackdown on Wall Street. The Progressive Change Campaign Committee, in the 48 hours since it went out with a petition in support of a new Glass-Steagall Act to separate commercial and investment banking received 60,000 signatures, and counting. But it’s not just arcane subjects about permitted practices by financial firms that has animated people. Eric Griego, a Democrat running for the House in New Mexico, released an ad this week with the line “I won’t stop until Wall Street bankers who broke the law go to jail.” The ad starts with the story of Alan and Melinda Witt who lost a good deal of their life savings in the stock market during the 2008 crash, right as they had planned to retire.
In an interview with FDL News, Griego, who is running against who he calls two “corporate Democrats” in a primary on June 5, said that the ad bubbled up organically based on his discussions with constituents from the Albuquerque-based district. “We went out and asked people,” Griego said. “We said, this is an issue I care about, what do you think… people came forward, totally different than the folks I had been fighting for in my legislative career, which were lots of Native Americans, people in high-poverty areas. These were middle-class folks who got taken for a ride, lose more than half of their life savings. This is an issue not just affecting working class folks… and so we asked the question, and overwhelmingly, Democratic voters said yeah, do something about Wall Street. I thought great, that’s a passion of mine.”
Griego says he has worked on financial and consumer protection issues since 2002, when he served on the Albuquerque City Council, working particularly to pass tougher controls on predatory lending and car title loans that carried large interest rates. New Mexico did not have the kind of foreclosure crisis we saw in neighboring states like Arizona and Nevada, but Griego still witnessed the preying on high-poverty, low-financial literacy communities, particularly Native American tribes. He continued this work in the New Mexico state Senate, working to toughen up bills on the financial sector after being elected in 2008. “It’s been a long fight for me on regulating the financial industry,” Griego said.
Indeed, we’ve seen arguably more effective measures at constraining Wall Street at the state and local level. Just this week, city councils in New York and Los Angeles passed responsible banking ordinances, which will give preferential treatment for city contracts to banks that invest in local communities. And we’ve seen a host of anti-blight, anti-foreclosure, and other measures. [cont’d.]
Griego has plans at the federal level, many of them laid out in this op-ed. He wants to see more money and resources appropriated to existing investigations of the banks, including the task force co-chaired by Eric Schneiderman on mortgage securitization practices. “The best way to not get to the bottom of an issue is to under-resource it,” Griego said. “Fifty investigators (the current level) for a problem that involves trillions of dollars, I think that says we’re going to be doing something symbolic.”
More importantly, Griego says he would be an insistent voice on putting Wall Street executives who broke the law in jail. “In my district, we arrest people on minimal drug charges, they spend months in jail,” Griego said. “These guys violated the law, and you can correct me, but not one of them has spent a day in jail.” I didn’t correct him.
“Until we change the culture, until Congress is willing to take that issue on and look at these lapses in responsible conduct, banks are never going to change their behavior,” Griego concluded.
So far the reaction to Griego’s “jail the bankers” ad has been positive, he said. He expects both conservatives and his opponents in the primary, including ConservaDem former Albuquerque Mayor Martin Chavez, to say that the economy takes precedence over a vindictive kind of attack on Wall Street. Griego’s view is that the two issues are inherently connected. “You can talk about jobs all you want. The economy was undermined from these Wall Street practices – a lot of people agree that this was a direct result. If you care about an economy that’s sound and create jobs, not about repackaging mortgages and securities and making money off that dishonesty, then I think it is about jobs. You can exploit people or create a sound economy on sound economic principles.”
Griego describes his opponents and a swath of the Democratic Party as “look-the-other-way Dems,” people who can make noise on certain social or environmental issues, but who would rather not rock the boat on anything impacting corporate America. He sought to draw a contrast. “This has been my whole political life,” he said. “It’s about who’s going to stand up to the most powerful interests.”
The fact that the public so overwhelmingly agrees on these matters presents a challenge to those in whatever party more interested in looking the other way.