How You Can Start and Operate a Soup Kitchen

Mission Possible: How You Can Start and Operate a Soup Kitchen

Turn up the heat on financial sector profiteers

Recently, Warren Buffett, legendary chairman and CEO of Berkshire Hathaway Inc., said in an interview on CNBC that Sen. Elizabeth Warren (D-Mass.) "would be better if she was less angry and demonized less. I believe in 'hate the sin but love the sinner."

While I generally agree with the Wizard of Omaha's commonsense insights about the world of business, the approach he is suggesting that Warren take with regard to the financial sector is too little and too late.

If the financial establishment had gotten the message that its reckless behavior that triggered the Great Recession had to end and it was prepared to mend its ways, then Buffett's admonition regarding overheated rhetoric would have merit, but that's not what happened.

Instead, Wall Street took no blame, showed no remorse and still contends it did nothing wrong. It has used its army of 2,500 lobbyists to attempt to thwart the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Wall Street firms, banks and credit card companies have opposed the new rules relating to derivatives and higher capital requirements, but most of all they opposed the consumer protection oversight responsibilities of the newly created Consumer Financial Protection Bureau conceived by Warren. The CFPB seeks to protect us against the excesses of the financial banking and credit card systems.

Had there been no sinners at the big banks, there would be no need for an aggressive consumer financial watchdog agency. According to Warren, deregulation produced "Wild West" conditions that allowed banks to "operate like drunks on a wild weekend in Vegas." They could sell almost any product they wanted at whatever rate they wanted with very poorly defined penalties in place.

We can love the opportunity-generating potential of the American free enterprise system and recognize that without rules, enforcement and oversight, people sin. Even those who worship markets, such as former Fed Chairman Alan Greenspan, had to admit that self-regulation of the financial sector resulted in systemic sinning.

Sen. Warren has been dogged in decrying the excesses of America's financial oligarchy at the expense of the middle class. As a result, she has made lots of enemies on Wall Street and in corporate boards, which have referred to her as "a showboater who didn't really know what she was talking about."

Warren is telling the truth. As New York Democratic Rep. Carolyn Maloney has said, "She understands the information as well as the top players in the business."
What Warren understands is that Wall Street, its enablers and water carriers on both sides of the political aisle, reinforced by the Citizens United decision, have enormous power, which they will not give up without a struggle. Our current economic, social and political system works extremely well for America's financial oligarchy. As a result, it will thwart efforts to change the current arrangement

Although New Jersey is the nation's fourth-richest state, with a per capita personal income of $55,385, we have struggled to rebound from the recession. A report by the New Jersey Poverty Research Institute found that income inequality in our state has continued to rise since the end of the recession: "While the top twenty percent of households have increased their income share in the post-recessionary period as well as recouping some of the income lost during the recession, the income share of the bottom eighty percent has decreased. As a result, in 2013 the gap between the top fifth of the households and the remaining four-fifths was at its largest since the end of the recession in 2009."

What is needed is an effort reminiscent of what occurred at the end of the Gilded Age, when progressive muckrakers used confrontational tactics to expose the evils of business monopolies and the manipulation of trusts while fighting for better wages, workplace conditions and a safety net. Economists Thomas Piketty and Paul Krugman have pointed out that we are currently in the throes of a second Gilded Age, and the ever-widening wealth stratification and loss of upward mobility is largely attributable to greed resulting from unfettered capitalism.

The financial super elites are entrenched. It will require a pugnacious leader with both the tenacity and the ability to give the passionate cri de coeur on behalf of the struggling middle class. This cannot be done without ascribing blame to those who have been greedy and profited inordinately from rigging the rules and fostering deregulation. The sinners will need to be identified and the heat turned up on them.

Fundamental changes need to be made in the way the basic institutions in the capitalistic system are functioning. Reducing inequality will not come about simply by providing better oversight. Leveling the playing field will require a roster of solutions, including higher taxes on those in the top 5 percent of earners, more support for preschool education, community colleges and skill building, and a reconfigured role for labor unions that reflects the new global economy. For too long, the decks in Washington have been stacked against Main Street. There needs to be radical realignment to make the operation of financial capitalism more equitable.

This will require some 21st-century muckraking to end the second Gilded Age that, if allowed to go unchecked, will continue to divide and ultimately eviscerate the American dream.