Dear Mr.
President, October
1, 2012
This country and the world are
experiencing the aftermath of the recession in 2008. People’s homes are being
foreclosed while they lose their jobs. The United States of America has an
increasing gap between the upper class and the middle class because of tax cuts
and unfair compensations. The system failed due to the corruption on Wall
Street.
Charles Ferguson’s documentary, Inside Job, shows the events leading up
to the financial crisis of 2008. The spark for this inferno began with
deregulation during the Reagan Administration through bills and acts such as
the Garn-St. Germain Act. During regulated periods, there was most likely corruption
still occurring; however, it was not allowed to become a huge commotion that
would impact the economy of the world. With deregulation, finance companies and
banks could become more dishonest with no one to stop them.
The
Clinton Administration continued deregulation with the Gramm-Leach-Bailey Act
and the Commodity Future Modernization Act. The Gramm-Leach-Bailey Act repealed
the Glass-Steagall while the Commodity Future Modernization Act banned
regulation on financial derivatives. Before deregulation, lenders were cautious
about allowing loans to someone. Lenders became less concerned about being paid
back since they could sell the mortgages to investment banks. Investment banks
would combine mortgages with other loans to create collateralized debt
obligation (CDO). Investors would then buy the CDO. If the CDO failed then the
lenders and investment banks would not be responsible.
Corruption
on Wall Street was exposed with Charles Keating in 1989 yet, instead of
increasing regulation, the government begins to deregulate finance. Government
officials appointed to finance offices have Wall Street backgrounds and work to
make Wall Street richer. In 2008, the enormous corruption of banks and other
financial establishments are exposed to the world as companies fail. Stock
markets plummeted and the recession began.
Four
years have passed and it does not seem like much has changed. People are
expecting huge changes. Mr. President, I am not writing to depend instant
change. That is not possible after the huge failure of companies. I am writing
to thank you for being able to lead our nation in a time of crisis. The
recession was not any one person’s fault. The fire was slowly fueled until the
explosion in 2008. I encourage you to continue to search and enact a solution
that will benefit this nation in the best way possible. Thank you for your time
and your efforts.
Sincerely,
Natalie E. Gladden
