Letter to President Obama

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 The Gramm-Leach-Bailey Act repealed the Glass-Steagall while the Commodity Future Modernization Act banned regulation on financial derivatives.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