Forum Post: Wall Street is the main problem.

I've spent a lot of time around the finance sector and these are some specifics on how we can change Wall Street immediately. It won't fix all out countries problems, but it will fix the casino that takes nearly 40% of corporate profits!!

The Financial Sector has realized its more profitable to build complex financial products that profit themselves rather than perform their former societal role – which is distributing cash for investment in manufacturing, energy, and other areas that create jobs.

http://blogs.alternet.org/speakeasy/2010/05/26/scaling-back-our-bloated-financial-sector/

How to Fix Wall Street, bring Jobs back, and Save America:

1. Reinstate Glass-Steagall Act to make it so FDIC insured deposits are not at risk.
2. Reign in derivatives and toxic compensation that rewards unproductive risk taking and trading
3. Require cash reserves as a percentage of revenues at major banks (beyond Basel iii). Banks pay over 56% of their profits to their bankers, under the false rationale of “retaining talent.” If the banks kept cash TARP would never have had to occur.
4. Banks can “lever-up” up to 35 times. This should be reduced to 15-1 or less. The risk is equivalent to having $1000 and being able to go to a casino with $35,000.
5. Require derivatives to be traded through exchanges and new derivatives to enter exchanges

QUICK WALL STREET Facts:

• Six Investment Banks control 96% of derivatives trading in the United States
• Almost 40% of US corporate profits are in the finance industry in 2011
• Per employee investment banking pay has increased since 2006 to record levels
• Nearly all “high finance” (Private Equity, Hedge Fund, Venture Capital) income is taxed at 15%.
• Warren Buffett pays less percent taxes on his income than his Secretary