The Insurance Industry Pays Incentives Like a Mercedes-Benz Lease to Push Annuity Sales
Increasingly it feels to Americans that the bulk of the news about scams to separate them from their life savings is coming from one Senator from Massachusetts — Elizabeth Warren.
Ripoffs in financial services, insurance, and real estate – known as F.I.R.E. on Wall Street – are being exposed by Warren, typically in bold pronouncements in Senate Banking hearings where Warren has a chair and a respected voice, and are rapidly amplified in the media.
In 2013, it was only because of Senator Warren that we learned that the so-called Independent Foreclosure Reviews to settle the claims of 4 million homeowners who had been illegally foreclosed on by the bailed out Wall Street banks were a sham. The “independent” consultants were hired by the banks, paid by the banks, and the banks themselves were allowed to determine the number of victims.
It was Senator Warren who put the high frequency trading scam described in the Michael Lewis book, “Flash Boys,” into layman’s language the American people could understand. Speaking at a Senate hearing on June 18 of last year, Warren said:
“High frequency trading reminds me a little of the scam in Office Space. You know, you take just a little bit of money from every trade in the hope that no one will complain. But taking a little bit of money from zillions of trades adds up to billions of dollars in profits for these high frequency traders and billions of dollars in losses for our retirement funds and our mutual funds and everybody else in the market place. It also means a tilt in the playing field for those who don’t have the information or have the access to the speed or big enough to play in this game.”
In 2013, Warren, together with Senators John McCain, Maria Cantwell and Angus King, introduced the “21st Century Glass-Steagall Act.” Warren explained why the legislation is critically needed:
“By separating traditional depository banks from riskier financial institutions,” said Warren, “the 1933 version of Glass-Steagall laid the groundwork for half a century of financial stability. During that time, we built a robust and thriving middle class. But throughout the 1980’s and 1990’s, Congress and regulators chipped away at Glass-Steagall’s protections, encouraging growth of the megabanks and a sharp increase in systemic risk. They finally finished the task in 1999 with the passage of the Gramm-Leach-Bliley Act, which eliminated Glass-Steagall’s protections altogether.”
Nine years later, the financial system crashed, leaving the economy in the worst condition since the Great Depression.