The world was shocked earlier this month when JPMorgan announced it had lost $2 billion on a "failed hedging strategy." The bank's continued risky financial practices even after new financial regulations were passed have many asking if the regulators and regulations we have governing Wall Street are really tough enough.
Elizabeth Warren, one of Wall Street's toughest critics, joined Rachel Maddow today to talk about JPMorgan's disastrous loss, as well as her challenge to Sen. Scott Brown of Massachusetts. Asked why Brown has become the top recipient of campaign dollars from the financial industry, Warren, a Democrat, didn't mince words. She pointed out that Brown stripped out a provision from the Dodd-Frank financial reform bill that would have levied a $19 billion tax on the banks, ensuring that the same people who broke the economy paid the costs of reforming the financial system.
"He traded that vote for $19 billion in breaks for the biggest Wall Street institutions," explained Warren. "You can put a lot of money into someone's campaign and $19 billion is a heck of a rate of return."
Warren said despite financial reform, the big banks are still calling the shots. "In a sense the banks have continued business as usual," she explained, in reference to the JPMorgan fiasco. "They will decide how much risk they take on. They will continue to take profit off the top and they will continue to leave the risks out there for the American taxpayer while they fight off any regulation off to the side."