The following is taken from "Real Financial Reform" in Jill Stein's 1/25/12 address, Green New Deal for America.

Speaking of investments, the takeover of our economy by big banks and well-connected financiers has destabilized both our democracy and our economy. We do not need and should not tolerate the dictatorship of bankers and financiers who manipulate money without doing productive work and who enrich themselves at the expense of real businesses and real working people. It’s time to take Wall Street out of the driver’s seat and to free the truly productive segments of working America to make this economy work for all of us.

That is why a third priority of the Green New Deal is real financial reform, beginning by breaking up the big banks and retaking our monetary policy from the Federal Reserve Banks. We will reboot and reprogram the financial sector so that everyday Americans no longer need to live in fear of periodic crashes that are not of our making.

The financial reforms of the original New Deal in the 1930s turned a failing unregulated system into a stable regulated system that did not experience a financial crisis for half a century. Then in the 1990s, as the establishment parties cozied up to this deep-pocketed industry, the New Deal protections were tossed aside in a new era of deregulation. This misguided deregulation resulted in ever bigger and more frequent financial crises, including the financial collapse of 2008.

Currently U.S. banks and corporations have huge cash assets that are badly needed for business expansion. Yet lending and investment for business expansion is stagnant. Meanwhile, financial institutions are profiting from speculative trading in stocks, bonds, commodities, currencies, and derivatives. They are rearranging who owns existing productive assets instead of investing to create new productive assets. The rich get richer while the economy stagnates, unemployment persists, and needed investments in infrastructure and production are not being made. The greed, speculation and fraud that crashed the economy continues unabated as we suffer through a recovery for the 1% alone. And it continues to threaten further recovery with backdoor bailouts, and the very real potential to tank the economy again.

There is currently a bipartisan failure in Washington to pursue the vitally needed reforms that this will require. The watered down Dodd–Frank Wall Street Reform did not fix the massive problems with the deregulated financial status quo. Wall Street and the big banking interests continue to steer the economy just as they did before the Great Financial Crash of 2008. Bank assets are actually more concentrated than before the crash. Depository commercial banking, speculative investment banking, and insurance remain intermingled under giant bank holding companies. The financial system is as over-leveraged and vulnerable as ever. Many big banks survive only by hiding their liabilities and avoiding honest bookkeeping. Yet the officers of these bailed-out firms continue to pay themselves record level bonuses and to devise new schemes for skimming profits from Main Street in order to enrich Wall Street.

It’s time to really reform Wall Street so that working America has a chance. Here is what the financial reforms of the Green New Deal will do.

First, the debt overhang holding back the economy must be deleveraged by reducing homeowner and student debt burdens. An immediate halt to all foreclosures and evictions - as called for in the Economic Bill of Rights – will be coupled to the creation of a federal bank with local branches to take over distressed mortgages and either restructure the mortgages to affordable levels, or if the occupants cannot afford a mortgage, rent homes to the occupants. Forgiving student debt will be coupled to tuition-free higher education on the model of the post World War II GI Bill, which has paid for itself more than seven times over in increased government revenues from higher productivity, according to a study by the congressional Joint Economic Committee in the 1980s.

We will democratize monetary policy to bring about public control of the money supply and credit creation. This means we’ll nationalize the private bank-dominated Federal Reserve Banks and place them under a Monetary Authority within the Treasury Department, along the lines proposed in the National Emergency Employment Defense – or NEED - Act of 2011 (HR 2990), sponsored by Representatives Dennis Kucinich and John Conyers. Through the Green New Deal’s financial reforms, the federal government will retake its powers to create money, as granted by the Constitution in Article I, Section 8.

That’s just a beginning. Through the financial reforms of the Green New Deal:

  • We will break up the oversized banks that are “too big to fail.”
  • We will end taxpayer-funded bailouts for banks, insurers, and other financial companies. We’ll use the FDIC resolution process for failed banks to reopen them as public banks where possible after failed loans and underlying assets are auctioned off.
  • We will adequately regulate all financial derivatives and require them to be traded on open exchanges.
  • We will restore the Glass-Steagall separation of depository commercial banks from speculative investment banks.
  • We will establish a 90% tax on bonuses for bailed out bankers.
  • We will support the formation of federal, state, and municipal public-owned banks that function as non-profit utilities.

Under the Green New Deal we will start building a financial system that is open, honest, stable, and serves the real economy rather than the phony economy of high finance.