America's financial services industry has become a favorite punching bag on the campaign trail, on Capitol Hill, in the administration, and from politicians on the left and right. It seems like banks and other financial institutions have been blamed for everything from income inequality to the common cold. If we're to believe some of the rhetoric, our capital markets are little more than a system of tricks and traps. Banks and financial services providers are often, and unfairly, cast as bad actors that need to be shut down, broken up, or regulated into submission.
But the truth is that our financial services industry isn't a problem to be solved, limited, and controlled—it's a key ingredient to boosting the economy. If we foster strong capital markets, we can accelerate growth, create jobs, and spur investment. We can ensure that Main Street businesses have the capital and credit they need to operate and grow. We can provide the financing consumers need to buy cars, homes, and education, while planning for their long-term financial security. Capital fuels our economic engine—and that engine will continue to sputter if we cut off the supply.
Unfortunately, lawmakers and regulators have not considered growth a primary goal when regulating our capital markets. The last eight years of restrictive, punitive, and overlapping regulations have undermined our system's ability to drive a growing economy and a rising standard of living. That's one of the primary reasons we're stuck with 2 percent growth, have the lowest worker participation rate ever recorded, and have less than half the number of public companies that we did in 1996.
To get back on track, we must adopt a modern regulatory system that allows reasonable risk taking; protects consumers while preserving consumer choice; fosters diversity of institutions, products, and services; promotes capital formation; and enables innovation. With smart reforms, we can take steps to achieve that system.
However, we must reject the wrong-headed proposals being put forward by Wall Street critics. They will trap us in this anemic economy, strangle Main Street businesses, and destroy our ability to finance America's economic growth. And we must push back against the assault on our financial services industry—it is far from perfect, but much of today's rhetoric is ill-informed or just plain wrong.
When politicians and others attack our capital markets, they are really attacking the very foundation on which a growing and prosperous economy is built. Let's work together to strengthen it, not tear it down.