The inevitable consequence of letting big banks run wild is nothing less than the extinction of the American middle class. "Unthinkable,” Elizabeth Warren writes—but a real and dire possibility. Warren, chair of the Congressional Oversight Panel on the bailouts, has seen the numbers, and they aren't pretty. At midcentury, middle-class families could weather busts because the booms were so big. In the 1960s, income went up 33%. In the early 2000s, that number was 1.6%.
As costs rise—health care and mortgage spending are both up 100% in the last generation—even cutting back can’t help. And “while the middle class has been caught in an economic vise,” Warren writes for the Huffington Post, “the financial industry that was supposed to serve them has prospered at their expense.” It may be too little too late, but the proposed Consumer Financial Protection Agency, which would listen to Main Street and not Wall Street, could be just what we need—if banks, lobbyists, and beholden lawmakers don’t kill it "before it’s born.”