OWS under Pressure: Banks Bailed out, People Sold Out

The Occupy Wall Street held a series of rallies around the country on Thursday, in response to the attempt of Mayor Michael Bloomberg to remove their tents and other camping equipment from Zucotti Park. Some 300 were arrested, mostly because they chose to engage in some form of civil disobedience.

One central issue for the protesters is a perception that the big banks have been treated very well by the government but that there has been less done by Washington for ordinary people who have lost the homes and lost their jobs.

The Star-Ledger writes,

“In Los Angeles, more than 500 people, including a large contingent of union members, chanted ‘Banks got bailed out, we got sold out’ as they marched from the city’s Bank of America tower to Wells Fargo Plaza.

Is it a fair chant?

Despite widespread fraud in the banking and financial sectors, President Obama has prosecuted fewer financial crimes than did Reagan or either Bush.

Banks may well get away with massive unlawful foreclosure practices.

This site points out that big banks received bailouts, but that home owners largely did not. (President Obama’s mortgage bailout plan was expected to help only 1 in 9 home owners under pressure).

MSNBC notes that since the beginning of the mortgage crisis in 2007, about six million homes have been foreclosed on by the banks. Another four million homes are now somewhere in the process of being foreclosed on. And new house foreclosures are now in the range of two million a year. A quarter of homeowners in the US owe more on their houses than they are worth.

22 Responses

  1. Remember how the last Crash was about sub-prime mortgage debt being bundled up as AAA rated derivatives. Doesn’t matter if you didn’t understand, just keep that thought in mind

    They are at it again, and they’ve added a twist – Ponzi schemes, that’s what Bernie Madoff is doing 130+ years in prison for!

    Only this time its not sub-prime $200,000 US home mortgages they playing with. Its sovereign debt, sub-prime multi million Euro Zone sovereign bonds! All that yelling by Obama and Geithner at Europe about fixing the euro is to cover there asses, or should I say to protect their Wall St buddies. One large US brokerage has already failed, MF Global, which was run by Jon Corzine – ring a bell, yep, the former governor of New Jersey.

    The US MSM doesn’t want Americans to know about this stuff, because it demonstrates the failure to tighten regulations after Credit Crunch 1 and as Juan wrote the failure of the Obama to prosecute. His administration is riddled with the people responsible for Crash 1 – like Timmy G. The failure to tighten up regulations lies with both the Administration and Congress, on both sides of the aisle.

    If you think why should I care, I’m in America, and this is all about Europe. Well outfits like Goldman Sachs and JP Morgan are in this up to their necks and they’re American as apple-pie and Wall Street, as was MF Global. US institutions needing a bailout will be bailed out by American taxpayers, European taxpayers will bail out their own institutions,

    So Buckle Up Folks, Hunker Down – Here Comes Credit Crunch 2 link to golemxiv.co.uk

    Oh, a couple of Chinese bankers were asked why China wasn’t buying the Euro Sovereign bonds, here’s what they said.

    The president of state-owned fund CIC, Gao Xiqing said . “We are no white knights, we have to save ourselves.”

    The chairman of China Merchants Bank, Ma Weihua said “No smart person invests in these kinds of bonds. We cannot sacrifice our interests to help others.”

    I sometimes refer to the US President as ObamaDontCare, that’s wrong, he’s ObamaDontKnow.

    • I totally agree with Oliver. His comments similar to the ones below by Ray regarding ‘mark to market’ suspension show how the bailout was in fact a rescue for the investor class at the cost to the rest of the economy. The alternative would have been to take the banks into receivership (aka nationalize) via the FDIC to keep their critical functions in tact. The pundits always offer critics a false choice of doing nothing vs giving the banks a pass to proceed as they have done. Bank failures have been managed properly and safely in the pass such as Sweden and others. It’s merely the vested interests cloaked in ideology that has brought us here.

      • Well, someone has to pay for all the (ongoing) malfeasance. Should we expect those in power (the banks) to assume that responsibility when they can foist it off on some other sap? AND, if the current situation presents a good business model, in terms of quarterly profits and bonuses, it will be continued.

        Question is how long this can be continued, all things considered.

  2. The NYT did a similar story a few months ago describing the declining trend in prosecuting financial crimes. The problem with the financial situation is that without real investigations, we’ll never know the role of fraud/lying in the crisis relative to market failures, which makes it all but impossible to make good policy regarding banks moving forward. I think anyone following the debate about what to do, will ultimately agree it’s about picking and choosing new laws based on ideology, rather than looking at the evidence. And with something like financial crimes, it’s something where you really need deep investigation of a bank or corporation’s books, to really know if something is there.

    Without the investigations, you can’t say there was widespread unlawful practices for sure, but knowing that is essential moving forward. Here’s the thing, banks know the declining trend of enforcing laws, so at the margin, you’ll have more people committing financial crimes. It’s stories like this that tell my gut the problem wasn’t “deregulation” per se, but rather lack of will to enforce basic regulations already on the books.

    Your post missed the “best” (read: cynical) reason why Obama didn’t prosecute financial crimes, or at the very least investigate to know to what extent it was a problem. These banks are so important for the economy, that shaking confidence in the markets with prosecutions would have spiraled us into an even deeper recession. While probably true, that stance lack a moral position and ignores the long-term health of our economy.

    • “…that stance lack(s) a moral position and ignores the long-term health of our economy.”

      So true. And the latter looks worse with the European contagion bound to spread. The former “lack” stance is pretty much par for the course for many years but has reached a crescendo during the latest crisis. It’s Protect the Banks!

  3. “One central issue for the protesters is a perception that the big banks have been treated very well by the government but that there has been less done by Washington for ordinary people who have lost the homes and lost their jobs.”

    A valid and legitimate complaint, but I simply cannot comprehend the focus on punishing the beneficiaries of this wrong and not marching against the government which perpetrated the wrong. The banks are not the ones who did it, the banks are not the ones who did to little for us, the government wronged us, and yet we march on the banks.

    Those who are treated well are punished by those who are treated poorly, and the ones who started the fight by doing the deed sit on the sidelines and gloat because they got away with it. They continue to collect taxes from those they treated poorly and graft from those they treated well, and nothing changes.

    Meanwhile the banks were treated well to the tune of $1 trillion one time, while the Pentagon is treated to $1 trillion of taxpayer money every two years continuously, and no one marches on the Pentagon.

    • Diffuse the issue, cloud it by pointing fingers at Also Unindicted Co-Conspirators — since when is that beast called “Congress” responsible, other than in the sense of passing the national kidney stones of screw-the-general-welfare legislation, for what’s transpired? Ever heard of “regulatory capture?” That’s the part where the Kleptocrats who benefit from the activities you would lay at the doorstep of “Congress” send in phalanxes of lobbyists with piles of money, or go themselves with greens fees and checkbooks in hand, carrying briefcases loaded with conveniently pre-drafted “legislative proposals” that, with little change and spurious debate and a flood of “corporate speech” propaganda, cut away, little by lot, at the ol’ Pillars of American Democracy. “Tax reform,” “regulatory reduction and efficiency improvement,” “just a little pork for me and you,” all the BS that the special-pleaders use to activate the mechanisms that confer a fraudulent legitimacy (that is fast shredding into simple grasping tyranny) on the Rule of Law 2.0.

      If I read my Taibbi correctly, and remember past episodes like the S&L thing, the banks have been treated well to trillions of real-wealth dollars more than just that one time, all-hands, bail-IN of the nation’s real wealth. That thing you shorthand as “the Pentagon” is just part of the corporate wealth transfer apparatus. Nailing the category of parasites that hides behind the residue of trust that people still have for those formerly friendly bankers, as with the punchline about “what do you call 5,000 lawyers chained together and drowned on the bottom of the ocean?”, is “a good start.” Deflating the false front of the Pentagram, revealing the reality that the incumbents there neither serve nor protect, but rather mortgage and consume, the nation they feed so greedily off of, would be a nice second course.

    • The government is just bought property, sir. The beneficiaries are not passive or innocent, they’ve been plotting this for decades, lying to get their policies enacted, then raking in the rewards, then plowing them back into their favored candidates for more rewards. Harper’s editor Lewis Lapham witnessed the process:

      link to mindfully.org

      This is what happens to democracy when the rich are so incredibly rich that they can buy both political parties, the Pentagon, the mass media and the churches. Obviously you want to pretend that if we destroy the government the rich will not step into the power vacuum to conspire against and oppress us. I think that has been the end game all along and the new extremist policies of the 2010 election winners are the start of the final phase.

    • Oh, yee defender of banks. Do not thee know that they control the government? Was not Alan Greenspan the head banker? As far as the Pentagon, I would march against it if I was able. In fact I did 30 years ago, in a sense. It was called the Nuclear Freeze Movement.

  4. This whole charade began when Senators and Representatives, spouting the need for greater transparency in Wall Streets financial dealings, then did a ‘180’ and instructed the government to remove ‘mark to market’ as the accounting standard for these banks and financial institutions. In one stroke, largely ignored by the MSM and alternative media, Congress sold oput the American home owner to bail out the Big Banks on a scale far greater than the “Bank Bailout” loan of $800 billion.

    The banks now are able to add to the asset side of their ledgers all mortgages and properties, mostly foreclosed upon, at any valuation that they “deem” fair. Thus the illegal and mad rush to foreclose on American home owners having mortgages to which the banks did not own, but only services. Many of the owners of Mortgage Back
    Assets sold by Wall Street have already been “compensated” for these bad assets/mortgages, again, in most cases by the American taxpayer to the tune of 100 cents on the dollar as in the case of the AIG fiasco. The banks then steal the home from the deed holders to put on their books to “cover” the fact that they are BANKRUPT. The last two administrations and Congress have enabled and participated in this theft and looting of the American public. And the bought and paid “Supreme Court” runs cover for them and participates in the spoils.

  5. This whole charade began when Senators and Representatives, after all their pontificating about the need for greater transparency in Wall Streets financial dealings, did a ‘180’ and instructed the government to remove ‘mark to market’ as the accounting standard for these banks and financial institutions. In one stroke, largely ignored by the MSM and alternative media, Congress sold out the American home owner to bail out the Big Banks on a scale far greater than the “Bank Bailout” loan of $800 billion.

    The banks now are able to add to the asset side of their ledgers all mortgages and properties, mostly foreclosed upon, at any valuation that they “deem” fair. Thus the illegal and mad rush to foreclose on American home owners having mortgages which the banks do not own, but only services. Many of the owners of Mortgage Backed securities/
    Assets sold by Wall Street have already been “compensated” for these bad assets/mortgages, again, in most cases by the American taxpayer to the tune of 100 cents on the dollar as in the case of the AIG fiasco. The banks then steal the home from the deed holders to put on their books to “cover” the fact that they are BANKRUPT. The last two administrations and Congress have enabled and participated in this theft and looting of the American public. And the bought and paid “Supreme Court” runs cover for them and participates in these spoils.

  6. This is the trickle down theory that refuses to die. Banks are often too big to fail; individuals are never too big to fail — unless multi-billionaire captains of industry. Fail as an individual = foreclosure and worse. Fail as a business leader = bailout and golden parachute. Our growth driven economy eats up the world plowing people under foot as it rumbles on.

  7. The OWS movement may not address the problem but it does shine a light on it. It is a pity that Obama’s actions speak much differently than his rhetoric. Where is his community organizer spirit now?

  8. To the idea that the 1%, despite having low tax rates, end up paying a “disproportionate” share of the total American tax burden, I would like to point out this…the “bill” to Americans for protecting the wealth and well-being of the 1% has skyrocketed right along with their profits/wealth. The 99% are then burdened by exploding military and policing budgets to protect this wealth in which they DO NOT SHARE. The wealthy 1% have had their minions in Congress and local governments EXEMPT them from paying their fair share of taxes. The wealthy 1% again use their Republican Congressional mouthpieces to tell you that you should support their exemption from fair taxes because they are the “job producers.” Well, so were the slave-owning plantation owners. Enslavement is the name of the game for these psychopaths.

    • The Occupy movement of the 99% is worldwide and is in my opinion part of the Arab Spring. Two days ago I was proud to carry one end of a soldier’s flag while marching to protest at the FED while he held my peace sign. Police stopped traffic as the unannounced procession proceeded. There is another rally today starting in Denver in a little while and people are bound and determined that the movement remains ongoing.
      Costs shifted to the poor to enable even more power for the elite are more than monetary and the whole system is broken.
      In fact the Earth is set to overheat with loss of ecosystem services in an uncontrolled manner. Order and wealth will perish unless the world can rally and put resources including the full power of industry and world finance to the common good.. Presently I don’t see that happening and even the COP 17 Climate Summit in S Africa in only 2 weeks gets overlooked.
      Protesters need friends in high places who will right the wrongs and help make it possible that a peaceful transition takes place which will enable the talents of the world to be put to good use.. The system is currently overheating and there is no way to marginally change things unless what is known as ‘an act of God’ is applied to contract law worldwide allowing a shift in business principles and world finance which ties value not exclusively to money but to what the Earth provides and which provides in an ongoing way as perhaps viewed 7 generations in the future.

      • The funny thing is, supposedly a recent survey showed that 2/3rds of those in the “1 percent” also agree that growing inequality is a serious problem for our society. Yet we can see that every wing of modern conservatism, the imperialists, the theocrats, the neo-Confederates, the corporate whores and the libertarians, is spouting about an ideal past, ideal because inequality favors “our kind”. And tens of millions love this crap.

        So what is the nature of the relationship between the power elite and the extremists? Possibilities:

        1. the rich mostly don’t understand how their investments multiply; they just pay off a network of banksters, lobbyists and propagandists to make their chosen stocks grow as quickly as possible. Problem is, these henchmen know the way to do that is destroy pollution, financial and labor regulations, ship jobs to the foreign sweatshop du jour, and crank out the CO2. The rich, and the computers that actually run their mutual funds, blindly follow the hottest gainers to our mutual doom.

        2. The extremists need the rich because they need the corporate and military hegemony of America to do many dirty things; they then skim off the rewards to the owners. Dick Cheney may be exhibit 1; he was small fry by the standards of the plutocracy, but as part of the war machine he exploited their fears of the confusing, complicated outside world and waved the flag in their faces. They never bothered to read the insane papers his PNAC was writing, they just wanted to know that their investments would be “protected”. He used his DefSec resume to get the Halliburton gig, then militarized it so it would be the only company that could carry out privatized military services as he had proposed in the ’90s, then got back in the White House in ’00 and carried out that proposal to the benefit of Halliburton shareholders by starting a war. Did any of them read past the dividend report?

        3. Corporations and private companies are not exactly in accordance. The corp execs view themselves as managers of both their firms and America itself; their holdings are so global, their exposure so public, that they want to avoid the really kooky far-right stuff and attendant bad PR. But the multi-generational private owners, while not owning the biggest US firms, have total control over them and don’t give a damn about PR or foreign repercussions; compare Henry Ford’s open Naziism vs. GM’s sneaky deals with the 3rd Reich, or the viciousness of the family-owned “Little Steel” companies in butchering strikers in the late ’30s after corporate Big Steel had already begun to talk, and now the Koch brothers, whose coal-centric energy operations are tiny compared to the oil giants but are willing to pour vast sums into subverting and fanaticizing American democracy just to keep the smokestacks belching.

        Somehow, we of the 99% are going to have to educate ourselves about how to exploit these possible divisions among our owners as a force multiplier in our struggle for economic leverage.

  9. The big banks got away with it all. Riches when tricks worked, bail-outs when they didn’t, and never a whiff of grape (i.e., hint of prosecutions). ALSO no renewal of Glass Steagall.

    As for the people, police round demonstrators up — but not bankers. Police defend ORDER (of a kind) but not LAW.

    “Dum Spiro Spero,” I suppose, he said weakly.

    • Isn’t the idea of effective nonviolent protest to break the law to draw attention to the issue? I don’t get why so many in OWS thought what they did yesterday was supposed to be guaranteed as an expression of free speech. They used force to prevent citizens from working. It was not violent force, but force nonetheless. That doesn’t make it immoral, but it does make it illegal.

  10. Excellent post, but reality is even worse than you describe it in a fundamental way: you are comparing punishment of institutions (banks) with individuals. The banks have at least paid a few fines, albeit ones that imposed no hardship whatsoever on those rich institutions. But if one compares the treatment of individuals kicked out of their houses, often not just unsympathetically but fraudulently (e.g., based on fake bank paperwork) with treatment of bank officials (not even brought to trial for alleged fraud), then one can see the real contrast: the super-rich have a “get out of jail free” card courtesy of Washington regardless of the severity of crimes committed, while anyone from the 99% who engages in democratic action faces police brutality, hospitalization, and jail time even if they break no law.

  11. More of the same comments and disclosures of corruption. Verbal eloquence with intelligence, knowledge and skill leading where? Nowhere. The status quo. A Depression?

    Here’s an urgent timely, potent change.

    Force Obama to use Presidential executive orders to change election laws and processes to end the strangle hold that the corrupt Republican and Democratic Parties have on elections.

    The changes will guarantee that the 2012 Presidential ballot & all elections have multiple parties and candidates in addition to those of the Republican & Democratic parties.

    The Republican and Democratic parties have failed Americans especially in the last decade in all areas: employment, finance, mortgages, safety, education, food, health…..

    These urgent needed elections changes can and would be acknowledged, brought alive, ignited and accomplished by the combined effort of the 98% of angry or discouraged Americans, the Occupy Wall Street movement, by word of mouth, and by honest blog sites like Juan Cole’s Informed Comments, Josh Marshall’s TPM(Talking Points Memo), The Nation, DailyKos, Kevin Drum’s Mother Jones, Salon.com, etceteras.

    Come on wake up! It’s late, but not too late for many.
    And we can then help those that have lost their homes, jobs, their life’s savings and their belief in America.

    • J.A.S., you’re assuming that the “O” might engage the powers of the office to serve the people of the country? Do you honestly believe that he might do so? You have to remember that he grew up in a wealthy family, that he went to Harvard, flim flamed his way to become P.O.T.U.S., and the rest is history. Oh yes, he also became the 1st, probably the last too, so, why should he carry out what you suggest?

  12. It’s a little late and maybe slightly off topic and really relates to the post on how conveniently similar the “crackdowns” (“smackdowns?”) of the Occupy activities across the country were, and Professor Cole, I know your “Where is your proof, poor scholarship” critics will never be so gracious as to apologize, but gee whiz, it’s sure starting to look like yes, indeedy, the city governments that have been beating and spraying and corralling and otherwise abusing Occupy citizens were indeed working under “suggestion,” dare one say “direction,” from a central voice, an NGO (CREEP and PNAC and the John Birch Society are in that same category) called the Police Executive Research Forum, which, surprise! is very closely tied to the monster called the Department of Homeland Security, a simply wonderful euphemism.

    Here’s a link to a bunch of links, for you pseudo-academics who get all exercised about “no facts” as a way to try to sow doubt and stifle discussion:

    link to dailykos.com

    Look it up for yourselves. What a surprise that there really seems pretty clearly to be a there, there. And gee, I hope you people are all okay with the end-of-Empire destruction of all that stuff we are supposed to value, our “rights,” our putative “freedom” and “liberty” that maybe a pinhead’s worth of us could even take a literate stab at defining, in the pursuit of whatever idiot’s dream of hegemony and consumption you favor as personally best for yourselves…

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