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Dear Wall Street, this is why the people are angry

'Occupy Wall Street' demonstrators occupy a park near Wall Street in New York, October 3, 2011.

Tess Vigeland: Inequity is arguably the main rallying cry of the Occupy movement. And on that score, the primary bogeymen are the nation's bankers, brokers and traders -- the so-called "one-percenters" who control about a third of the country's wealth. Commentator Josh Brown is one of those one-percenters. He's an investment adviser at Fusion Analytics in Manhattan. If you think you know what his take on all this is going to be, here's his open letter to the banks that don't seem to get why people are mad.


Josh Brown: In 2008, the American people were told that if they didn't bail out the banks, their way of life would never be the same. In no uncertain terms, our leaders told us anything short of saving these insolvent banks would result in a depression to the American public. We had to do it!

At our darkest hour, we gave these banks every single thing they asked for. We allowed investment banks to borrow money at zero percent interest rate, directly from the Fed. We gave them taxpayer cash right onto their balance sheets. We allowed them to suspend account rules and pretend that the toxic sludge they were carrying was worth 100 cents on the dollar. Anything to stave off insolvency. We left thousands of executives in place at these firms. Nobody went to jail, not a single perp walk. I can't even think of a single example of someone being fired. People resigned with full benefits and pensions, as though it were a job well done. The American taxpayer kicked in over a trillion dollars to help make all of this happen.

But the banks didn't hold up their end of the bargain. The banks didn't seize this opportunity, this second chance to re-enter society as a constructive agent of commerce. Instead, they went back to business as usual. With $20 billion in bonuses paid during 2009. Another $20 billion in bonuses paid in 2010. And they did this with the profits they earned from zero percent interest rates that actually acted as a tax on the rest of the economy.

Instead of coming back and working with this economy to get back on its feet, they hired lobbyists by the dozen to fight tooth and nail against any efforts whatsoever to bring common sense regulation to the financial industry. Instead of coming back and working with the people, they hired an army of robosigners to process millions of foreclosures. In many cases, without even having the proper paperwork to evict the homeowners. Instead, the banks announced layoffs in the tens of thousands, so that executives at the top of the pile could maintain their outrageous levels of compensation.

We bailed out Wall Street to avoid Depression, but three years later, millions of Americans are in a living hell. This is why they're enraged, this why they're assembling, this is why they hate you. Why for the first time in 50 years, the people are coming out in the streets and they're saying, "Enough."


Vigeland: Josh Brown. He wrote a scathing blog post along these same lines earlier this week. You can also follow him on Twitter @reformedbroker. While you're at it -- follow me @radiotess.

About the author

Josh Brown is a New York City-based financial adviser at Fusion Analytics.
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Solution t0 return to the black, quit giving the wealthy & corporations tax breaks/welfare checks to help them move out. Charge them to bring their goods back into the USA. Stop giving the wealthy land owners a yearly check for not farming their UN-FARM-ABLE LAND. Put the regulations back where they belong, on Walstreet, electricity, heating fuel, gasoline & comunications. Without a middle class tax base and help from the upper class the USA can not return to it's past greatness. hankk, MI

The problem with today started 32 years ago, that is when the first de-regulations came in and the first tax breaks/welfare for the wealthy & corporations came and the jobs started leaving the USA. That is when the unions started taking the blame and the drive to eliminate them begain. The tax breaks/welfare became a yearly thing of the GOP as well as de-regulation did, and more jobs left the USA. De-regulation caused the demize of the SNL's which we the only tax payers left had to bail out, then the 1000 points of light made us the biggest minimum wage part time service job Nation in the world, and that led to the demize of the middle class tax base, and the beginning of congress borrowing money from Social Security & Medicare to pay the bills, and when that was gone they borrowed from other countries to pay the bills. More tax/welfare for the wealthy&corporations and the rest of the de-regulation took place and we had 2 useless wars and the wealthy that now could do anything that they wanted to do, and the greed of this combination gave us the GREAT RECESSION. This path can be followed very easy if you care to know the truth about what happened. The only way to fix this mess is to put regulations back where FDR put them in1933, when congress and he agreed that the things that were needed to run a house hold and family were Banking/walstreet, electricity, heating fuel, telephone, and gasoline and they had to be regulated. Those regulations brought us the first middle class ever in the USA and they made the USA the richest and strongest nation in the world. the de-regulation of those 5 items led to the down fall of our nation. We all agree with FDR when he said that Capitalism is the best tool in the world, but it can not work with out regulation, greed will always take control and the USA will find itself right back in 1929, and it has. hankk,MI

Minimum wage is about $9 in most places. I'm more concerned about healthcare worker greed, teacher greed, cop greed, fighfighter greed, engineer greed, and most government "workers" who claim that they are "working class" Americans when in reality their salaries and hourly wages are doing far more damage to the economy and the future than any corporation providing actually demanded goods and services. Sidenote: I love large companies and corporations. Everytime I've worked for some "Small" business or "Entrepeneur," they penny-pinch to the point of ridiculousness with no remorse. Every big company I've worked for, there isn't some big fuss over giving raises and performance bonuses like there is with the "little guy" who can afford to pay more but pockets it or spends it on his wife, girlfriend, or kids instead. It is when a city, county, state, or country legitamately can't afford it anymore that the true greed of the recepients becomes crystal clear. They just don't want to pay their "fair share," whatever that is supposed to be.

I think everyone is missing a broader problem with the current capitalism system. Corporations in general have become too powerful, both politically and economically. Who was the Einstein that decided corporations are citizens with the same free speech rights as actual living, breathing individuals? Publicly traded corporations should NOT be allowed to use piles of investor money to pay lobbyists to drown out the voices of real people; lobbying against the best interests of real people. Corporate leaders don't represent the political views of their individual investors!

Corporate influence has inserted itself in every aspect of politics; health care, education, environment, trade policy, energy policy, military policy, you name it!

I submit that the first thing the Occupiers AND the Tea partiers should do is put forth a constitutional amendment denying corporations the political free speech rights of being a 'person' in the political sense. Then maybe we could get some limitations on corporate funding and influence over political campaigns with real teeth!

When politicians have to go back to raising campaign funds from individual citizens, and corporations can no longer fund their self serving, lieing ad campaigns, then maybe the politicians will be forced to listen to their constituents back home!

I think it's time to shake up the whole set up.

We need an alternative to what I call "Market Force Determinism", the nearly theological belief that markets are inherently self regulating, which I consider to be the root of our problems.

We need a whole new cadre of economist-priests to establish this new, protestant 'religion', and stand up to the present economic clergy.

We need to define 'democracy', 'free speech' and 'liberty' as things other than commodities that are available only in proportion to one's means.

And we need to ditch the present 'two party' system (which is only twice as good as what they have in China) and replace it with Instant Runoff Voting, so we can have some real options at the ballot box, other than the present devil's dilemma, where you can either vote for the person who betrayed you, or vote for the person who will rob you even more.

The financial crisis was a failure of regulation, but even worse, it evidenced a lack of integrity from the homeowner who took out the loan he could not afford, the mortgage broker who issued the lown the borrower could not afford, the bank that sold it knowing it was a bad loan, and the investors who bundled it and passed it on. That is how many bad actors this Greek tragedy required. One group of actors, e.g., investors, having a modicum of integrity would have stopped this from turning into the worse financial crisis since the great depression.

People, businesses, and politicians, in the US, are operating negligibly better than the corrupt despots in some third world country. That is the real tragedy...we have lost our basic values. And, the higher it goes, the worst it gets. I have observed that the less integrity and values a person has, the higher they seem to rise in our system. From highschool, watching kids cheat on test getting into ivy league schools, to business, watching cronism and nepotism advance the careers of so many. Meritocracy in the US has become a joke. And, where there is no merit, the right people are not in the right place to do the right thing. Hence, we have been left with the current makeup.

China is not the one taking the US down. Americans are fairly adroit at doing that all by themselves, often doing so in pursuit of their self-interest which yields to no other interest. Cheers!

If we're looking for blame, look no further than Washington D.C. The stimulus packages advanced by both the Democrats and the establishment Republicans were approved over the objections of the public. The marchers should be at the White House and Capitol.

And now Obama wants more of the same. Go figure.

Free enterprise means that we, the wage earners, , "vote" in our own self-interest by deciding where our money will be spent. Obama, on the other hand, wants to take our "vote" away from us by claiming more of our earnings and making our economic decisions for us.

The marchers need to go to Washington. The politicians are the ones who are funneling public tax dollars to their buddies. That's where the corruption is. Solyndra, anyone?

@R Harman:

The car companies received bailouts, but with a catch: develop a working plan to fix yourselves or face bankruptcy. They failed to provide it so they were pushed to file Chapter 11. Still early to tell but, so far, they are actually making profits they haven't seen in years (aka: ANY profit).

Btw, hard to blame unions for their fall when Ford ended up not needing a bailout. The company was smart enough to work with the union (unlike Ohio) and the union was smart enough to follow through with cuts (unlike Cali).

Most of the bank bailouts, meanwhile, came with no strings attached. Obama at least put a few strings to the later payouts, but note that folks like AIG already received their funds by then. Imagine if we applied the car bailout logic to the banks: here's the cash, but straiten up or we break you up.

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