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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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@nicbarbara - Nov 15, 2011
...is right on the money!

@Dakarian - Nov 13, 2011
<< Imagine if we applied the car bailout logic to the banks: here's the cash, but straighten up or we break you up. >>

Exactly! Why did the financial industry get a free check? How and why are they immune to public scrutiny when it was with the public money that essentially bailed them out. I bet a handful powerful-but-more-or-less-corrupt individuals were involved in some of the key decisions who made sure that no questions were asked later and no conditions were laid out later for the financial industry bail out. Why? So that this could be repeated? In this context, the words such as, democratic government, capitalism /socialism, Wall St. /Main St., politicians /CEOs, to name a few, are so meaningless. Not sure why the powers-that-be fail to prosecute the folks who have no sense of morality and caused tremndous pain and suffering to the common people to achieve profits at any cost. This is appalling, annoying and abominable. Justice must be served, however blind. Lets start with SEC, a government entity and then move on to the private sector. I suppose that would never happen in the real world at least not in this current system. I only hope it doesn't need a violent revolution.

"In 2008, the American people were told that if they didn't bail out the banks, there way of life..." It should be "their" NOT "there". Please fix it so I can post this story on my page. THANKS!

$40 billion in bonuses could buy a lot of cupcakes at a PTA bake sale. Oh- also, @ Greg L - people are herding themselves into Occupy camps - better approach than letting the government round us up.

Except the car companies paid back their loans and are profitable again... Oops.

Oops! You all forgot GM and Chrysler or should we say the UAW. They were bailed out because the unions killed them None of these protestore are at the UAW headquarters. They should be in front of the White House. This adminstration sits back and laugh at the little people while they go to Spain on vacation and golf every day. Give me a break.

I could not agree more. I am not against capitalism, but I do expect those that risk and fail pay the consequences of their actions without taxpayer assistance and if any institution is so big that it's failure would jeopardize the entire economy of a nation then it just plain shouldn't be able to exist. It appears that capitalist bankers are all for a free market until it applies to them. Spot-On Josh!

Doesn't this remind you of Charlie Brown in "Peanuts" where Lucy keeps suckering him in to kick the football which she keeps pulling away so he falls every time?
We never learn - no matter what you do for the ungrateful, greedy, selfish types (which certainly defines bankers), they never change their behavior.
Thus I nominate Lucy and her football as the official mascots of Occupy Wall ST.

This isn't about Obama! Its about the government & banks ripping off the taxpayers & we're not gonna' take this type of incompetent, aggregious behavior anymore! Stand up for our rights!!!

We cannot have capitalism on the way up and socialism on the way down. Just like FDIC insures the deposits via a tax on the banks / credit unions, we should initiate a tax on any financial institution. We haven't fixed the root cause of the spectacular failure in '08. I cannot fix every problem anticipated in future. What I would like to see from the regulators is that if there is another spectacular failure in future, the tax payers shouldn't be on the hook for anything.

I don't want to regulate pay, bonuses or benefits. That's up to the banks.

I do want a very clear simple regulation on how to wind down the next BEAR STEARNS. Without the FED or Treasury Secretary coordinating the match making at a huge expense to every taxpayer.

Jeez, Josh, you'll get yourself fired by publishing articles like that. You'll get blacklisted from your field. Remember who still has the power.

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