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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.
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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.
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Brown should be the leader whom the movement clearly lacks! Not only the top 1% hired lobbyists to get them tax cuts and fight regulations; they used the financial collapse as an excuse to kill American jobs and outsource them to Chindia so they are able to maintain their bonuses or earn even better than before (that's their "free market" system). Now everyone should be afraid to raise taxes on these "job creators" by 3% because they are going to stop hiring workers. But wait - they are already doing this: not hiring "lazy, stupid" Americans. They rather hire "intellignet, hard-working" Chindians for $20 a day, 7 days a week. It's time to outsource the CEO jobs to Chindias because CEOs are "lazy welfare kings" who earn too much and spend their time on golf courses and restaurants, often making bad deals and writing off every breath of air they take as a "business expense". This can save millions of American jobs and cut unnecessary costs
what's more--the low interest rates they were charging the homeowners BENEFITED the homeowner in more ways than one. People generally have a set amount of payment they can afford--if less of it is taken up by interest not only can they get a bigger house if the property appreciates YOU not the bank (if more of your payment was interest) stood to GAIN more. a 20% appreciation of a higher amount of principal would have benefited YOU, not the bank. If people bought at the peak of the market, that was their own bad judgment. Bankers were taking on MORE risk for less reward. Then packaging into securities and selling it to the next idiot who supposedly "wasn't told" how risky it was or was "insuring" it with credit default swaps that weren't backed with reserves..that was the problem. BUT everyone, including those mortgage holders had some responsibility.
so the homeowners who took on mortgages that they KNEW they couldn't really afford were not at fault AT ALL? If anything they should have been charged credit card rates (to balance the losses from other people in their same group), but they weren't. SO the bankers gave them a "chance" they blew it and the bankers are at fault. sad.
BP, Massey Energy, Goldman Sachs, AIG, Toyota, and Johnson & Johnson have all provided
extraordinarily dramatic and shocking examples of big business failure and breakdown in productive function.
Some have argued that these represent "Black Swan Events," but now more such as those in the street with “Occupy Wall Street" are protesting what they consider
serious and major defects and flaws in modern corporate capitalism.
There have been demands for more and better government regulation and it does seem such regulation may be forthcoming, despite Republican efforts to kill government action.
However, please let me suggest that for capitalism to serve the public and
“to work" our future business leaders must be better prepared. We must call on our schools of business and finance to teach and emphasize the importance of social values and responsibility
and the critical role of "captain of industry."
"Captain of industry" was a term originally used in the United Kingdom during the Industrial Revolution describing a business leader whose means of amassing a personal fortune contributes positively to the country in some way. This may have been through increased productivity, expansion of markets, providing MORE JOBS, or acts of philanthropy. This contrasts with robber baron, a term used to describe a business leader using political means to achieve their ends."
We must have business leaders who
are "captains of industry" and whose character. commitment, and
vision extend beyond just maximizing profits!
Such leaders might model a great football coach such as Alabama's own Paul "Bear" Bryant who played to win but also to protect, promote. and develop the INTEGRITY of the game itself.
Please see:
http://youtu.be/tvh6x-XgTmM
"S Pull: I would fire the bank CEOs precisely because your comment has nothing to say about them. "Wall Street is partially responsible" -- would you care to elaborate? Apparently not."
So, Paul Johnson, you think that a few 1000 people need to tell Obama to fire the CEOs? Do you think the administration doesn't know it?
Look up this fact: Who is the highest paid lobbyist for Obama's current campaign? I expect you to post the answer for my question.
I am loling.
"S Puli - Like most koolaid drinking Obama haters, you are purposefully missing the point." I like the challenge. Let's see what Josh Brown does, once I explain this. Amy, I am not a Republican lover or Obama hater. I am a fan of Clinton and some past democratic on most issues, so no democratic hating here either. "The bailout isn't the problem - the problem is the part where the banks didn't hold up their end of the bargain" Let's assume - they haven't imagined that the banks took the bailout money in 2009 promising employment etc.. But, do you think the administration helped the banks only in 2009? The banks didn't live up, alright. Do you mean the administration doesn't continue to help them even TODAY behind our backs? Do you know that SEC settled with Goldman on many counts? Do you know that BAC dumped all their toxic stuff in August 2011 on Fannie Mae and his brother for few cents on the dollar? Every single day, the administration continues to provide liquidity to the same banks. Why does the administration continue to support the banks? "streamlined, reinvested or created jobs - instead, they've given themselves bonuses, thrown ordinary people out of their homes, refused to hire the unemployed and then convinced gullible people like you to tell us all that somehow any misfortune is our own fault." JPM's Dimon is on the Fed's board. How does a private bank CEO who has his own agenda continue to be on the FED? Are you kidding me and you think I am gullible? Amy, of all you may be naive. But, Josh Brown definitely knows the above stuff. Let us see what hustling he will do!
S Puli - Like most koolaid drinking Obama haters, you are purposefully missing the point. The bailout isn't the problem - the problem is the part where the banks didn't hold up their end of the bargain - they haven't streamlined, reinvested or created jobs - instead, they've given themselves bonuses, thrown ordinary people out of their homes, refused to hire the unemployed and then convinced gullible people like you to tell us all that somehow any misfortune is our own fault.
Josh, Would you fire the bank CEOs or would you fire the administration that gave the keys to the printing press?
The administration includes Bush/ Obama, Paulson/ Geithner, and Bernanke.
You aren't daring enough to write or fight against the above people, right?
If you still didn't get it, here is how it works:
The past and current adminstrations spent our trillions on banks. Ofcourse, you would be naive to think the above people didn't get any benefits. I am not talking about chump change. But, now it is time to get reelected. They quite well know that they cannot get reelected under current economic conditions. Somebody must be blamed, right? They hire few 100 people and push their agenda. Why do I say they hired? Watch videos of whom the "Occupy wall street guys" support. They support Obama, democrats...Hahaha that is funny like the Obama and democrats did something good to the country. The few 100 people via our ever stooping media spread the message and us Americans being suckers take the bait. Now, Wall Street is responsible for bad economy, bad employment, bad housing and everything else. Yes, Wall Street is partially responsible. But, who is most responsible? Why don't I see any rallies infront of white House and the Capitol Hill? This doesn't mean automatic victory for Obama, but atleast this provides opportunity for him to pass the buck. And there is Europe to pass the blaming game.
Yeah right, Occupy Wall Street is a people's movement!
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