There are a lot of differences between the Occupy Wall Street crowd and the Tea Party Movement. One is a national, grassroots effort that is focused on promoting free-market capitalism, limited government, lower taxes and constitutional freedoms. The other is a limited phenomenon of mischief and mayhem insisting that America should stand for equal outcomes, hand-outs and income distribution. One has been the driving force for wholesale change in the American political dynamic over the last two years. The other is an artificial creation of left-wing activist groups, disgruntled wannabe hippies, and labor unions.
However, there is an area where these two very different groups of Americans happen to agree, at least in principle. One would think that such a rare convergence of public opinion would be a clarion call for politicians to act decisively. Both groups direct a great deal of their ire at the practices of the big banks.
Yes, big banks are a big part of capitalism. Certainly there is nothing wrong with making a profit, but what the big banks are doing on the backs of the taxpayer is not capitalism. It's a Frankenstein's monster-version of capitalism masquerading as free enterprise. When the banks and their willing accomplices in government get together, the taxpayer is on the hook and the economy teeters on the brink of disaster.
The Occupy Wall Street folks seem to be against anyone making a profit. The Tea Party believes institutions can and should take the risks and make a profit. That's America. Rigging the system to use taxpayers as a backstop to the banking industry isn't free enterprise. It's crony capitalism -- and it's the subject of the books Too Big To Fail; Reckless Endangerment; The Big Short; and its follow-on, Boomerang.
To this day Goldman Sachs, JP Morgan Chase and other banks borrow billions from the government through no-interest loans, then loan the money back to the government at interest. Banks then turn around and charge taxpayers 4-5% as mortgage owners and 20-25% interest as credit card customers -- so that we can use our own money. We take the risk. We pay the bill. They make the profit. In what world is that free market capitalism?
There is a complete lack of accountability in this reality. The government claims to investigate financial corruption, but the taxpayer sees no real action. Members of the Federal Reserve are still permitted to buy stock in companies who then receive special access to Federal loans. Banks like Bank of America can still legally transfer money into certain types of accounts that are shielded by taxpayer dollars.
The incestuous relationship between Capitol Hill and Wall Street is a vicious cycle that threatens confidence in our entire system. Since the collapse of Lehman in 2008 and the bailouts that followed, no bureaucrat or Wall Street executive has been perp-walked out of his mansion to face charges for mishandling billions of dollars. What Americans perceive is a disparity in the way people are viewed and treated by the system. If you are a member of an elite class of high-net-worth individuals or an executive at a major financial institution, much less a Congressman, the law is apparently applied differently. Either that or it is simply molded to fit your needs: more like guidelines than absolutes.
If a regular American steals $100,000 they go to jail for decades. A corporate executive at a big bank loses $100 million through reckless speculation and it's chalked up to an strategic error while we foot the bill. It really does seem that if you add a few more zeroes to the sum and happen to be a part of what passes for the American ruling elite, you can get off without much more than a slap on the wrist.
What the Tea Party and OWS are trying to remind people in their own distinct ways (with, of course, completely different prescriptions for change) is that it's not just about corporate losses. Ordinary Americans have lost billions from their net worth as a result of this perversion of the free market on the backs of the taxpayer. Ordinary Americans are afraid of losing their jobs and their homes, but there is little fear on Wall Street with a system that always gives Main Street the bill.
The bailouts are still happening just in different form and Americans should demand that they stop being used to fuel failed enterprises. Nobody is bailing out the homeowner who is under water or the taxpayer who is paying for the banks' ability to keep running amok. Nothing is really "too big to fail," despite the cries of the "sky will fall."
As 2012 approaches, presidential candidates who have the courage to say, "Let them fail!" have the opportunity to win praise from both the OWS and Tea Party crowds. That might actually bring about some of that real change that was promised at one time or the other. It is time to put some teeth into the SEC and actually create an enforcement regime that works. It's probably time for the FBI's white collar crimes unit to start paying attention to this. Quite frankly, it's probably time for some people to go to jail.
It's time to take the taxpayer crutch away from Wall Street executives. But most of all, it's time for American free market capitalism to stand on its own again.
Ned Ryun is President of American Majority, a leading national conservative grassroots training organization. To learn more visit www.AmericanMajority.org.
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