This week 60 Minutes gave viewers a good look at the widespread criminality that created the Wall Street mortgage boom and led to our ongoing financial crisis. They also saw some of the overwhelming evidence of illegal activity on the part of big banks, and were reminded that none of those banks' executives have been prosecuted.
As ugly as the situation is, there is some logic behind the government's actions -- and its inactions. They're acting on a tragically incorrect (but internally coherent) set of assumptions that can be summed up in one sentence. It goes something like this:
"To preserve the health of the American economy, banks must be allowed to keep preying on their consumers."
That's it. That's the logic.
But there are two exciting 'Occupy' developments this week that could change the equation -- 'Take Back the Capitol' in the District of Columbia, and Tuesday's 'Occupy Our Homes' events around the country. Think of them as complementary actions: One is taking place at the site of our greatest government power. The other is bringing the action to homes where people have been victimized by bankers.
People may not realize it, but there's power in those homes, too.
The Logic of Injustice
Despite their destructive behavior, the people who bailed bankers out and are giving them a free pass for their crimes aren't necessarily evil or corrupt. Well, okay, people like this guy are. But others have merely been so infected by misguided economic thinking that they really believe that the only way to save the economy is to keep shafting consumers and pampering mega-bankers.
The thinking goes something like this: Our largest banks are too big to fail, and since we lack the will or the motivation to break them up or regulate them we must protect them at all costs. We've propped them up with TARP, quantitative easing, and $7.7 trillion in secret Federal Reserve loans, but they're still shaky as hell. If we prosecute any of their executives, their stock prices will fall and they'll collapse again. And they'll take the entire economic system with them.
That leads to some grotesque miscarriages of justice. Nobody at Wells Fargo has been indicted for money laundering, for example, despite the fact that the bank has paid millions to settle charges of laundering cash for the Mexican drug cartels that have murdered more than 35,000 people. As an experienced bank investigator working for the Senate observed, "There's no capacity to regulate or punish them because they're too big to be threatened with failure."
The Bailout Nobody Knows
And banks don't just need protection from their own criminality. They also need protection from their own lousy management. Their balance sheets are filled with toxic risks from their long run of incompetence, negligence, and greed. That's where you and I come in. Some powerful folks are afraid the banks will fail if they're forced to write off the bad loans on their books, or to stop profiting from loans sold deceptively or irresponsibly.
TARP may be over, but there's another massive bank rescue going on. Who's funding it? We are. Every time we pay a usurious interest fee on a credit card, we're propping up the banks. Every time we make another month's payment on an underwater mortgage, we're propping them up too. Every time we pay an overpriced consumer loan of any kind, we're making another payment into the consumer-funded bailout that's keeping the big banks afloat.
It would be great if politicians in Washington stopped using American consumers to subsidize banks that shouldn't even exist. But they haven't. That's where "Occupy Our Homes" comes in.
Occupy Our Homes
Tuesday, December 6, has been declared a National Day of Action to Occupy Our Homes. Its goal is to focus attention on the corrupt banking practices that led to the mortgage boom and today's ongoing economic misery for most of the 99 percent.
It's also a day for helping people in our communities who have been victimized by predatory lending, criminal bank forgery, unfair or illegal foreclosure practices, and other bank abuses that victimize the public. Occupy Minnesota has already occupied an illegally-foreclosed home, and plans to do the same thing with another home tomorrow. Here in Los Angeles, where an inspiring victory has already taken place, OccupyLA will help two brave families re-occupy their illegally foreclosed homes.
One of those homes belongs to a three-earner family that includes a gainfully employed woman with cerebral palsy named Ana Wison. Ana's household clearly seems capable of making its mortgage payments, but her bank's foreclosing anyway. And in one of ironies that have become all too common, the bank in quesion is none other than that Mexican drug cartel money-laundering outfit, Wells Fargo.
The Occupy movement hopes to focus the public's attention on people like Ana Wison. In the words of the Dylan song: "Things should start to get interesting right around now."
Demonizing the Victim
Resisting illegal foreclosures is a good first step. It brings attention to Wall Street's criminality, venality, and plain old inhumanity toward the people they call their"customers" - but treat like serfs.
It does something else important: It counteracts the brainwashing, driven by Wall Street and dutifully echoed by the media, which has demonized the victims of bank misbehavior. (We were trying to fight that brainwashing back in 2008, without much luck.) The Occupy movement has already won several battles in that war. If the public's attention can now be focused on people like Ana Wison, that can be a powerful blow against the Wall Street/corporate media "they deserve it" hype.
What about the millions of people who have suffered because of the banks' predatory mortgage lending but aren't behind in payments or in the foreclosure process? We need to re-open the debate about the fairness of forcing any underwater homeowners to pay underwater principal on homes that their banks knew, or should have known, were going to decrease in value. After all, the same conglomeration of banks and corporate media that demonize homeowners as "greedy" and "irresponsible" spent most of the last twenty years convincing people that real estate was a sure-fire investment.
Banks made an extraordinary amount of money off the bubble they created. The total mortgage amount outstanding in this country went from $6.2 trillion in 2002 to $11.9 trillion in 2009, a meteoric rise. And while banks feed off the Federal Reserve's unusually low rates, they've renegotiating very few home loans.
Consumers also owe nearly three quarter of a trillion dollars in credit card debt, much of it being paid at unconscionable rates of 12 percent to 29 percent - while their banks enjoy rates from 0 percent to 3 percent, thanks to the government institutions created by those same consumers.
Occupy Our Homes. Occupy Our Credit Cards. Occupy Our Payday Lending ...
What will happen if consumers stopped blaming themselves? What if they demanded that the banks take responsibility for their irresponsible and/or predatory lending? What if they refused to stop this country's perverse economic role reversal, where customers have become the ATMs while banks keep making the withdrawals?
If 10% of America's homeowners declared a mortgage strike it would rock the banking world. If everybody paying exorbitant credit card interest declared a moratorium on payments all at once, Wall Street would change forever.
Think about it: "Occupy ALL Our Homes." "Occupy Our Credit Cards ... Our Payday Loans ... Our Buy-and-Drive Loans ..." I'm not saying these are necessarily the right tactics, although they very well may be. But what's most important is that we understand that consumers have far more power than we usually realize - provided we act together.
Many of Washington's leaders will cringe at the thought, of course. "That could hurt our biggest banks," they say. It would be tempting to reply, You say that like it's a bad thing. Here's a better response: Then start planning to break them up in an orderly fashion. We're done living a life of indentured servitude just so we can subsidize their greed.
Those are the discussions that we should be having. If powerful people on Wall Street and in Washington aren't worried about Occupy Our Homes , they're not paying attention. But with any luck, they soon will.
______________________
(If you've been a victim of mortgage abuse you can tell your story here. If you want to find an Occupy Our Homes event near you, you can look for one here.)
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
Curtis Arnold: 2011 Editor's Choice Awards, Part 2
If we insist the government hold these banks accountable for their illegal actions, as they should, then we too must hold ourselves accountable for our personal finances and live responsibly within our means. Occupy your checkbook!
& this is the (il)logic used? "To preserve the health of the American economy, banks must be allowed to keep preying on their consumers."
That's a lot like saying, 'The operation was a success however the patient died.'
To preserve the health of the American economy, the unhealthy parts or systems must be treated & the healthy parts encouraged to grow.
The FIRE (Financial, Insurance, Real Estate) sector, as the Lobbyists, Legislators, Lawyers & various other Lapdogs like to call it, has been proven to be like a cancer to the American economy. One of the only differences between a cancerous cell & a normal cell is the rate at which they grow. An untreated cancer cell may spread to other sites (metastasize), & may eventually overtake the body. When this happens, the body dies.
"... given a choice of 2 courses to follow & all other things being equal, that choice which is more Dynamic, that is, at a higher level of evolution, is more moral. An example of this is the statement that, “It’s more moral for a doctor to kill a germ that to allow the germ to kill the patient.”
The germ wants to live. The patient wants to live. But the patient has moral precedence because he’s at a higher level of evolution."
- 'Lila, An Inquiry into Morals' by R Pirsig
it was tenuous for some time but they had points of control with the judges approving massive robo signed docs and that has stopped - in some states they are reversing previous foreclosures
the AG's in CA / NEV / MASS / NY are all doing their own thing and not adhering to the national cabal by Iowa AG for the other states approval to exempt the banks from prosecution
the lawyers on deal after deal are making progress on loans being stopped from foreclosures
the CDO actions of major investors aganist the banks are gaining headway
the EEC and the ECB are on the run - if they dont solve the problem the US banks have enormous CDS exposed with no offset since the european banks will go bust
the value of portfolios of second mortgages on Chases and BoA books are worthless (15 cents) over 175 billion face value in total which alone take out their cumulative net worth
i think the situation with OWS has exploded and shown the way for many groups and no one is backing off
the federal govt is locked up with no movement on anything from the republicans
this is all headed for huge turmoil on multiple levels -
can it all come out in the banks favor??
On one hand, I cannot vote for the republicans. But on the other hand, Obama said that while Wall Street behaved immorally, they did not do anything illegal.
I read a lot of articles about Wall Street illegal activity, yet no one seems to call out President Obama regarding his statement. Why did he say it? I can only guess that he is on the side of the banksters. I guess he sold us out becuase he needs thier money to continue holding his position as president.
Looking at Obama's own choices of economic advisors strongly reinforces my assumption.
So much of our problems are due to lack of justice for the crooks.
www.goooh.com
It would be great if politicians in Washington stopped using American consumers to subsidize banks that shouldn't even exist. But they haven't."
Hear Hear !!!
http://www.collapsenet.com/154.html