Photo: Julia La Roche for Business Insider
The goal of Occupy Wall Street must be to shame the banks. My first article here at Business Insider was all about how bankers lost their way when comparing their behaviour to that of Jimmy Stewart’s character in It’s a Wonderful Life.Bankers have always been of two varieties: those who were moral and restrained in their lending practices and interest charged and those who are rip off artists with greed as their god with easy money and high interest rates as their method of operation.
The OWS must use the protests as an opportunity to point out the differences. Their parents dealt mostly with honest bankers. There still are honest bankers. But the housing bubble and shadow banking system was far from honest. And this banking system is still in place, and still capable of raping America as soon as it puts some of the problems of the current crisis behind.
Here are just some of the reasons why the bankers must be shamed:
1. They raised interest rates and took away credit lines as they were getting discount money from the Federal Reserve.
2. They offered easy money loans by lying about the ability of real estate to crash.
3. They abandoned underwriting which was crucial to bank health and honest relationships because they had the opportunity to pass the loans off to unsuspecting investors. The lack of underwriting also failed to protect the banks and the borrowers, which sound underwriting has always done in the past.
4. They tried to blame everyone else for the crisis, or tried the shared blame game, to save their sorry skins from jail.
5. They controlled government and got government to forgo prosecutions.
6. They retrieved properties by bogus, illegal and immoral foreclosure procedures and got the government to ignore the theft. This brought the reputation of our courts to a new low.
6. They kept property off markets creating a sense of scarcity when main street needed a break and cheaper prices.
7. The bailouts, which were likely necessary due to bank runs, were not accompanied by a stake in the recovery. The U.S. government took a stake in the weakest TBTF bank, Citibank, while failing to take a stake in GS, JPM, etc.
8. The banking system made it difficult for savers and older people to live by taking away a decent return on their investment in bonds, due to continued low interest rates.
9. They spread CDO’s throughout the world based upon bogus risk models that they knew were bogus.
10. They wrote bogus insurance on these CDO’s and on everything else and these swaps were promises to pay and may not have any financial backing behind them. This is why institutions can’t fail and governments, even little ones, cannot default or apparently it threatens the entire financial system.
So, everything that transpired with the banks has been unlike Jimmy Stewart’s bank, and has been all about Mr Potter’s bank. The shaming is necessary because these are acts that should embarrass the bankers. The bankers need to be held in continual low regard, which of course gives used car salesmen and carnival barkers a new respect.
The Occupy Wall Street movement can shame all employees of the institutions, break morale, make people see that these are dirty, dirty enterprises, capable of all manner of mayhem and harm. The banker class should now be seen as the lowest and most distasteful class. The legacy of OWS hinges on its ability as an organisation to place the scarlet letter onto the bankers’ chests.
The lessons for all consumers this movement can bring is to expose these banks in their planning for more easy money in the future. If this next round of easy money, which I believe is coming, is shamed, that could help a lot of main street people avoid another attempt to jack up real estate prices artificially, only to see a crash and devastation.
The movement should pounce on any efforts to get the securitization market going again, and should be out front in consumer warnings. Heck, even if the Republicans, and some Democrats repeal Dodd-Frank, this movement can be our consumer watchdog, our consumer beacon, to get the word out to the people.
Wall Street desperately wants another housing bubble as soon as they can get it. But shaming the banks could stop the next one, and put these bankers in their place without any need for violence. It is democracy in action. If the bankers want to fight democracy, they should give it a second thought.