Tag Archives: Financial Justice

Pushing Back the Banks in the Wake of Occupy

tumblr_lt7r2hsiK51qav5oho1_500 Orleans Given all of the niggling around the impact of the Occupy Wall Street movement and its impact, it is worth raising some footnotes a little higher on the tally sheet where the results are important, but perhaps unnoticed.  Take these recent developments into account.
Small example, but telling is that JP Morgan Chase, perhaps the most arrogant of banks led by Jamie Dimon, announced that they were NOT planning to add the surcharge onto customers’ accounts for use of debit cards.  Bank of America, which had led the jump into the deep water with their announcement of the $5 per month charge, has also indicated that it is perhaps backing up from its Netflix moment in the wake of customer response.

As we have discussed earlier, lawyers who have successfully litigated with these outfits have called this nothing but grant larceny.  I had the discussion with my banker at Capital One who could only rationalize that it was being considered because “they had to raise money somewhere.” We all know that the defense that “you needed the money” is both the truest and least effective response any criminal can make.

The Times did a sad service with a front page article on the shrewd calculations that Bank of America and its colleagues have made by pushing direct and automatic payments for customers to their regular vendors from utilities to credit card companies to home mortgages and back again.  The story was an easy reminder for readers both how easy it is to sign up for such payments and how hard it is to unravel them to the degree you become welded to your bank regardless of the outrageous charges and abuse.   We are near the point where we are going to need to demand an easier “exit” policy from our banks, just as we had to achieve with our cell phone companies around keeping our phone numbers in recent years.  The little things can kill you!

Even though Occupy has not been successful in seeing any traction on the urgent “Geithner Must Go!” campaign to hold him responsible for some much of the Wall Street pandering and pampering he led first as the critically important head of the New York Federal Reserve Bank, the storm may finally be coming on the horizon.  Amazingly a story in today’s Times documents the giveaway with AIG where banks were paid in full from the federal coffers and were not asked to take any haircut, but in face were even required to shave.  Even banks that offered to take less that they were owed were informed by Geithner’s Fed, since he was head at the time, that they would be paid in full.

At least Geithner, now at Treasuery, with Ben Bernacke at the Federal Reserve are having to line up to finally provide some regulation for non-bank banks in recent hearings in the wake of Occupy.  Of course it is not enough, but even bringing 30 financial institutions like Mass Mutual, Zurich, some hedge funds and outfits like Blackrock and others under regulation because they control over $50 Billion in assets is something.  The Financial Stability Oversight Council still has to wait for comments so the lobbyists will be feeding at the trough, but at least now they need to realize that they might have to reckon with real, immediate, and potentially powerful political outrage if the boys give yet another break to the bankers.


Opposition for the Rich, Support for Activism

New Orleawall-street-protrest-occupy-wall-street-eat-the-richns The polls have to be giving the middle-of-the-roaders and the settle-for-the-best-we-can folks some pause when the lines are hardening against the scandalous income inequality in America wrought by one tax break after another for the rich and the increasing support for the Occupy protests and other expressions of frustration and rage spoken by any willing the voice the people’s true feelings.  Other indications are that the vast mobility of the young, long a defining characteristic of America, slowed to a screeching halt because of the Great Recession and the deepening frustration of a generation lost and the risks associated with future expectations and job losses.  The opposition to the status quo is going to increase as the resentment of the young accelerates.

Among the numbers popping up everywhere a Time Magazine/SRBI poll referenced by Charles M. Blow of the Times indicated that 54% of those polled are responding “favorably” to the protests.  86% believe that “Wall Street and lobbyists have too much influence in Washington.”  79% hold that “the gap between the rich and the poor in the U.S. is too large.” 71% believe – listen to this President Obama and Secretary of the Treasury Geithner – “Executives of financial institutions responsible for the financial meltdown in 2008 should be prosecuted.”  68% have finally decided that “The rich should pay more taxes.”  And, finally, given the deep cynicism more than half, 56%, believe the “movement will have no impact on American politics.”

At the end of last year the well respected Center for Budget and Policy Priorities reported that the income inequality in the United Stated had hit record highs since such reporting was documented.  During the period covered in the late 2010 period income at the top had risen by $180,000 and at the bottom by only $400.  The gap may be even larger at the end of this year.  Last week another study found that the income inequality in the United States now leads all other industrialized nations in the world.    What a sorry situation!

The only real surprise these days is that the polling data doesn’t indicate even more consensus that public policy slanted towards avarice and the rich has gone too far.  Little is being done to change it so, politicians and policy makers are obviously going to keep waving a red (green?) flag in our faces until we stand up and force the change.