Monday, November 21, 2011

Occupy | If You See Something, Say Something

— Department of Homeland Security Secretary
Janet Napolitano, August 17, 2011

If you see something, say something.

This is what citizens who identify with the Occupy movement in a thousand cities and towns across the U.S. are doing. They see suspicious behavior in the financial sector — acts that look fraud, bribery, confidence games, conspiracy and looting. And like the good citizens they are, the Occupiers are saying what they see.

The Occupiers point at smoke rising from the ruins of the real economy and say, "We think someone set this fire by negligence, if not on purpose; and we think it's probably the ones who devised ways to make mad sums without regard for consequences — including burning it down and collecting insurance after the fact in the form of bets laid against their own clients."

Occupiers would like to know if anyone is looking into this, because it's unclear that anyone is, while it's become quite clear there are serial offenders who will be happy to pay hundreds of millions in out-of-court settlements as long as that leaves open the option to take in billions committing the same infractions again and again.

Thus, something else that seems clear to Occupiers is the need for real legal action, redress and regulation on the people who have had and are having their way with the financial markets.

In September, 2008, then sitting chairman of the Securities and Exchange Commission, Christopher Cox, wrote: "The last six months have made it abundantly clear that voluntary regulation does not work."

This admission came four years after the S.E.C initiated a program of voluntary self-regulation for the biggest banks, giving those banks latitude to set their own standards for capitalization ratios. The big banks quickly ran that ratio beyond 30-1.

To understand what that means (in admittedly simplified terms), think about how much money you have to have in your personal account in order to lend me $300. That's going to be something in the neighborhood of $300, right? If you were a self-regulating big bank from 2004 on, you would have the assumed the right to lend me $300 with just $10 in your account. Or, more to the point, with $300 in your account, you could lend $300 to 10 of your closest friends — and collect interest from each of us instead of just one of us.

To get a sense of the ballpark we're playing in, multiply by five big banks, add nine zeros and repeat.

Occupiers look at that sort of thing — and this is just one among several things — and say, "Wait, what?(!!)"

They're not alone. A few reporters and commentators raised questions at the time and later, but not loud enough or long enough, apparently, to capture and hold the attention of the people who are supposed to be looking out for all of us.

So, rather than standing by while it happens again when it's become VERY OBVIOUS that, left to their own devices, bad actors in banking and finance will never come to their senses — so it will happen again, and maybe soon — the Occupiers are saying what they see. And they intend to keep saying it until people in power pay attention and fix what's broken for the good of the nation. This what we expect from good citizens committed to the common good.

Drum circles aside, do you really have a problem with that?

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