Occupy Wall Street? Ten years too late.

Someone asked me “So, what about this occupy Wall Street thing?”

Good question. I heard President Obama asked the same thing this morning, particularly why the crooks of Wall Street who brought the country to its financial knees haven’t all been lined up and shot, or at least prosecuted and their Gucci loafers confiscated.

His answer was actually very good: What the mavins of Wall Street did was repugnant and immoral and generally wrong, but it wasn’t illegal.

It wasn’t illegal because of all the deregulation done under various presidents — pick one over the last 30 years, they are all guilty — in the interest of boosting capitalism and profits and so forth. Removing the wall between banks and investment firms should have been criminal, but wasn’t, to pick one example. Investment banker, and bankers in general, discovered that there was a lot more money to be made in churning financial paper, producing profits through derivatives and other similar leveraged stock deals without producing any actual product or even any financial growth. Regular loans to build businesses, buy homes or expand factories to produce products were so boring.

It was all pie in the sky money — paper profits invested to create more paper profits that were leveraged to produce even more paper profits, and in the end it all created a huge house of cards bubble about 20 miles high.

But it wasn’t just Wall Street’s shenanigans – at the same time the dergulation was going on, huge amounts of money were floating around the globe looking for a place to live and grow. We’re talking multiple trillions of dollars.

Alan Greenspan said federal treasury rates were going to be kept low to hold inflation in check, but this had the perverse effect of sending all that money looking for higher rates of return, finding them in housing mortgate investment instruments, which kicked off an inflationary spiral in the housing industry aided and abetted by the lack of regulation pushed by those several presidents, not to mention money managers who saw a loophole wide enough for a battleship and who jumped through it with both feet.

The result is vastly well-described in the NPR show “the Giant Pool of Money” done by “This American Life” which you can read here or listen to (click) but the bottom line is that mortgage companies suddenly found themselves with piles of money seeking a way to be invested. In order to produce enough mortgage product for that money — those collections of mortgages that were combined and turned into investment bonds — the lending standards had to be made looser and looser because there just weren’t enough borrowers who could qualify otherwise.

Alan Greenspan, chairman of the fed, is criminally responsible although, sadly, what he did was criminal neglect which is hard to prosecute. Greenspan had such power that all he had to do was fart wrong and the whole thing would have come to a screeching halt. Instead, faced with housing prices that had tripled or more in a year (which is insane since wages were essentially frozen) and lending practices that were giving half million dollar loans to mothers in welfare, or even dead people, the best he could come up with was that there was a bit of “froth” in the housing markets.

Froth? The last time we saw that kind of froth was Florida in 1927, and the result then was the same as we saw now: Complete disaster. Greenspan should know enough history to realize this, but he’s also a Libertarian with blind faith in the markets to do the right thing, which is criminally stupid. He has later admitted he was wrong, the “oopsie!” heard ’round the world.

So what to do now? Pay off the mountains of debt and fix Wall Street so this can’t happen again. This means vastly stricter regulations on how banks operate.

Amazingly, Tea Party types and even allegedly mainstream Republicans are resisting adding regulation to the markets. They scream “no government bailouts!” but don’t want to stop financial crooks from stealing ever more. Spineless Democrats don’t seem able to make what ought to be as slam-dunk case.

My own solution is to give as little of my own money as possible to those crooks. They pushed home equity loans — this is really a second mortgage, but that sounds icky, so they changed the name — remember those stupid “put it on the house!” ads? – so you should never get one of those.

They push credit cards, so never get more of those than you absolutely need and pay it all off every month. Never give the bastards a nickel of interest.

The new debit card fees? Cut up the card, find a credit union with a free card, or use cash. You’ll be amazed how much less you spend when you don’t use those cards, too, and that will hit them where it hurts because they won’t be making any transaction fees as well as card fees, not even the lowered fees they’re now complaining of.

In short, become a real, true, honest fiscal conservative — that used to mean running your household with no debt, owning your home free and clear, saving money to buy stuff. Sadly, that is something all Americans got away from decades ago, mostly because of agressive marketing by those crooks.

ps: here’s a list (click!) of what the “Occupy Wall  Street” folk want. Very ambitious, doomed to fail, but not bad.


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27 Responses to Occupy Wall Street? Ten years too late.

  1. karl dumas says:

    when are you going to tell us what you really think? :-)

  2. hawg says:

    “..mostly because of agressive marketing by those crooks.”

    let me guess, you probably think guns kill people and magazine adds are to blame.

    it’s people charles, it’s always people. ALWAYS.
    but it’s just not politically correct, liberal, or enlightened to “blame” people for their decisions and actions. you actually even allude to it here but then fall back on blaming marketing.

    • Charles Trentelman says:

      well, guns DO kill people. I love it when people say “do you want your cameras regulated?” and I always answer “if someone fires my camera without checking to see if it’s loaded, I end up with fuzzy pictures, not a dead kid.”

      But I digress — I think I make it clear that there is responsibility on all sides here, but clever marketing is at fault in a big way. When I was a kid (and dirt was still being invented) nobody talked about 2nd mortgages because it was bad enough having one mortgage. Being in debt was a matter of shame, in some circles, and the culturally supported goal was to pay the house off, own it free and clear. Read “Death of a Salesman” to see this in action.

      Then some clever marketing person came up with the “home equity loan,” which makes it seem as if you still own that equity, you’re just borrowing against it, and the ads that sang “Need a trip to Italy? Put it on the house!” combined the idea of doing something fun with the phrase “on the house” which we are all culturally inclined to think means “free,” even if, intellectually, we know better.

      The old ideal of being out of debt was pushed away — suddenly being in debt was the smart thing to do, even hip. You could go to Italy! Put it on the house!

      Yes, you are supposed to know better, and many do and did, but marketing is all about making people suspend rational thought. Calling the inheritence tax “a death tax” was marketing genius and was very intentionally done that way by the GOP marketing experts, just as calling “end of life planning” the much more odious “death panel” still lingers.

      • Owain says:

        ‘Then some clever marketing person came up with the “home equity loan,”’

        Is it the banker’s fault if you fall for that, or the consumer’s fault? Whatever happened to ‘caveat emptor’ (Let the buyer beware)?

        Seems like this is akin to blaming the car salesman because you bought a sports car you can’t afford.

        • Charles Trentelman says:

          if the car salesman fills the tranny with sawdust, yeah, then you blame him too. Check out the “This American Life” thing, especially where loan officers were lying about peoples incomes on those “no income, no asset” verification loans. You may have the sort of iron will that allows you to resist any and all sales pitches but many could not and, yes, the guilt is everywhere but scammers make money being believable.

          So you’re saying what exactly? That car salesmen (to continue your metaphore) have no responsibility to be honest at all, it is entirely the buyer’s duty?

          • Owain says:

            Your analogy is flawed Charles. There was nothing wrong with the loans other than people weren’t able to repay them, just as if there may be nothing wrong with a car someone buys, but for which they are unable to pay.

            As far as my metaphore goes, why do you think the warning ‘caveat emptor’ has been valid for the last two thousand years, or so. People WILL try to scam you, or sell you something you don’t need.

            For those who lack my iron will and abundant common sense, I guess the best advice I can offer is, “Now you know. Don’t make the same mistake twice.”

          • Owain says:

            As far as ‘no income, no asset’ loans are concerned, if a bank is dumb enough to make such a deal, the bank should eat that loan when the mortgage holder defaults. But no, the government rewarded such foolishness by bailing them out, thus guaranteeing it will happen again.

      • hawg says:

        and you changed nothing from what I said.
        people make their own decisions. period.
        yes, I know, sometimes there is provable criminal intent, I get it. but people still make the final call.

        oh and by the way, guns don’t kill people.
        bullets do.

        AND cameras are used to take child porn pictures. but not yours, right? (I hope)

  3. Owain says:

    Perhaps the protesters should try to occupy the Oval Office next.

  4. JuanRamon says:

    I have a theory: Financially strangle education (and then blame the schools); educate the electorate for jobs (scrap the ‘well rounded’ part); then control the narrowly educated proletariat with slick ads and sound bites. Oh, and that continual war thing that Orwell brought up and Eisenhower warned us about.

  5. Pingback: Occupy Wall Street protests will fail or succeed based on its goals | The Political Surf

  6. Kyle England says:

    Thank you for such a level headed take! Though you didn’t quite answer the question about the protests…well kind of in the Title. I was only 15 at that time and just one with the flock I guess you could say.

    I am glad Owain has made a perfect example of the generation just older I see being very resistant to all this. I’d go as far as to say they are acting TERIFIED now that this movement has gained steam. As they are the ones who’s are really going to miss those trips to Italy when that bubble burst :)

    At least, I hope these protest are fuel to creating more transparency in society as corruption has become rampant! The younger generations have been born into a massive pile of shit. This movement is the first glimps of hope I have seen, in my life. Call it what you want, I am proude to see others willing to stand up for what they see is morally wrong.

    • Owain says:

      You don’t know me very well if you think I’m terrified by this crowd. What on earth have I posted to give you such an idea? Conservatives I’m familiar are laughing at the Occupy Wall Street protesters.

      • Kyle England says:

        You are right I do not know you, I only have a small perception of you based on the words you have wrote here. Very defensive words, almost on the verge of attacking. All while ignoring the facts that were put in front of you.

        As if these protest are….attacking YOU.

        “Perhaps the protesters should try to occupy the Oval Office next.”

        Great words from the mouth of a blind follower

        • Owain says:

          Did you follow the links (embedded in the words ‘Oval’ and ‘Office’)? If you did, you’d see the rationale behind that post. Not an attack, but, IMO, a valid point. Now if you want to debate that point, I’m up for that, but FIRST, you have to be aware of the point.

          Now who is ignoring the facts placed directly in front of whom?

        • Owain says:

          Oh, and Bob, if you are monitoring this conversation, here’s another example of liberal intolerance on the SE blog boards.

          “Great words from the mouth of a blind follower”

  7. ctrentelman says:

    OK children, play nice before someone gets hurt.

  8. rls says:

    I think it’s funny that Romney calls the occupy wall street thing “class warfare.” He’s right. It IS class warfare: It’s America’s little guys fighting back against Romney’s bankers. Don’t forget, Romney made his millions by cutting jobs while he was at Bain. He’s wealthy because he got thousands of little guys laid off so that corporations could profit. It’s about time the little guys fought back!

    • ctrentelman says:

      When the French peasants were putting that nobleman on that spit prior to roasting him and forcing his wife to eat him (before they threw her in a nearby river) because the French noblemen had treated the peasantry like slaves, or serfs, or worse, that nobleman no doubt complained that he was an unjust victim of class warfare, and felt himself ill-used because he had only acted within his rights.

      No doubt the peasants agreed he had, but they roasted him anyway.

      I find it fascinating that the types of Republicans complaining of class warfare are the same sort of Republicans who like to spout stuff about how the tree of liberty has to be refreshed occasionally with the blood of patriots and tyrants. Then they act like noblemen and can’t for the life of themselves understand why anyone objects

      I am certainly not advocating blood, for real, but I do think people like Romney, he with his mansions in several states, and his friends in corporate high places with lots of money, and his well-financed influence, needs to cultivate a clearer view of his place in the universe.

  9. hawg says:

    “but I do think people like Romney, he with his mansions in several states, and his friends in corporate high places with lots of money, and his well-financed influence, needs to cultivate a clearer view of his place in the universe.”

    sorta reminds you of people like Kerry and Edwards, huh?

    • ctrentelman says:

      did you have a point, or are you just being cute and trying to shivt the conversation because I’m right and you don’t want to admit it?

      • Owain says:

        I think he does have a point, Charles. Why rail against Romney, yet embrace a Kerry or an Edwards? Don’t you think that’s just a little hypcritical?

      • hawg says:

        don’t know how to explain the “blindingly obvious”

        actually I was trying to “shivt” the conversation back with the bullets kill thing and the cameras used in crime thing, but you wouldn’t bite:)

  10. Abu Salman says:

    The 99% are angry at the FRAUD of Wall Street, the Street, in collusion with Washington. Corporatism means fascism by definition.
    This is big news, and another piece of the puzzle to expose that the economic system is corrupt and slanted to help the rich privileged class, and the corporate “Powers that Be,” and yet … with exposure to the masses, (and Occupy Wall Street movement appears to be masses until it is hijacked or co-opted ), about the horrendous extent of the fraud and harm that the web of debt by Federal Reserve System, Derivatives, and related financial and foreign currency transactions, that is privately owned to profit from us all by taxing us all through interest payments on these DOLLARS and other currencies for the benefit of the too big to fail and jail banksters, ….the house of fraudulent cards is beginning to shake and starting falling down …
    The pressure and momentum needs to be increased to produce and interest-free economy of honest trades, business and commercial activity.
    Terrorism by Economic Collapse, debt bondage, money as debt on interest, etc
    Derivatives ‘Mother of All Bubbles’ exploding
    Hedge Hogs; Gold Man’s Sacks; “financial terrorist attacks;” and the Obama sellout:
    SUPER COMMITTEE BIG BANK ROBBERY and “this sucker” going down
    Super rich 1% vs 99 %; Terrorism Cycle: Guillotines: Occupy “ALL” streets.

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