Monday, October 10, 2011

What Do The Occupy Wall Street Protesters Want?

Since the Occupy movement began on Wall Street we have heard the main stream media's near universal refrain that, "no one knows what they want." To anyone listening, the message of what they want is clearly understood and resonating with a growing number of every day Americans from coast to coast, including North Texas. The truly grassroots Occupy movement now has meetups active in 1,539 cities worldwide.

Occupy Dallas tent city in Pioneer Plaza DallasOver 100 members of Occupy Dallas, which is a part of the Occupy Wall Street movement, set up a 'tent city' in Pioneer Plaza park near downtown Dallas to provide shelter and a place to sleep. (picture right)

The Occupy Dallas group obtained a city permit Monday to remain camped in Pioneer Plaza park until 5 p.m. Friday. Their is potential for conflict between protesters and City Hall as given the liability insurance required as a prevision of the permit is difficult, if not impossible, to buy.

While the Occupy movement has spread to many cities around the U.S. over the last weeks, the movement has also found support on high school and college campuses across the country, as reported by the Student Activism blog. (Thanks to Facebook and Twitter!) In total, students from at least 100 college campuses around the country walked out of class in a show of solidarity and support for the Occupy Wall Street movement on October 5th.

Students are angry about the debt that many of them must obtain to go to college and the fact that they are graduating into the worst job market since the Great Depression. And it's no wonder: Outstanding student loan debt exceeded credit card debt for the first time in 2010 and student loan debt is up 25 percent since 2008. Organizers behind Occupy Colleges have announced this Thursday, October 13 as the date for a second national student action day in solidarity with Occupy Wall Street, with students from at least fifty-six campuses pledging support.

What do the occupy Wall Street protesters want?

Occupy Wall Street protesters are clearly saying that individuals, corporations, and special interest groups, armed with the power of wealth, have gained an unfair advantage over 99 percent of "We the People" in every aspect of our society. This "Letter To The Ruling Class," that seems to have gone viral on the Internet among Occupy Wall Street supporters, sums up the movement's complaint:

You control our world. You’ve poisoned the air we breathe, contaminated the water we drink, and copyrighted the food we eat. We fight in your wars, die for your causes, and sacrifice our freedoms to protect you. You’ve liquidated our savings, destroyed our middle class, and used our tax dollars to bailout your unending greed. We are slaves to your corporations, zombies to your airwaves, servants to your decadence. You’ve stolen our elections, assassinated our leaders, and abolished our basic rights as human beings. You own our property, shipped away our jobs, and shredded our unions. You’ve profited off of disaster, destabilized our currencies, and raised our cost of living. You’ve monopolized our freedom, stripped away our education, and have almost extinguished our flame. We are hit… we are bleeding… but we ain’t got time to bleed. We will bring the giants to their knees and you will witness our revolution! -- Attributed to Jesse Ventura by Kos

What the Occupy activists want has wealthy conservative plutocrats in a panic:

Occupy activists want the restoration of a fair and balanced playing field for every American. A field of play that is not controlled by the 1 percent of the wealthiest Americans; a field of play where everyone pays their fair share to build and maintain our public education, utility and transportation systems; and a field of play where no one person, corporation, or special interest group, armed with the power of wealth, can gain an unfair advantage over even a single American.

Occupy activists want a fair and balanced playing field that the federal government's system of oversight and regulation provided to American society, before conservatives dismantled it in their fervor for deregulation and elimination of taxes payed by billion dollar corporations and the richest 1 percent of Americans.

What the "Occupy," "The Other 98 Percent," and "The 99 Percent" movements want, in essence, is a restoration of Pres. Roosevelt's New Deal protections for the American financial system and middle class Americans.

Omaha Billionaire Warren Buffett is among those who have argued that both the economy and democracy suffers when great wealth is concentrated in the hands of a few. He said that 40 million jobs were created between 1980 and 2000, when the tax rate for the rich was higher than it is now. "You know what's happened since then: lower tax rates and far lower job creation," he said.

Buffett is not the first to observe that a nation's wealth concentrated in a few hands is bad for America. Houston native Jesse H. Jones, a wealthy banker and builder who was a prominent member of Pres. Roosevelt's New Deal administration said in a 1936 national radio address:

“It is certainly not to the best interest of our country that control of the wealth, industry and credit be concentrated in a few hands. If we ever have social disturbance, it will be due to this. The distance between the palace and the hovel is too great — the mountain too high to climb.”

After more than a decade of Republican laissez-faire government and unregulated "anything goes" excesses in the banking and securities and commodities trading systems, many banks by 1932 were badly wounded by their personal and financial ties to Wall Street. People were losing their jobs and their homes in the early 1930's, just as they are today. And, just as today, the nations wealth was concentrated in a small percentage of population.

President Roosevelt and a wave of Democratic Senators and Congressmen won election in 1932 on the promise of a "New Deal" to clean up the economic mess left by the laissez-faire Republicans. The 1933 Glass-Steagall Act mandated the separation of banks, insurance companies and securities firms. Those and many other federal laws stabilized the banking, insurance and securities markets.

Conservatives like President George W. Bush's grandfather Prescott Bush never forgave President Franklin Roosevelt for pushing the 1933 Glass-Steagall Act and other financial reform acts through Congress during the 1930's New Deal Era. Conservatives have never stopped their push to return the American financial system to the unregulated "anything goes" era of the 1920's.

Ronald Reagan finally led the conservative "no government regulation" movement to power in 1980 proclaiming faith in corporations and mistrust of government. That conservative philosophy of "deregulation" has dominated American politics for the past 30 years. Starting with Pres. Reagan conservatives have systematically dismantled the "New Deal" restraints on "anything goes" risk taking in American banking and investment systems.

In 1999, President Clinton signed the Financial Services Modernization Act passed by a Conservative controlled Congress, which tore down Glass-Steagall's reforms by removing the walls separating banks, securities firms and insurers. Republicans and blue dog Democrats, in their blind faith of unregulated markets, pushed through that landmark deregulation legislation, which was sponsored by then U.S. Senator from Texas, Phil Gramm.

Conservatives hailed the Financial Services Modernization Act (also identified as the Gramm-Leach-Bliley Act) as the answer to making the country’s financial institutions "competitive" by removing the New Deal walls between banking, investment and insurance companies. On hindsight, that piece of deregulation allowed the home mortgage bubble to inflate and burst over the next eight years.

The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing on Sept. 18, 2008 that, in the words of one participant, “scared the hell out of everybody.”
Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.

The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.

Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.

Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.

“How,” he wondered aloud, “did we get here?

Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the Gramm-Leach-Bliley Act.
Before the Gramm-Leach-Bliley Act, banks, credit unions and S&Ls issued home mortgages that they retained on their books as an asset. The lenders had a stake in responsibly managing and receiving full repayment on the loans from credit-worthy borrowers.

But after the Gramm-Leach-Bliley Act deregulation, mortgages began to be sold to firms that cobbled the loans together to create mortgage-backed securities, or mortgage bonds. Loans to the least credit-worthy borrowers carried the highest risk but gave the highest returns, so banks and other institutional investors bought loads of them. Except no one was policing or even gave a second thought to the creditworthiness of the borrowers. Exactly the conditions behind the the 1929 Black Thursday crash.

Republican deregulation has cause other turmoil for American investors and consumers.

In December 2000, the Republican controlled Senate Banking Committee, led by Phil Gramm, pushed through another piece of deregulation on electronic commodities trading that became know as the "Enron loophole." The "Enron loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation.

The so-called "Enron Loophole" deregulation legislation allowed Enron to speculatively exploit and manipulate electricity commodity trading in California energy markets in the summer of 2001, spawning artificial electricity shortages, steep climbs in electricity prices and rolling brownouts across California that cost California taxpayers hundreds of millions dollars.

"Enron Loophole" deregulation allowed the Enron energy company to became another bubble that exploded like a grenade. Enron collapsed becoming a smoking ruin that burned off $60 billion of investor money. Many of Enron's 20,000 employees lost their jobs and their retirement savings when the company collapsed.

Enron's collateral damage spread to Arthur Andersen, Enron's outside auditor. Arthur Andersen also collapsed throwing tens of thousands of its employees out of work and evaporated many billions of dollars more of investor money.

The "Enron Loophole" legislation was created and attached to U.S. Senate legislation in December 2000 by Senator Phil Gramm at the behest of Enron executives. In fact, internal Enron documents, which were released in 2002 in ligation against Enron excutives, revealed that the Houston-based company wrote the "Enron Loophole" deregulation legislation for Gramm.

In 2006, the “Enron Loophole” allowed Amaranth Advisers hedge fund to shift its trades from the regulated New York Mercantile Exchange (NYMEX) to the unregulated Intercontinental Exchange (ICE) in Atlanta.

That let Amaranth corner the natural gas market, betting that futures prices would rise. Natural gas prices did bid to lofty heights for a period of time, which it turn pushed home heating cost to lofty heights. But the hedge fund quickly lost about $6 billion of investor money and imploded as natural gas prices fell to a two-year low in September 2006.

The Federal Energy Regulatory Commission and the Commodity Futures Trading Commission charged that Amaranth manipulated prices paid in the physical natural gas markets, but who ultimately paid the price for that high risk speculative Wall Street trading? Only homeowners trying to heat their homes with outrageously priced natural gas and investors.

The “Enron Loophole” has allowed a speculative free-for-all that helped drive crude oil and gas prices speculative highs off and on over the last decade. As much as 99 percent of the market for U.S. premium crude oil is dominated by big financial firms, hedge, pension and index funds seeking short-term profits from oil's rise. Some analysts believe that as much as 50% of the price of crude oil has been speculative froth at times.

In May 2008 the Commodity Futures Trading Commission, which normally keeps investigations confidential, said in a statement that it was "taking the extraordinary step of publicly disclosing an investigation into market manipulation because of the unprecedented [commodity] market conditions."

In addition to commodity trading manipulation, regulators are concerned that companies may be reporting inventory levels that benefit their own trading positions but that may not be accurate, people familiar with the regulators' thinking say.

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