While big banks and Wall Street investment firms (now usually one and the same) are stepping up their fight to kill a new consumer financial protection agency, progressive groups and author Nomi Prins last week launched a campaign to put the banks and financial system on trial – and press for reform, each in their own way.
Shortly before Prins spoke about her book, It Takes a Pillage, with other activists at a Demos-sponsored panel at the Economic Policy Institute, I attended a rally sponsored by Jobs With Justice outside the Mandarin Hotel, where about 60 or so protesters marched outside a meeting of the Financial Services Roundtable, a lobbying group for leading financial institutions that received over $200 billion in direct bailout funds.
With chants of “Hey big banks, where’s our dough?” and “FSR, you can’t hide, we can see your greedy side,” they marched around the hotel, then launched guerilla theater.
With activists dressed up in top-hats and cigars as banking CEOs from Wells Fargo, Bank of America and Citigroup, they were put “on trial” for alleged crimes of squandering bailout funds, wrecking the economy, and opposing workers’ rights.
The activists then pasted up poster-size “indictments” of the wrongdoing of the banks outside the glass windows of the hotel’s main enterance that were locked against them coming inside. Take a look at the protest:
The mock trial provides a biting, informative overview of how the major banks took the bailout money then denied credit to hundreds of businesses, lobbied against the Employee Free Choice Act and financial reform, and took actions that led to the firing of thousands of workers, including their own.
But the bankers themselves were meeting downstairs in the hotel’s ballroom, seemingly far removed from the protest, while dark-suited security blocked anyone without the proper credential from going down to the meeting that wasn’t publicized on the financial trade group’s website.
And the Jobs with Justice protest got little media notice, even from progressive outlets, although an action scheduled for next month in Chicago, involving a broader, more visible array of labor groups, against the American Bankers Association could prove to help raise visibility for the issue. As Progress Illinois reported recently:
In October, the American Bankers Association (ABA) will hold its annual convention in Chicago, which will feature appearances by conservative commentators such George Will and former House Speaker Newt Gingrich. When the financiers arrive, however, a coalition of community groups and labor organizations will be there to greet them. The Chicago-based National People’s Action, the SEIU Illinois Council, and over 30 other affiliated organizations are planning a three-day demonstration outside of the gathering at which they will ‘demand an end to unfair predatory banking practices that enrich banks while continuing to hamper an economic recovery.’
National labor groups will also attend. From a press release:
“The nation’s top bankers need to see that working families are furious and outraged,” said Tom Balanoff, president of the SEIU Illinois Council. “The mess these bankers created continues to force working families into the unemployment line and into home foreclosures. Meanwhile, the banking industry lobby in Washington stifles efforts to stem these foreclosures. What have these bankers done to deserve the billions in bonuses so many of them received? We will not allow this convention to become a big party for the nation’s banks. They have done nothing to celebrate.”
But for the full story, essentially a document that could be used in any real trial of Wall Street titans, it’s worth looking at that powerful, detailed new book, It Takes A Pillage: Prins doesn’t just explain in gory detail how we got into this mess she calls the Second Great Bank Depression, while noting taxpayers are on the hook for a total of $17 trillion in payouts, loans and guarantees – more than the cost of all American wars in history.
She also criticizes the Obama administration for continuing much of the sloppy oversight and misspending of bailout funds that started with the Bush administration, and promoting policies that have made giant financial institutions even riskier and more “too big to fail.”
Although the atmosphere inside the meeting room at Economic Policy Institute was more cerebral than in the streets outside the hotel, her anger and those of leaders of such groups as Americans For Financial Reform was just as heartfelt. As Prins told the audience at EPI (hat tip to ourfuture.org):
As Prins said, even though Wall Street as well as Main Street was burned badly by the trading of derivatives, credit default swaps and other exotic financial instruments — including bundles of what turned out to be fraudulently issued mortgages — we now have “more risk this year, more profits, more bonuses, more consumer losses. There is no change there, except to worsen.”
Heather Booth of Americans for Financial Reform noted that progressives didn’t present a united front to oppose some of the earlier Wall Street lobbying victories this year, such as its defeat of “cram-down” legislation that would allowed mortgage relief, but she’s hoping that will start to change now. “It’s a David and Goliath battle,” she said. “But we know how that turned out.”
Goliath, though, was slow, clumsy and stupid – and didn’t spend tens of millions to spruce up his image with lobbyists. Indeed, on its own website, the Financial Services Roundtable presents itself as a champion of reform, seeming to praise the principles behind President Obama’s recent call for reform:
Roundtable Supports Effective, Bold Regulatory Reform
Washington, D.C. — September 14, 2009— The Financial Services Roundtable supports the President’s call today for financial reform for this year. Bold, effective and comprehensive reform is long overdue.
“While there will be differences on specifics of how to best improve the regulatory structure, it is imperative that we take action in a timely manner,” said Steve Bartlett, President and CEO for the Roundtable.
The Roundtable supports the President’s goals to establish a systemic risk regulator and a failure resolution authority, but opposes the creation of a separate consumer protection agency.
“The better answer to consumer protection is to amend the charters of the existing prudential regulators, giving consumer protection parity with safety and soundness regulation,” Bartlett said.
Scott Talbott, Senior Vice President for Government Affairs attended the speech in New York.
“The industry is committed to working with regulators and Congress to find the most effective way to modernize the regulatory system to prevent this from happening again,” Talbott said.
It will be up to progressives, armed with the information in books like It Takes A Village, to effectively paint a different picture to Congress and the public – and mobilize activists already engaged in the health care fight,to battle for changes that could affect the future of the economy.
Here’s how Nomi Prins skeptically portrayed what’s happening a year after the economy started to implode and the limits of Obama’s proposed reforms to tighten regulation on Wall Street, during her appearance on Democracy Now!:
Well, most of what Obama was saying to the Wall Street leaders who were in that room was kind of help us do what we need to do. You know, you cut down your bonuses, you take care of helping homeowners renegotiate their mortgages. Kind of, we’re not going to make you do it. We will probably pass few reforms that will do something to that effect, but, you know, could you guys help us out restrain you?
And just that very notion and the notion that because Wall Street is healthier than it was last year after receiving something like $17.5 [trillion] worth of guarantees, of cheap loans, of other kinds of subsidies, of backup for in case they lose money again, the fact that they’ve returned to some kind of health and normalcy, as Obama put it, rather than looking at what Main Street is actually going through and how it has declined in terms of its own economic health, really just places the emphasis on the wrong group of people.