The Voyager

Regardless of what anyone thinks about the Occupy Wall Street movement, there is at least one idea the movement embodies that I would hope everyone can get behind: the idea that our system is badly broken.

Occupy Wall Street is ultimately about wanting something different than the bloated, repetitive, greedy, self-serving, phony system that we have.

Can anyone honestly say that the way Wall Street functions or the way the American political system operates is fair, effective and beneficial to our society?

It’s no wonder a massive, growing number of people have become cynical and apathetic toward American politics — the system is corrupt and, perhaps, seems hopeless.

But while the Occupy Wall Street movement may contain a disparate smattering of viewpoints and agendas, what the movement has shown is the sincere hope for something different.

This is the final installment of my series on the Occupy Wall Street movement. In the past four installments, I have tried to meticulously detail many of the problems with Wall Street and Washington. This time I want to examine what the average American can do about it.

Corporate influence

If you don’t realize that practically every facet of American democracy has been bought and sold to corporate interests then you simply aren’t paying attention.

The voices of average Americans are drowned out by torrential monsoons of corporate cash in the form of lobbying and campaign contributions that are deluging the political process.

One of the most important goals for fixing American democracy has to be to limit the power corporations exert over our political process.

There’s nothing wrong with a corporation in and of itself. Almost every form of business is incorporated under U.S. law in some form or another.

However, the problem is that the interests of the largest corporations operating in America do not necessarily reflect the interests of the average American or the community in which she or he lives.

A corporation is beholden to the bottom line. Generally speaking, a corporation must do everything in its power to maximize profits and appease its shareholders regardless if the pursuit of such aims does not take into account what is best for the community at large.

And let’s not kid ourselves — corporate lobbying is nothing more than legalized bribery, plain and simple.

According to the Center for Responsive Politics, from 1998 to 2010, lobbyists spent over $32 billion to influence our political system. And this figure does not even include campaign contributions.

Does anyone really think corporations and special interests groups are spending billions of dollars on politicians and expecting nothing in return? They spend the money because it gets results, such as members of Congress voting certain ways on bills or drafting specific legislation.

That’s when the lobbyists aren’t actually writing the bills themselves. Time and again, corporate lobbyists are directly writing the legislation designed to deregulate their industries. It’s time for this to stop.

And when it comes to campaign contributions, we have entered a time in American politics when more money than ever is spent to buy politicians. The candidates with the most money almost always win.

Over 90 percent of congressional elections are won by the candidate who raised the most money for his or her campaign, according to the Center for Responsive Politics, and in the 2010 midterm election, almost $4 billion was spent by congressional candidates alone.

I think almost everyone on both sides of the aisle would agree — whether it be Democrat, Republican, independent, Tea Partier or Occupy Wall Street protestor — corporate and special interest money is a crisis that has completely corrupted the democratic process.

Remove the money

One idea that has been proposed is to either completely remove or at least limit the flow of corporate money into our political process.

Even Teddy Roosevelt once said, “All contributions by corporations to any political committee or for any political purpose should be forbidden by law.”

Unfortunately this change would be extremely difficult to achieve, but the nonpartisan group Free Speech for the People has proposed a constitutional amendment to do just this and, so far, has gathered 250,000 signatures.

Senator Tom Udall (D – Colorado) has also proposed a constitutional amendment to limit corporate and special interest money in our elections. A petition in support of this amendment has gathered 122,000 signatures so far.

However, part of the problem with this idea is that many people consider giving money to politicians to be a form of free speech — even the ACLU supports this notion.

In the 1975 Supreme Court case Buckley v. Valeo, the court did, in fact, rule that spending money to influence elections is a form of constitutionally protected free speech.

I can see certain situations in which the act of giving money could be interpreted as freedom of expression, such as donating money to a cause or a charity you support.

However, I can also see a scenario in which the law would restrict such an expression.

For example, I certainly cannot claim it is my First Amendment right to funnel money to a terrorist organization such as al Qaeda.

The simple fact is that when money exchanges hands it enters the world of commerce more than the world of expression, and the law can and does place certain restrictions on such transactions. So, why not draft either legislation or a constitutional amendment to put limits on campaign money?

End corporate personhood

We run into another problem with this idea. Under current U.S. laws, corporations are considered to be legal persons with constitutional protections such as free speech.

I won’t go into the long history of corporate personhood came to be (though you can read what I have written on the subject in the past), but the courts have created precedent time and time again to suggest a corporation has the same rights that natural living persons have under the 14th Amendment.

The 14th Amendment was originally adopted after the Civil War to ensure the equal protection and citizenship of former slaves, but it has since been used in a far overreaching manner to protect the interests of corporations.

And in keeping with this notion that corporations are people, in 2009, the Supreme Court case Citizens United v. FEC gave corporations the right to spend unlimited amounts of money campaigning on behalf of candidates.

A growing number of people are beginning to find this notion of corporate personhood absurd.

Ending corporate personhood is another issue that could be solved with a constitutional amendment. In fact the same constitutional amendment proposed by Free Speech for the People and the one proposed by Sen. Udall seek to do just this: end corporate personhood and limit corporate spending.

Granted, constitutional amendments are not easy things to achieve. They require broad support, but I think in the face of such a defective political system, the American people would be more than willing to support such ideas in order to restore democracy back into the hands of the people.

So, we can start by calling our Congress members to tell them we want an end to the ridiculous notion of corporate personhood and the corporate dominance of the democratic process.

Call to Action

But it’s also time for the Occupy Wall Street movement to take a page out of the Tea Party book and start organizing to get specific candidates elected who share their interests.

Protesting is all well and good, but if it doesn’t result in political actions then it hasn’t accomplished much more than instilling some good ideas into the American zeitgeist.

People are slowly waking up to the fact that their democracy has been sold to the highest bidder, and the Occupy Wall Street movement has been largely successful in highlighting this.

You don’t have to join the protestors across the country and camp out in city parks to agree with the notion that our American political process has become a bloated, corrupt system that favors the interests of the super-rich and largest corporations.

The Occupy Wall Street movement has become a cultural phenomenon, a clarion call to evolve our ideas and bring badly needed reform to a system that has been slowly choking the life out of the American Dream for over 40 years.

The main thing we can do as average Americans is to simply pay attention, get involved and start demanding a crop of political candidates who are not beholden to the interests of Wall Street, massive corporations and the wealthiest Americans.

There are plenty of reasons to be cynical when it comes to American politics. But it’s time to turn that cynicism into optimism. American democracy is certainly broken, but it is not beyond repair.

And that’s what the Occupy Wall Street movement is really about, and I hope that’s a message with which we can all agree regardless of race, creed or political ideology.

W. Paul Smith
Opinions Editor

Occupy Wall Street Series:  Part 1   Part 2   Part 3   Part 4   Part 5

Related Posts:

• The American Dream works best for the super-rich
• How Washington does the bidding of Wall Street
• Wall Street should be indicted, not just occupied

“It’s called the American Dream because you have to be asleep to believe it.”
—George Carlin

The “rags to riches” mythology of Horatio Alger was always better suited for fiction than reality, but such “rugged individualism” of lore has now become increasingly dubious and seemingly preposterous in the face of a fading American Dream.

For the past few decades, the policies coming from Washington, combined with the high stakes gambling of Wall Street, have contributed largely to a country that has become beholden to the interests of the mega-rich and megalithic corporations at the expense of the American community at large.

Those familiar with the Occupy Wall Street movement have probably heard the protesters refer to themselves as the “99 percent.” The “99 percent” refers to the top 1 percent of the super-rich elite in this country as opposed to everyone else.

It also refers to the huge, widening gulf of disparity growing between the rich and poor in this country while the middle class shrinks.

This is the fourth and penultimate installment of my series on the Occupy Wall Street movement. In the previous installments I have explored the shady criminal practices of Wall Street and how Washington enables such behavior through deregulation.

In this installment, I would like explore where these policies have left the average American.

Income inequality 

The top 1 percent owns 42 percent of the nation’s overall wealth (when counting income as well as assets) according to a study done for New York University by economist Edward N. Wolff.

And according to a study by the Center on Budget and Policy Priorities, when it comes to pure income, the top 1 percent owns about 17 percent the nation’s income, the highest level since 1979, “while the share going to the middle one-fifth of Americans shrank to its lowest level during this period (14.1 percent).”

Forbes magazine reported that the net worth of the top 400 richest families in America alone is $1.37 trillion, which is more than the bottom 60 percent in this country combined.

Income inequality is at all-time high in the United States, as a study by Berkeley Professor Emmanuel Saez found income inequality to be at its highest rate since 1913 (when the income tax was instituted).

Furthermore, Saez states in his study, “The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007.”

A report released last week by the Congressional Budget Office found that, since 1979, the top 1 percent saw income grow by 275 percent, whereas the average middle class income grew by less than 40 percent, and the bottom 20 percent of the population’s income grew by only 18 percent.

The report concluded: “As a result of that uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979.”

The Organization for Economic Cooperation and Development found that the United States has the fourth overall worst income inequality of developed countries in the world. Only Turkey, Mexico and Chile have worse income inequality. 

Wage stagnation

But as the rich keep getting richer, the middle class is shrinking and the poor are getting poorer.

According to the Economic Policy Institute, in 1965, the average CEO earned 24 times what the average worker made, and by 2006, the average CEO earned 262 times the pay of the average worker.

Also, the Bureau of Labor Statistics found that union membership has fallen to just 12 percent of workers, which is one of the lowest rates of all developed countries according to the World Economic Forum. In 1983, union membership in America was 20 percent. In 1954 it was almost 30 percent.

By studying data from the Bureau of Labor Statistics, Les Leopold, the author of the book “The Looting of America,” found that wages for the average worker in the United States have stagnated and, at times, even fallen over the past several decades while, at the same time, productivity has risen.

Leopold concluded: “By 2007, real wages (in today’s dollars) had slid from their peak of $746 per week in 1973 to $612 per week — an 18 percent drop. Had wages increased along with productivity, the current average real wage for nonsupervisory workers would be $1,171 per week-$60,892 per year instead of today’s average of $31,824.”

So, for the past several decades, the lower and middle class have been getting paid about the same, and at time even less, for more work, while the upper-management’s compensation has skyrocketed.

The U.S. Census Bureau reports that the median household income in America is $50,221.

But almost half of the members in Congress count themselves as among the rich in this country. According to the Center for Responsive Politics, the median income for a member of Congress is $911,510, and 261 members are millionaires. Is it any wonder why many of the the policies coming from Washington the past few decades have favored the rich?

Poverty and homelessness

Meanwhile, more Americans are now on food stamps than any other time in our nation’s history, some 43 million people or more than 14 percent of the population.

And according to the Census Bureau, a record number of Americans are now living in poverty: 46.2 million people, over 15 percent of the population, which is the highest number the bureau has found since it began studying poverty rates 52 years ago.

A new study conducted by the Foundation for Child Development also found that child poverty has reached its highest level in 20 years, with nearly 22 percent of children now living in poverty in the United States.

The report found that 15.6 million children are estimated to be living in poverty, and that as many as 500,000 children are homeless.

The most recent Annual Homeless Assessment Report to Congress found that, across the country, approximately 650,000 people are homeless, and approximately 1 million people live in homeless shelters.

Tax aversion

Well, the rich may be getting richer, but at least they pay their fair share in taxes, right? Not hardly.

The top tax bracket in this country (those making over $379,150) is supposed to be 35 percent. Even though this tax rate is one of the lowest in the history of our country, the super-rich don’t actually pay anywhere near that.

Billionaire Warren Buffett wrote a now-famous piece for the New York Times this summer showing that he actually only paid 17.4 percent in taxes in 2010, far below the 36 percent his far less wealthy employees paid.

And Buffett’s experience is about average. According to the IRS, the top 1 percent now has an average tax rate of about 17 percent. In 1995, the average tax rate for the mega-rich was about 30 percent. 

Why do the rich pay so little? That’s because most of their income (over 80 percent according to the IRS) comes from long-term capital gains, dividends and carried interest, all of which are taxed at a maximum rate of 15 percent.

So, while the rich may pay the majority of the taxes in this country, they are not paying their fair share. Much of the same can be said for corporations.

The corporate tax rate for the largest corporations in the United States is 35 percent. It’s one of the highest corporate tax rates in the world — or it would be, if American corporations actually paid their taxes.

With the clever use of subsidies, tax benefits, foreign subsidiaries and overseas tax havens the effective corporate tax rate in 2008 was just 5.3 percent according to a report by Forbes Magazine.

In 2009, General Electric raked in over $10 billion in profits but paid exactly zero in taxes. Bank of America not only paid zero in taxes but actually received a tax benefit of $1 billion.

And these corporations are not alone. Boeing, Citigroup, Exxon-Mobil, and Wells Fargo also paid no federal income taxes, to name just a few companies.

A study by the Government Accountability Office found that two out of every three American corporations paid no federal income taxes from 1998 to 2005.

So, not only are corporations not paying their fair share, but some are simply paying no share at all.

Something is seriously wrong here, folks. Every statistic shows that over the past several decades, the gap between the rich and poor is widening, the middle class is shrinking and the American Dream is fading.

The great Hunter S. Thompson often used to write about what he referred to as “The Grim Slide” — the concept that the American ideals we once held so high were slipping away, becoming awash in a country bought and sold to the highest bidder. But what Thompson feared so many years ago has only exacerbated.

However, I still think there’s light at the end of the tunnel, and next week, in my final installment of this series, I will explore what, if anything, can be done to reverse the slide.

W. Paul Smith
Opinions Editor

Occupy Wall Street Series:  Part 1   Part 2   Part 3   Part 4   Part 5

Cartoon courtesy of Andy Marlette/amarlette@pnj.com

Related Posts:

• How Washington does the bidding of Wall Street
• American democracy is broken but not beyond repair
• Wall Street should be indicted, not just occupied

Everybody knows the worst kept secret in Washington is that many, if not most, politicians work more at the behest of the interests of Wall Street than the interests of the American people.

It’s not just hyperbole. It’s not a conspiracy. It’s simply business as usual.

This is the third installment of my series on the Occupy Wall Street movement, the protest movement that has grown around the country and the world expressing dissatisfaction with the status quo and the way Wall Street operates.

I promised last time to explore the collusion between Washington and Wall Street and to try to explain how politicians paved the way for the financial crisis with their mantra of deregulation.

Wall Street lobbying

According to Wall Street Watch, a non-partisan consumer advocacy group, the financial services industry spent over $5 billion to peddle its lobbying influence in Washington from 1998 to 2008, 55 percent of which went to Republicans and 45 percent went to Democrats.

In 2007, the year before the financial crisis, there were approximately 3,000 officially-registered Wall Street lobbyists who influence policy makers in Washington — that’s five lobbyists for every one member of Congress.

Wall Street is also the lead contributor to presidential campaigns. In 2008, Wall Street firms made up the top contribution slots of both the Obama and McCain campaigns.

Goldman Sachs was the largest private contributor to Obama’s campaign and the second largest contributor overall, while JPMorgan Chase, Citigroup, Morgan Stanley and UBS AG all made Obama’s top 20.

The top contributor to the McCain campaign was Merrill Lynch with JPMorgan Chase, Citigroup, Morgan Stanley, and Goldman Sachs taking the next top slots, and Bank of America, Wachovia, UBS AG and Lehman Brothers all made the top 20.

Through the revolving door

There’s also an endless revolving door between Wall Street and Washington.

President Clinton’s Treasury Secretary Robert Rubin had once worked at Goldman Sachs and after leaving office, went to work for Citigroup, even serving as the chairman of the company from 2007 to 2009.

Larry Summers, who succeeded Rubin as Treasury Secretary, later worked as managing director for the hedge fund D. E. Shaw and, in 2008, was paid $2.7 million in speaking fees by Wall Street firms such as JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch.

Henry Paulson, who served as Treasury Secretary under President George W. Bush, had worked at Goldman Sachs since 1974 before taking office, even serving as the company’s chairman and CEO from 1998 to 2006.

Current Treasury Secretary Timothy Geithner worked as the head of the New York Federal Reserve before taking office. And who took Geithner’s place at the New York Fed? That would be William C. Dudley, the chief economist for Goldman Sachs from 1984 to 2007.

Geithner’s current Chief of Staff is Mark Patterson, who before taking office worked as a lobbyist for Goldman Sachs.

How about Gary Gensler, the current chairman of the Commodity Futures Trading Commission, the federal regulatory agency tasked with regulating futures and options markets?

Gensler spent 18 years of his life working for — yep, you guessed it — Goldman Sachs.

Is it really any wonder why these Wall Street firms got the largest government bailout in history following the financial crisis of 2008? And the Obama administration has surrounded itself with the very same architects of said bail-out.

Now let’s look at some of the ways Washington has done the bidding of Wall Street.

Repeal of Glass-Steagall

In 1998, the banking giant Citicorp merged with the insurance giant Travelers Group to create Citigroup. At the time, this merger was illegal under the Glass-Steagall Act of 1933.

Congress passed the Glass-Steagall Act after the Great Depression, in part, to create firewalls between commercial banks, investment banks and insurance companies.

Part of the idea of this act was to prevent conflicts of interest that could arise from lending institutions using their customers’ credit to make risky investments. It also hoped to prevent the consolidation of these industries into megalithic investment companies.

But in 1999 Congress passed the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act, which repealed key provisions of the Glass-Steagall Act.

Congress drafted and passed this legislation, in part, to retroactively make the Citigroup merger a legal consolidation. It also paved the way for endless Wall Street mergers and acquisitions to come.

In the wake of the financial crisis of 2008, many have cited the repeal of the Glass-Steagall Act as the catalyst that created the legal framework for investment banks becoming “too big to fail.”

Leverage ratios

In 1975, the Securities and Exchange Commission, the federal regulatory agency tasked with enforcing securities laws, instituted what was known as the “net capital rule,” a financial regulation that, among other things, dictated the leverage ratio of lending institutions.

Leverage is the ratio of a bank’s debt or assets to a bank’s equity, basically meaning how much cash they keep on hand in accordance with how much cash they borrow.

The SEC used to cap the leverage ratio at 12-1. But in 2004, the SEC succumbed to pressure from the financial services industry’s campaign, led by Goldman Sachs, to authorize investment banks to develop their own capital requirements.

In the run-up to the financial crisis, some of the largest investment banks were operating with a leverage ratio of 40-1, meaning for every $40 in assets, there would only be $1 to cover potential losses.

The Financial Crisis Inquiry Commission’s report noted that “less than a 3 percent drop in asset values could wipe out a firm.”

The FCIC report characterized the situation as such using the investment bank Bear Stearns as an example: “Bear Stearns had $11.8 billion in equity and $383.6 billion in liabilities and was borrowing as much as $70 billion in the overnight market. It was the equivalent of a small business with $50,000 in equity borrowing $1.6 million, with $296,750 of that due each and every day.”

It was another egregious example of government regulators failing to do their job and, instead, surrendering to pressure from the financial services industry and their lobbyists.

Deregulating derivatives

As I explained in the last installment, it was Wall Street’s investment in the derivatives market that perhaps contributed to the financial crisis more than anything else.

Also recall that in 2002, Warren Buffett referred to derivatives as “financial weapons of mass destruction,” and as “time bombs” that could be “potentially lethal.”

But even before Buffett’s dire warning,  in 1998, Brooksley Born, who was the then-head of the Commodity Futures Trading Commission, pleaded with Congress to allow the CFTC to regulate the derivatives market.

Born warned Congress about the risk derivatives “might pose to the U.S. economy and to financial stability around the world.”

But Born was rebuffed in her efforts by none other than Alan Greenspan (who has been wrong about nearly every prediction he ever made), then-chairman of the Federal Reserve, who told Congress, “the degree of supervision of regulation of the over-the-counter derivatives market is quite adequate to maintain a degree of stability in the system.”

Greenspan was joined by then-Treasury Secretary Robert Rubin to applaud the stability of derivatives and fight against regulation. Of course, they would prove to be disastrously wrong and Born would prove to be presciently correct.

However, Congress didn’t listen to Born, and in 2000, it passed the Commodities Futures Modernization Act, which ensured the deregulated of the derivatives market, and laid the groundwork for the creation of the complex, unregulated financial derivatives instruments such as collateralized debt obligations and credit default swaps that were so instrumental in the financial collapse of 2008.

When it comes to Wall Street, Washington should act as watchdogs with government oversight to protect the American people against these financial schemes and machinations instead of kowtowing to its corporate sponsors.

It may be business as usual, but this business model has become dangerously unsustainable. And this is part of what the Occupy Wall Street movement is about, to begin to untangle the stranglehold Wall Street has on our democratic process and return Washington to the people.

W. Paul Smith
Opinions Editor

Occupy Wall Street Series:  Part 1   Part 2   Part 3   Part 4   Part 5

Cartoon courtesy of Andy Marlette/amarlette@pnj.com

Related Posts:

• The American Dream works best for the super-rich
• Wall Street should be indicted, not just occupied
• The Electoral College is absurd and should be abandoned
• American democracy is broken but not beyond repair
• How Wall Street swindled the American people

The Occupy Wall Street protests that started in New York just a few short weeks ago have now ballooned across the country into a full-fledged movement, with events happening so far in approximately 400 cities in 48 states and a local group even springing up in Pensacola and at UWF.

The thrust of the protests is aimed at corporate greed and shady Wall Street practices.

A protest movement begins

Granted, all protests movements will have elements that begin to look like a circus, and those movements that start on the left tend to feel somewhat like music festivals such as Burning Man or Bonnaroo at times.

However, while these protests occasionally feel a bit disjointed and clunky, I think they can be seen as a shot across the bow to the “banksters” and white-collar criminals that caused the worst financial crisis in history, bringing the world’s economy to the brink.

So, in solidarity with this movement, I have decided to write a series on the issues highlighted by the Occupy Wall Street movement, specifically examining the criminality and unethicality that has become so pervasive on Wall Street, the nexus of collusion between Wall Street and Washington, and where the American people stand after decades of such shady policies and practices.

In this first installment I hope to demonstrate that what took place in the lead up to the financial collapse of 2008 was, in fact, criminal.

Crimes were committed

Fraud is fraud, whether it’s committed by a small-time crook or a major Wall Street player. And securities fraud is a crime punishable by a prison sentence.

However, not a single Wall Street criminal has spent a day in jail for the role he or she played during the financial crisis.

When it comes to Wall Street crimes, the U.S. Justice Department has consistently shown it is not interested in throwing the criminals in jail.

Instead, it opts for the Securities and Exchange Commission, the federal regulatory agency tasked with enforcing securities laws, to negotiate fines and settlements to be paid when laws are broken.

Securities laws are extraordinarily complex, as are the schemes and crimes often perpetrated by Wall Street. So without descending into a lawyerly diatribe of the legal minutia, I will focus in this piece on some of the specific settlements Wall Street and its ilk paid out associated with the financial crisis.

The Financial Crisis Inquiry Commission, a government appointed commission tasked with investigating the causes of the financial crisis, said in their 2010 report that the crisis was caused by “systemic breaches in accountability and ethics at all levels.”

Furthermore, it stated, “financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective.”

In the next installment of this series I will attempt to better explain just how some of the Wall Street schemes worked, but suffice it to say for now, extremely volatile and risky mortgages were at the heart of the collapse.

In most cases, banks sold mortgages to people they knew couldn’t afford them and then sold off those mortgages to investment firms which repackaged them into “mortgage-backed securities,” allowing other investors to make boat-loads of quick money on disguised toxic assets while hyper-inflating the financial bubbles.

However, in many of the cases, the investors had no idea their money was going into extremely high-risk toxic deals, and very often these investors were gambling the retirement nest eggs of state workers’ pension funds, such as teachers, police officers, firefighters, etc.

Fines instead of prison

In June of this year, JPMorgan Chase, a multinational banking corporation, paid the SEC a settlement of $151 million on charges that the bank intentionally misled investors in a risky mortgage bond deal.

In 2010, Goldman Sachs, a multinational investment banking and securities firm that had its greedy hands in almost every cookie jar of the financial crisis, reached a $550 million settlement with the SEC for also defrauding investors with toxic mortgage-backed securities.

Though it was the largest single penalty any Wall Street firm had ever paid to the SEC, it still only represented about 4 percent of the profits the company made in 2009.

These are just a smattering of the settlements paid for crimes committed.

But this doesn’t even begin to compare to a settlement deal currently in the works and being finalized by many states’ attorneys general and the Department of Justice, letting all the banks involved with the toxic mortgage frauds off the hook for a measly $20 billion.

The deal would allow all the major banks that engaged in these dirty practices, such as Citigroup, Bank of America, JPMorgan Chase and Wells Fargo, to be essentially granted immunity from criminal prosecution for what collectively amounts to a drop in the ocean of windfall profits they made swindling the American people.

To put this in perspective on just how small this settlement is compared to the crimes committed, the Florida State Board of Administration, which handled investments for state workers’ pensions, lost $62 billion alone in 2008, largely by investing in high-risk mortgage-backed securities.

That’s one pension fund’s investments from one state with losses that total three times what this settlement deal is offering (although it is starting to look like the FSBA was not totally unaware of the risk).

And to put this settlement deal into even broader perspective, the International Monetary Fund estimates losses from the mortgage-backed-securities-fueled financial crisis to be in the trillions.

When the entire cabal of bankster criminals is allowed to get off for only $20 billion, there’s simply no incentive for Wall Street not to continue the status quo and keep orchestrating criminal and unethical financial schemes.

The Department of Justice needs to stop acting like a bunch of feckless cowards and start asking for settlement amounts that actually fit the crimes. And then they need to seek criminal prosecutions that come with jail time.

Mark my words, if we started throwing these Wall Street crooks in prison rather than fining them a pittance, you would see a radical drop in securities fraud and unethical behavior.

It’s time to start indicting these bastards on criminal charges and throwing their asses behind bars.

The Occupy Wall Street movement has succeeded in the very least identifying the targets, and I applaud their efforts to bring these issues to light.

Stay tuned for future installments in this series.

W. Paul Smith
Opinions Editor

Occupy Wall Street Series:  Part 1   Part 2   Part 3   Part 4   Part 5

Related Posts:

• How Washington does the bidding of Wall Street
• American democracy is broken but not beyond repair
• The American Dream works best for the super-rich
• How Wall Street swindled the American people