On Oct 3, 2011, at 3:54 PM, Michael Hudson wrote:
> I suggest putting a specific POLICY DEMAND.
> How about "Bankruptcy legislation to free people without jobs from
> student loan debt."
> Or more accurately: "Tax capital gains as high as wages."
> "Remove the tax deductibility of debt."
> "A Public Option for Credit Cards -- lower the rates and penalties."
> Michael Hudson
> On 10/3/11 3:37 PM, "Black, William" <email@example.com
>> I would recommend adding/substituting something along these lines. If we're
>> going to raise the subject of "fraud" we need to give some of the supporting
>> The systemically dangerous institutions (SDIs) are inaccurately called "too
>> big to fail" banks. The administration calls them "systemically important,"
>> and acts as if they deserve a gold star. The ugly truth, however, is what
>> Wall Street and each administration screams when the SDIs get in trouble.
>> They warn us that if a single SDI fails it will cause a global financial
>> crisis. There are roughly 20 U.S. SDIs and about the same number abroad.
>> That means that we roll the dice 40 times a day to see which SDI will blow up
>> next and drag the world economy into crisis. Economists agree that the SDIs
>> are so large that they are grotesquely inefficient. In "good times,"
>> therefore, they harm our economy. It is insane not to shrink the SDIs to the
>> point that they no longer hold the global economy hostage. The ability -- and
>> willingness -- of the CEOs that control SDIs to hold our economy hostage makes
>> the SDIs too big to regulate and prosecute. It also allows them to extort,
>> dominate, and degrade our democracies. The SDIs pose a clear and present
>> danger to the U.S. and the world.
>> It takes a global effort against the SDIs because they constantly put nations
>> in competition with each other in order to generate a "race to the bottom."
>> We are always being warned that if the U.S. adopts even minimal regulation of
>> its SDIs they will flee to the City of London or be unable to compete with
>> Germany's "universal" banks. The result of the race to the bottom, however,
>> as Ireland, Iceland, the UK, and U.S. all experienced is that we create
>> intensely criminogenic environment that creates epidemics of "control fraud."
>> Control fraud -- frauds led by CEOs who use seemingly legitimate entities as
>> "weapons" to defraud -- cause greater financial losses than all other forms of
>> property crime -- combined. Because of the political power of the SDIs and
>> the destruction of effective regulation these fraudulent SDIs now commit
>> endemic fraud with impunity.
>> Effective financial regulation is essential if markets are to work.
>> Regulators have to serve as the "cops on the beat" to keep the fraudsters from
>> gaining a competitive advantage over honest firms. George Akerlof, the
>> economist who identified and labeled this perverse ("Gresham's") dynamic was
>> awarded the Nobel Prize in 2001 for his insight about how control fraud makes
>> market forces perverse.
>> “[D]ishonest dealings tend to drive honest dealings out of the market. The
>> cost of dishonesty, therefore, lies not only in the amount by which the
>> purchaser is cheated; the cost also must include the loss incurred from
>> driving legitimate business out of existence.” George Akerlof (1970).
>> One of the most perceptive observers of humanity recognized this same dynamic
>> two centuries before Akerlof.
>> "The Lilliputians look upon fraud as a greater crime than theft. For, they
>> allege, care and vigilance, with a very common understanding, can protect a
>> man’s goods from thieves, but honesty hath no fence against superior cunning.
>> . . where fraud is permitted or connived at, or hath no law to punish it, the
>> honest dealer is always undone, and the knave gets the advantage." Swift, J.
>> Gulliver’s Travels
>> We are the allies of honest banks and bankers. We are their essential allies,
>> for only effective regulation permits them to exist and prosper. Think of
>> what would happen to banks if we took the regular cops off the beat and
>> stopped prosecuting bank robbers. That's what happens when we take the
>> regulatory cops off the beat. The only difference is that it is the
>> controlling officers who loot the bank in the absence of the regulatory cops
>> on the beat. It is the anti-regulators who are the enemy of honest banks and
>> Top criminologists, effective financial regulators, and Nobel Laureates in
>> economics have confirmed that epidemics of control fraud, such as the FBI
>> warned of in September 2004, can cause financial bubbles to hyper-inflate and
>> drive catastrophic financial crises. Indeed, the FBI predicted in September
>> 2004 that the developing "epidemic" of mortgage fraud would cause a financial
>> "crisis" if it were not stopped. It grew massively after 2004. The
>> fraudulent SDIs (who were far broader than Fannie and Freddie, indeed, they
>> only began to dominate the secondary market in sales of fraudulent loans after
>> 2005) ignored the FBI and industry fraud warnings for the most obvious of
>> reasons -- they were leaders the frauds. The ongoing U.S. crisis was driven
>> overwhelmingly by fraudulent "liar's" loans. Studies have shown that the
>> incidence of fraud in liar's loans is 90% (MBA/MARI 2006) and that by 2006
>> roughly one-third of all mortgage loans were liar's loans (Credit Suisse
>> 2007). Rajdeep Sengupta, an economist at the Federal Reserve Bank of St.
>> Louis, reported in 2010 in an article entitled “Alt-A: The Forgotten Segment
>> of the Mortgage Market” that:
>> "[B]etween 2003 and 2006 … subprime and Alt-A [loans grew] 94 and 340 percent,
>> respectively. The higher levels of originations after 2003 were largely
>> sustained by the growth of the nonprime (both the subprime and Alt-A) segment
>> of the mortgage market."
>> Sengupta's data greatly understate the role of “Alt-A” loans (the euphemism
>> for “liar’s loans”) for they ignore the fact that by 2006 half of the loans
>> called “subprime” were also liar’s loans (Credit Suisse: 2007). It was the
>> massive growth in fraudulent liar’s loans that hyper-inflated and greatly
>> extended the life of the bubble, producing the Great Recession. The growth of
>> fraudulent loans rapidly increased, rather than decreased, after government
>> and industry anti-fraud specialists warned that liar's loans were endemically
>> fraudulent. No one in the government ever told a bank that it had to make or
>> purchase a "liar's" loan. No honest mortgage lender would make liar's loans
>> because doing so must cause severe losses. Criminologists, economists aware
>> of the relevant criminological and economics literature on control fraud, and
>> a host of investigations have confirmed the endemic nature of control fraud in
>> the ongoing U.S. crisis.
>> But the banking elites that led these frauds have been able to do so with
>> impunity from prosecution. Take on federal agency, the Office of Thrift
>> Supervision (OTS). During the S&L debacle, the OTS made well over 10,000
>> criminal referrals and made the removal of control frauds from the industry
>> and their prosecution its top two priorities. The agency's support and the
>> provision of 1000 FBI agents to investigate the cases led to the felony
>> conviction of over 1,000 S&L frauds. The bulk of those convictions came from
>> the "Top 100" list that OTS and the FBI created to prioritize the
>> investigation of the worst failed S&Ls. In the ongoing crisis -- which caused
>> losses 40 times larger than the S&L debacle, the OTS made zero criminal
>> referrals, the FBI (as recently as FY 2007) assigned only 120 agents
>> nationally to respond to the well over one million cases of mortgage fraud
>> that occurred annually, and the OTS' non-effort produced no convictions of any
>> S&L control frauds. OTS' sister agencies, the Fed and the OCC, have the same
>> record of not even attempting to identify and prosecute the frauds. The FDIC
>> was better, but still only a shadow of what it was in fighting fraud in the
>> early 1990s. If control frauds can operate with impunity from criminal
>> prosecutions, then the perverse Gresham's dynamic is maximized and market
>> forces will increasingly drive honest banks and firms from the marketplace.
>> The Financial Crisis Inquiry Commission reported on the results of the Great
>> Recession that was driven by this fraud epidemic:
>> "As this report goes to print, there are more than 26 million Americans who
>> are out of work, cannot find full-time work, or have given up looking for
>> work. About
>> four million families have lost their homes to foreclosure and another four
>> and a half million have slipped into the foreclosure process or are seriously
>> behind on their
>> mortgage payments. Nearly $11 trillion in household wealth has vanished, with
>> retirement accounts and life savings swept away. Businesses, large and small,
>> have felt the sting of a deep recession."
>> It is the fraudulent SDIs that are the massive job killers and wealth
>> destroyers. It is the Great Recession that the fraudulent SDIs produced that
>> caused most of the growth in the federal deficits and made the fiscal crises
>> in our states and localities acute. The senior officers that led the control
>> frauds are the opposite of the "productive class." No one, without the aid of
>> an army, has ever destroyed more wealth and dreams than the control frauds.
>> It is past to hold them accountable, to help their victims recover, and to end
>> their ongoing frauds and corruption that have crippled our economy, our
>> democracy, and our nation. jj
>> Bill Black
>> From: David DeGraw [AmpedStatus@AmpedStatus.com
>> Sent: Monday, October 03, 2011 12:33 PM
>> To: firstname.lastname@example.org
; Winter Siroco;
; Nomi; Black, William; email@example.com
>> Michael; Mike Papantonio; Michael Krieger; George Washington; Tyler Durden;
; Karl; Barry; Kevin Zeese; max; Matt; Simon; Zach; David
>> Cay Johnston; Bill Laggner; Paul; Noam Chomsky; Moyers, Bill;
>> Subject: Re: OccupyWallStreet Economic Statement Draft 1
>> here it is w/ Dylan's suggested revisions, the ending needs smoothing out,
>> let's see if we can finalize something tonight in GA - flooded w/ calls rght
>> now, will be on NBC w/ Brian William tonight
>> we are publishing this statement in response to misinformation being spread
>> throughout some media outlets, we would like to issue the statement below to
>> give some clarification as to why we are currently occupying Wall Street:
>> Now let us make something clear to our fellow American citizens. We - old,
>> young, rich, poor, middle class, black, white, blue, red, hippies,
>> conservatives, liberals, soldiers, teachers, lawyers, doctors, firefighters,
>> and yes, police officers - the people occupying Wall Street, are not against
>> rich people for being rich, as various corporate media outlets are attempting
>> to make you think we are. We believe wealth should be a byproduct of working
>> together to solve our problems with aligned interests. To clarify, what we are
>> fighting against are the people, politicians and corporations who are
>> responsible for trillions of dollars in fraud. We are fighting a political
>> system that has been hijacked and rigged against hardworking Americans by the
>> global financial elite. We are rebelling against economic tyranny. We are
>> defending the United States against an occupying global financial oligarchy.
>> Our families have endured financial oppression for long enough.
>> We are here to defend the people of the United Sates. America has been
>> invaded and is currently occupied by global banks that have systematically
>> looted our economy and destroyed our economic future. Through a system of
>> political bribery - campaign finance, lobbying and the revolving door between
>> Washington and Wall Street – the global financial elite have bought off our
>> politicians and now dominate our political process.
>> So-called “too big to fail” financial companies, such as Goldman Sachs, JP
>> Morgan Chase, Bank of America and Citigroup are responsible for trillions of
>> dollars in fraudulent activity. As their global derivative Ponzi scheme began
>> to crash, these global corporations got paid off politicians and the Federal
>> Reserve to give them over $20 trillion dollars in taxpayer money and
>> subsidies. After these global banks crashed our economy and took trillions of
>> dollars of our national wealth, which saved their insolvent companies from
>> going out of business, they turned around and had the audacity to give
>> themselves all-time record-breaking bonuses.
>> They used our tax dollars to give themselves all-time recording-breaking
>> At a time of national crisis, with calls for shared sacrifice, they used our
>> tax dollars to give themselves all-time record-breaking bonuses.
>> As a result of their actions, our country has been economically attacked. The
>> statistics speak for themselves.
>> According to the National Academy of Sciences, we have over 50 million
>> Americans living in poverty. This shocking number of American families
>> currently living in poverty is at an all-time high. Over 50 million Americans
>> are also without health care. 46 million Americans are relying on food stamps
>> to feed their families. Over 64 million Americans have zero or negative net
>> worth. Over 200 million Americans are living paycheck to paycheck desperately
>> struggling to make ends meet as they are buried in debt. As this dire
>> situation grows even more severe, the global financial elite are richer than
>> ever. Over the course of the past generation, they have consolidated wealth
>> in unprecedented fashion. We currently have the highest inequality of wealth
>> in American history. Not even the Robber Barons were as bad as the modern day
>> economic elite.
>> In the US, millionaire households currently have over $46 trillion in wealth.
>> On an annual basis, only one-tenth of one percent of the US population makes
>> over $1 million per year. Breaking it down even further, 400 American
>> billionaires currently have as much wealth as 154 million Americans. These
>> 400 people have as much wealth as half of the entire US population.
>> As we said before, we are not against rich people for being rich. We believe
>> wealth should be a byproduct of working together to solve our problems with
>> aligned interests.
>> Our families and our country have endured financial oppression for long
>> Please join us or organize an action of your own. Anything you are willing to
>> do to rebel against economic tyranny in a non-violent manner is welcome.