The Comet presents another unpublished submission to the ol' P-G.
This one we began writing only this morning, so we have no idea if we're going to get a bite. And this one is intended to be column-length; actually by those standards it comes in about 100 words under the ceiling. We're probably going to use some of the balance to add some nice words about BNY Mellon's evident civility, and other positive attributes.
But now. If this online, in-progress rendering doesn't jinx it, consider this a "sneak preview" for you loyal Blur-Go-Sphere holdouts. If it fails to be published in the papyrusphere, well, here's what I have to say. Cut and paste follows:
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If unemployment were low and wages high, if health care were affordable and widely accessible, if public transit options were plentiful and public schools successful and expanding, then Occupy Wall Street would not be necessary. As things stand, it is little wonder the movement has spawned franchises in over 300 cities in the United States, including at least 13 in Pennsylvania.
Perhaps no occupation sits on a site quite so appropriate as Occupy Pittsburgh. BNY Mellon Corp. is now the world's most overgrown securities and asset management firm, after the merger in 2006 which gave it its name. The juggernaut extracted $651 million in profits just during this last fiscal quarter -- but it is the sources of much of that profit that are so troubling.
BNY Mellon prevailed upon the U.S. Treasury to be hired as "master custodian" of all $700 billion in federal Troubled Asset Relief Program or TARP funds. These were utilized to bail out banks deemed "too big to fail" immediately following the catastrophic failures of non-regulation and opportunism which created the sub-prime mortgage crisis. The taxpayer money went to job security and bonuses for those responsible for the economic collapse, without providing relief to homeowners and small business owners seeing their bills skyrocket.
Additionally, BNY Mellon finds itself defending fraud charges filed by several state Attorneys General and a US Attorney for having allegedly skimmed billions from public pension funds. The raft of lawsuits claim that BNY overcharged its clients for foreign currency exchanges by making purchases at the best prices available on a given day, but then providing pensioners and others with the worst prices notched on those same days.Finally this week, BNY Mellon was sued again on behalf of three more investment funds for "gross negligence" in the administration and custodianship of a fund linked to Bernard Madoff's audaciously destructive Ponzi scheme, for which he was sentenced to 150 years in prison.
BNY Mellon is not alone in fostering this perversion of democracy, but for generations it has been a notable player. In 1921, Andrew W. Mellon graduated from banking and industrial concerns to become U.S. Treasury Secretary, urging tax cuts and "liquidating" public investments. In 1932 after the onset of the Depression, Articles of Impeachment were introduced in Congress against Mellon for wielding his public office to enrich his own and his family's aluminum, shipping and other interests -- but he resigned before he could answer these. Fast forward to this day, and we find executives from Goldman Sachs and JPMorgan Chase similarly insinuated into government, yet the incestuous relationships produce nary an official rebuke.
In short, the country is accelerating on the wrong track, deaf to the needs of its vast majority and in a state of emergency. Drawing within the lines clearly has not been working; those lines were drawn by "the 1%" in the first place. Occupy Pittsburgh is absolutely committed to peaceful tactics, and has demonstrated that commitment to a fault over the past two months. Yet if "trespassing" on what was meant to be an "open public space" at the foot of a morally bankrupt Goliath is necessary to awaken others to extreme and immediate crises, most will gladly remain. Even if courts and public officials ultimately feel they must intervene to clear out the demonstrators, most will be eager to demonstrate how life goes on even after a bit of peaceful defiance.Occupy Pittsburgh remains at the corner of Grant St. and 6th Ave. in Downtown Pittsburgh. You will find Old Glory flying high above its arctic tents and yurts, housing its subzero-rated sleeping bags and blankets. To take a stand at this overdue moment in American history and ensure that people and communities are prioritized over profits for a diminishing few, come together on that spot this week.
Well written! I'm very impressed at how Occupy Pittsburgh is proceeding.
ReplyDeleteWe have homeless people living under bridges and overpasses and the Establishment doesn't care.
People camp out without a permit to make a statement and it's a major issue.
Well written? Nah, it's not happy enough. I may loop in some comrades with different skill sets (weak gag reflexes) and we'll see if we can go with a co-byline.
ReplyDeleteWe have a homeless occupier helping to manage the supplies tent and assemble larger shelters. A veteran.
Can you address the predatory behavior of Wall st. without addressing the enabling of Wall St. by the political establishment.Even here in Pittsburgh council supports OWS while a contingent of local pols go to NASDAQ for a photo op?!
ReplyDeleteWhen did that happen? Gotta link?
ReplyDeletePlus there's more I can add. Not only public health, but the kinds of jobs and entrepreneurship that is widely available under terms of real competition and locally held governmental liberty.
ReplyDeletesure check out bill peduto's facebook page. Its called "winter 2011 travel"
ReplyDeleteBill Peduto
"On the floor of NASDAQ for the closing bell ceremony led by County Exec elect Rich Fitzgerald"
Maybe Yinz-Cam went IPO?
ReplyDeleteRight after he was elected, Fitzgerald raised taxes and sold out to Wall Street.
ReplyDelete(Seriously, I think trying to connect local politicians to enabling Wall Street might be stretching things a bit too far. And I voted for Raja.)
Bram,
ReplyDeleteVery good. I like the bit of Mellon history. I hadn't realized all of that.
MH...my point was that wall st/politicians are inseparable. Even at a local level.Council passes a bill which is much like the community reinvestment Act while members are visiting the belly of the so called beast.
ReplyDeleteThat's kind of the point of the Occupy movement. You've commented on a piece that is nearly all about the intersection of money and politics by saying that it ignores the politics. What I think you are trying to say is that we shouldn't blame any private actor at all if any of the error is on the part of the government. That seems misguided to me.
ReplyDeleteP.S. I've read quite extensively on this and seen nothing that indicates the CRA was anything but a minor contributory factor to the recent economic crash.
@MH then my apologies for not being clear...of course the private sector has loads of responsiblity. Collusion is rampant at all level of politics with finance. Have you read "Reckless endangerment" or the 'The Big Short"? The CRA was created in 1977. Its implementation was slow. The banks push for increased home ownership didn't occur until the financial services industry began to create the cdo's and the mortgage based securities.Prior, derivatives had been used extensively in commercial business, but they were an untried instrument when introduced to the consumer market.
ReplyDeleteBy using derivatives in the consumer market, financial institutions opened up a Pandora's box of unforseen consequences. Financial institutions used the CRA road map to untapped mortgages lowering standards for mortgages, loosening regs, cheating on credit scores, and providing loans to the insolvent.In partnership with Fannie Mae, companies like Countrywide, hand in hand with Sen.Chris Dodds and Rep Barnie Franks, raped the mortgage markets and the home ownership dreams of millions.I think the CRA itself may have been a well intentioned piece of legislation, but when coupled with unbridled greed and corruption at the highest levels of gov't, it created a Perfect Storm!
Part of what I think the Occupy is about is re-stigmatizing greed, particularly when it reaches the point of negatively impacting others.
ReplyDeleteThere's a sense that many things ought to considered okay because they're "just business", especially if any other party can be said to have acted "foolishly" but in general as well. The movement is a fundamental challenge to that short-circuiting of normal ethical calculus, a short-circuiting which tends to get applied easily to "corporations" more than groups of friends around a card table. Lawmaking has trouble catching up to entrepreneurial ingenuity, so this is a way to address the problem at the root. It's like, "Cut it out already."
I stopped by one Saturday at OWS and took some pics. My favorite is "end the fed" which i would like to see. I think the local Occupy movement over-reached.I think there was a lot of good will from Pgh'ers towards them for their behavior as other cities lost control of their protests.With the unanimous support of council and the good will of the people, there existed the perfect mix of political and community support. Pulling out as requested and using your standing in council and the community to keep your voices heard was in my opinion they way to go. After two months of peaceful coexistence with BNYMellon, OWS decided to label BNY a criminal enterprise and foolishly served them with symbolic eviction papers. The longer the stay the less favorably will OWS be remembered here in Pittsburgh.
ReplyDeleteIt's been a while since we've seen much "End the Fed" agitation. There's a general sense among many that Auditing the Fed and Reforming the Fed (probably by replacing certain officials) are pretty good ideas.
ReplyDeleteThe local chapter's not over yet, and the story's far from over. We'll see what happens. I remember that "labeling as a criminal enterprise" was rushed through a GA on the eve of the original eviction notice, with some reference to WTAE trucks standing by (we are not all experts). But there aren't many regrets about it! The counter-eviction is getting the most press, but we are pursuing other tracks. There's something on the radar about public transit tomorrow, and something else involving the folks on the other side of 6th Ave.
rich, here is a clip from the Wikipedia page on the Community Reinvestment Act, the section on its role in the 2008 crash:
ReplyDelete"many others dispute that the CRA was a significant cause of the subprime crisis. Nobel laureate Paul Krugman[107] noted in November 2009 that 55% of commercial real estate loans were currently underwater, despite being completely unaffected by the CRA.[108] According to Federal Reserve Governor Randall Kroszner, the claim that "the law pushed banking institutions to undertake high-risk mortgage lending" was contrary to their experience, and that no empirical evidence had been presented to support the claim.[109] In a Bank for International Settlements (BIS) working paper, economist Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust", relying partly on evidence that the housing bust has been a largely exurban event.[110] Others have also concluded that the CRA did not contribute to the financial crisis, for example, FDIC Chairman Sheila Bair,[111] Comptroller of the Currency John C. Dugan,[112] Tim Westrich of the Center for American Progress,[113] Robert Gordon of the American Prospect,[114] Ellen Seidman of the New America Foundation,[115] Daniel Gross of Slate,[116] and Aaron Pressman from BusinessWeek.[117]
Legal and financial experts have noted that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[63][118] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".[119] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky "high-priced loans" at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[120] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[121] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures.[122]
During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the "fuel" for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA."
Maybe you will leave the CRA alone now.
Yeah! What Ed said.
ReplyDeleteBasically, the banks got to stupid than the FHA pushed to be allowed to be stupid too. The government has done a bunch of very bad things with housing and lost a ton of money aside from the bailouts to the banks, but nearly all of it on the middle and upper middle classes.
ReplyDeleteOh Eddie, of course the Fed governors and "Noble Laurette" Krugman, (remember Obama won a Noble after what a couple months in office and then CURRENT weatherman Al Gore also won one),cook the books to make numbers match the reality they want not reality as it is. That's no different than what the Soviets did after they collectivized the farms and claimed it was all good!!
ReplyDeleteI looked at the same Wiki piece and it states there are as many dissenting opinions so you picked "team progressive" as your source is no surprise.In a 1992 Boston Federal Reserve Bank study of discrimination in home mortgage lending concluded that, while there was no overt discrimination in banks’ allocation of mortgage funds, loan officers gave whites preferential treatment. The methodology of the study has since been questioned and repudiated, but it lead to major changes in the CRA. (while writing this i got a message stating that six former FAnnie and Freddie execs have been indicted for fraud among them the CEO's who were in charge in 2006-07). These changes also impacted the way Freddie and fannie distributed loans.The CRA more than anything created a mindset that pushed bankers to the lower level of the mortgage pool.
And Ed never use Franklin Raines as a source for anything.The man raped and pillaged Fannie, then went on to be a adviser to obama. Oh yeah did I mention he was also a friend of Angelo Mizzillo from COUNTRYWIDE!! You can tell a man by the friends he keeps.Hmmmm
and @ anon 8:50 Duhhh whatever Eddie's says isn't usually right!!
The CRA didn't create the mindset. It was pushed by both political parties, including those who didn't like the CRA. The Republicans lost me mainly on health care*, but the habit of looking at a society-wide failing and targeting the small portion that might have disproportionately helped a poor guy is right up there. Countrywide used CRA as an excuse and nothing more. It started making more subprime loans to the poor because it figured out how to sell them to investors.
ReplyDelete*Nobody over 65 should pay a dime, nobody under 65 should get any help isn't sane.
So rich, you say "of course the Fed governors and "Noble Laurette" Krugman, (remember Obama won a Noble after what a couple months in office and then CURRENT weatherman Al Gore also won one),cook the books to make numbers match the reality they want not reality as it is".
ReplyDeleteSo Paul Krugman runs the Fed, and no one else keeps records. And only you (and the Republican party you stooge for even though you claim not to be a part of it) know the truth, know what reality is. I'll let everyone who reads this blog judge that statement for themselves.
You said about me "you picked "team progressive" as your source is no surprise".
I did that by copying three paragraphs straight through. Somehow that constituted picking and choosing. Everyone else here can read the same Wiki page, I did omit quotes from the Rupert Murdoch owned New York Post, Ron Paul and an Austrian School economist, in large part because I don't see any of them as honest. My bad.
I hope Ron Paul gets his wish about auditing the Fed.
ReplyDeleteMH, is that auditing or abolishing?
ReplyDeleteAuditing. I spelled it right and everything.
ReplyDeleteI'm not enthused about Congress setting monetary policy or gold-back dollars.