What went wrong and how to fix it

This video explains how the First Great Depression forced the adoption of policies to impose controls on Wall Street, how Wall Street broke free of those controls in the deregulation of Reagan’s 1980s, the series of financial crisis that thereafter resulted, and three reforms we need to re-impose to force Wall Street to serve the real economy, instead of just looting it. It includes an incredible clip of a Wall Streeter unable to say, in a Congressional hearing, they are supposed to serve their clients’ interest.




Those few seconds of a Wall Streeter exposed in all his naked greed, should give you some idea of how hopelessly and shamelessly predatory our financial system is these days. So, no, it is not hyperbole or exaggeration when one of the few people who has been consistently correct these past four years , Stirling Newberry writes on his blog this past weekend, #OWS isn't what you think it is:

What is lost on the people demonstrating is the problem of scale. In effect, the reason there are no prosecutions, is because one would in the end have to lock up virtually the entire banking and real estate systems: from the robosigners, appraisers, loan originators, realtors and agents on the bottom, through the builders who participated in schemes to pump up real estate, through the loan processors and aggregators, through the bank securitizers, through the bond traders, through the shadow bankers, all the way up to the top.

This was, in effect, a revolution: a bottom interested in building and flipping homes, which is a vast share of the American economy, to a top looking for something to securitize and sell as safer than it was. Adding it up, it comes to hundreds of thousands, if not millions, of people involved. We would have to let go all of the drug crimes, and still not have enough cells for all of them.

Thus for the OWS to prevail, it would need to have a similar scale of people willing to be arrested. Not 700, but 700,000. Enough so that every cell on the East Coast would be filled with an occupant, and not an alleged perpetrator.

As always, it's worth reading the entirety of Newberry's post. He explains that "Occupy Wall Street has crystallized the reality to elites that this wave of austerity is at an end, as the London Riots did in England."

Last, week, Larson posted an excellent list of specific policy proposals, So what do we really want?

Back in October 2008, when I naively believed that the collapse of the Wall Street investment banks would provide us the opportunity to reimpose social control on Wall Street and the financial system, and redirect the channels of credit and new money formation away from speculation and back towards real economic activity, I promoted Sean-Paul Kelley’s (editor of The Agonist) outline of ten critical financial reforms: What Might Real Financial Reform Look Like?

And in January 2009, I promoted David Cay Johnston’s ( former New York Times correspondent, and author of Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill) eleven point A guide to ending the war on the middle class.