Thursday, November 03, 2011

"Stick to Being Bulls. Stop Being Pigs." -- Thomas Friedman Advises the Top 1%

In his column published in the Houston Chronicle on October 30th, New York Times writer Thomas Friedman, a three-time winner of the Pulitzer Prize, pinpointed exactly why the Occupy Wall Street protests have found such resonance, both across the United States and around the globe: like the Arab Spring protesters in Tharir Square in Cairo, Occupy Wall Street is primarily a cry for fundamental economic justice.

Friedman says that despite causing the economic collapse and arousing the animosity of the public and progressives in Congress, the large U.S. banks and other Wall Street institutions still don't get it. He suggests that they pay attention and repent--before things get really ugly. And since repentance seems unlikely, he also proposes four essential reforms--none of which the financial services industry, or their cronies in Congress, will like.

The second half of Friedman's column follows (reformatted in places for added emphasis).

Our financial industry has grown so large and rich it has corrupted our real institutions through political donations. As Sen. Dick Durbin, an Illinois Democrat, bluntly said in a 2009 radio interview, despite having caused this crisis, these same financial firms "are still the most powerful lobby on Capitol Hill. And they, frankly, own the place."

Our Congress today is a forum for legalized bribery. One consumer group using information from calculates that the financial services industry, including real estate, spent $2.3 billion on federal campaign contributions from 1990 to 2010, which was more than the health care, energy, defense, agriculture and transportation industries combined. Why are there 61 members on the House Committee on Financial Services? So many congressmen want to be in a position to sell votes to Wall Street.

We can't afford this any longer. We need to focus on four reforms that don't require new bureaucracies to implement.

1) If a bank is too big to fail, it is too big and needs to be broken up. We can't risk another trillion-dollar bailout.

2) If your bank's deposits are federally insured by U.S. taxpayers, you can't do any proprietary trading with those deposits - period.

3) Derivatives have to be traded on transparent exchanges where we can see if another AIG is building up enormous risk.

4) Finally, an idea from the blogosphere: U.S. congressmen should have to dress like NASCAR drivers and wear the logos of all the banks, investment banks, insurance companies and real estate firms that they're taking money from.

Capitalism and free markets are the best engines for generating growth and relieving poverty - provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade. If we don't get it back - and there is now a tidal wave of money resisting that - we will have another crisis. And, if that happens, the cry for justice could turn ugly.

Free advice to the financial services industry: Stick to being bulls. Stop being pigs.

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