At an ACORN rally in front of Wells Fargo (what used to be the Wachovia complex at Jefferson and Market), one of the members, Darryl Moore, talked to me about some of the shenanigans that the financial giants are up to. He pointed out, for instance, that major financial institutions are overseen by watchdogs. The problem with the watchdogs is that they are companies hired by the financial institutions themselves.
I wonder if Goldman Sachs or AIG actually writes into the contract which risky or unethical practices these
watchdogs lapdogs are bound to overlook. Or is a wink and nod good enough?
Apparently the lapdogs do not forbid these institutions from taking billions in bailout money and then using tens of millions of it to fight the new Consumer Financial Protection Agency that President Obama is aiming to create. That’s what ACORN members were doing in front of Wells Fargo on Tuesday, publicizing the fact that the big banks and mortgage lenders are going all out to kill reform. True, smothering the infant agency in its crib isn’t likely to happen. But they would be satisfied if they could just weaken the legislation so that it never does more than totter around, presenting no real threat to them.
Roszina Jones had some harsh words about the banks achieving either one of those goals. Most of the protesters were into chants, like “We want a watchdog, not a lapdog.” But Roszina, now, she rants. She started this riff by yelling about how Wells Fargo has taken her taxes and used it:
so you can fight and increase your pay and your money while we stand here in debt and don’t have no money. I don’t get to drive a Beemer. I don’t live in no mansion. I work hard every day, work at minimum wage and you take my money to take it to the (inaudible) TV show to talk against Obama’s financial reform. It’s gonna help me get out of debt and you wanna keep me in debt. That’s not justice. That’s injustice.
This morning’s Post-Dispatch headline “Goldman Sachs execs ready to rake it in” probably made Roszina see red. It ought to. It doesn’t matter that Goldman Sachs has paid back the TARP money it took or that it is only rewarding its people for raking in the richest quarterly profit in its 140-year history. That corporation needs to be reined in. John Cole at Balloon Juice says as much. First, he provides some background in the form of Robert Reich quoting Goldman Sachs’ CFO:
“Our model really never changed, we’ve said very consistently that our business model remained the same,” Goldman’s chief financial officer tells Bloomberg News. Value-at-risk-a statistical measure of how much the firm’s trading operations could lose in a day-rose to an average of $245 million in the second quarter from $240 million in the first quarter. In the second quarter of 2008, VaR averaged $184 million.
Goldman and others brought the world financial sector to their knees, are largely responsible for the worldwide recession, required ten billion in TARP funds, protection as they moved from investment bank status, billions in loans, thirteen billion in direct payments from the taxpayer (routed through AIG), god only knows what else from the Fed’s hidden behavior, as well as a Paulson assist in the elimination of their competition, and here is the CFO of Goldman telling you that they learned nothing and that nothing changed.
Hey, Roszina, ya think Cole has the right idea when he says the banks should stop giving interviews and just take out full page ads mooning us?
This new agency that the bankers are so intent on murdering in its crib is the brainchild of Elizabeth Warren, the Harvard Law Professor that Harry Reid tapped last fall to head the Congressional Oversight Panel, which monitored the financial industry bailouts. Warren might be called on to head the new Consumer Financial Protection Agency (CFPA). Bob Herbert tells us what she said to a Congressional committee last month:
“Giant lenders compete for business by talking about nominal interest rates, free gifts and warm feelings,” she said, “but the fine print hides the things that really rake in the cash. Today’s business model is about making money through tricks and traps.”
It should be clear by now that it is often the goal of financial institutions to see that the consumer is not well informed. “In the early-1980s,” said Professor Warren, the average credit card contract was about a page long. “Today, it is more than 30 pages. … I am a contract law professor, and I cannot make out some of the fine print.”
As I walked along Jefferson Ave. yesterday approaching the protesters, a middle aged man in a business suit walked through the group and toward me. He looked pained and seemed to hope for an answering look of annoyance and pain from me. He all but said, ‘Can you believe these nutcases out here yelling on the sidewalk?’
Oh, sir, I can believe them. I believe them a whole helluva lot more than I believe anything a Wells Fargo exec has to say.