This week, the Financial Crisis Inquiry Commission began it's year long inquiry into the activities of various financial institutions which received bailouts. These bailouts were the subject of fierce protesting which transcended party lines, including several teaparties. The American people have an increasingly high disapproval rating for Washington as a whole, and popular music has memorialized the folly of the banking establishment and the anger which many Americans felt regarding their seemingly endless lack of responsibility for that folly. "Shutting Detroit Down" by John Rich rang out with the timely and scalding chorus "Cause in the real world there shutting Detroit down, While the boss man takes his bonus pay and jets out of town, And DC’s bailing out the bankers as the farmers auction ground, Yeah while they’re living it up on Wall Street in that New York City town, Here in the real world they're shuttin’ Detroit down.” all across the nation on CMT and various radio networks, as stay at home mothers, students, and the recently unemployed all took to the streets in anger at the same basic premise.
So what did the bankers have to say for themselves?
Brian Moynihan, CEO/President of Bank of America. "We understand the anger felt by many citizens... Over the course of the crisis, we as an industry caused a lot of damage"
Jamie Dimon, chief executive of JPMorgan Chase & Co. said, "We did make mistakes and there were things we could have done better." John Mack, chairman of Morgan Stanley, said the crisis was "a powerful wake-up call for this firm." These comments indicate just how sheltered from the "real world" these high level executives are, and could, and ought, be taken as an open admission of guilt, should a grand jury be convened on the matter. However, even more troubling than these answers, which at least take direct and clear responsibility for their actions, are those of Goldman-Sachs CEO Lloyd Blankfein, who said among other things that "We did not know at any minute what would happen next, there were people in the market who thought it was going down and there were others who thought these prices had gone down so much they were going to bounce up again.” Not only is this ludicrous, the concept of a company which depends on market analysis for it's income being unable to analyze a market, but in addition, Philip Angelides, chairman of the commission, described Blankfein's testimony in particular as "troubling" and compared the actions of Goldman Sachs as being akin to "selling faulty breaks and then selling insurance".
What should be done with the guilty parties? While it is likely that their companies will be penalized, pay cuts mandated, and perhaps even personal fines imposed, is this enough? Should there be criminal charges filed against individuals? What about the administration, and the accountability for their role in allowing the bailouts? Certain congressmen have stated that they were threatened with martial law. There needs to be a formal investigation of this. There needs to be a formal investigation of any other improprieties and semi-dictatorial tactics used. And, there ought be consequences for the administration.
Rob Johnson, a former chief economist for the Senate Banking Committee, has suggested that the Federal Reserve and Treasury may “have some explaining to do,” and that“The mishandling of that bailout strongly suggests that financial reform will not be complete if we just give discretion to the Fed and the Treasury secretary to go do it again.” The Federal Reserve Board Abolition Act and the Federal Reserve Transparency Act both have had nationwide grassroots demonstrations, repeatedly, a record amount of involvement for such an arcane topic. Rob Johnson's suggestions, while refreshing to hear from someone in his position, are rather mild in all reality.
Presidential press secretary Robert Gibbs said that "It would seem to me that apology would be the least of what anybody could expect." and that Wall Street officials need to show common sense. However, while the financial institutions have at least apologized to the people, President Obama has not even done that much, nor have those in his administration. Gibbs is certainly correct, apologies are not what are needed. Apologies are what one gives after offending friends. An apology made by a criminal in a courtroom, will not prevent a criminal from going to jail (although it may reduce his sentence) and that is the more appropriate context for this fiasco. In addition, this commission was modeled after the 9/11 commission, which is still not seen as a satisfactory investigation, almost ten years after the fact by many Americans.
America is a nation founded on rebellion, of minutemen and rock and roll, of civil disobedience and of second chances, where celebrities learn from their mistakes. Yet, even celebrities serve time in jail. Jailtime might be what the people feel appropriate in a situation as drastic as this, and after all, Thomas Jefferson once wrote, in the declaration of independence:
"Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."
There are those within the political establishment who feel that the times have changed, and that human liberty is no longer a viable option for the government. These people, primarily progressives, but many neo-conservatives as well, feel that the role of government is to take care of the needs of people with the money it taxes and usures out of them, and to appease them enough to avoid their anger. But they must tread lightly in every action they make, for what they fail to realize is that while within the system, the voice of idealism may not win, a growing number of idealists, who hold the same principles that have built this nation, and ask only to be left alone by the government, and to make ends meet, exist in large numbers, in fact, they are the majority, amongst all classes but the political establishment. Those who advocate for more power as the solutions to a government which seems to create more problems with all the power it's given, ought remember the words carried by protesters across this nation this summer, words which echoed into the heartbeat of America with one voice, one beat, a heartbeat connected with the beating of the drums carried by General Washington's Army: Don't tread on me. Don't tread on us.
Those from any party who are deep entrenched in the current political establishment should tread very lightly at this point in our nations history, and listen to the voice of the man on the street, if any sense is about them. For those governed may well withdraw their consent, and a rattlesnake when tread upon, will bite with lethal venom, swiftly defeating the fool who failed to listen to it's rattle.
(source(s): AP, Bloomberg)