OCCUPY: the Movie Watch it here now...

Bank of England official: Occupy Movement right about global recession

from The Guardian

Andrew Haldane said protestors were correct to focus on inequality as the chief reason for 2008 economic crash

Occupy's voice had been 'loud and persuasive' said Andrew Haldane. Photograph: Rex Features

The Occupy Movement has found an unlikely ally in a senior Bank of England official, Andrew Haldane, who has praised protesters for their role in triggering an overhaul of the financial services sector.

Haldane, who oversees the City for the central bank, said Occupy acted as a lever on policymakers despite criticism that its aims were too vague. He said the protest movement was right to focus on inequality as the chief reason for the 2008 crash, following studies that showed the accumulation of huge wealth funded by debt was directly responsible for the domino-like collapse of the banking sector in 2008.

Speaking at a debate held by the Occupy Movement in central London, Haldane said regulations limiting credit use would undermine attempts by individuals to accumulate huge property and financial wealth at the expense of other members of society. Allowing banks to lend on a massive scale also drained funding from other industries, adding to the negative impact that unregulated banks had on the economy, he said.

The hard-hitting speech is unlikely to find a warm welcome in the Square Mile, which is keen for bank lending to recover to its heady pre-crisis levels and bring accompanying profits and commissions. Lending to individuals and corporations in the UK has fallen to a fraction of the levels seen in 2007 when few banks checked the income status of individual borrowers or the risks being taken by corporate customers before offering a loan. The Bank of England will impose stricter lending rules on banks next year when it takes over regulation of the industry from the Financial Services Authority.

Haldane said Occupy's voice had been "loud and persuasive" and that "policymakers have listened and are acting in ways which will close those fault-lines" with a "reformation of finance that Occupy has helped stir". He said inequality was fuelled by bank lending for speculation on property and other assets that enriched some in society at the expense of others.

"The asset-rich, in particular the owner-occupying rich, became a lot richer. Meanwhile, the asset-less and indebted fell further behind. In other words, the pre-crisis asset price bubble acted like a regressive tax," he said.

favorite graphics of the day

WHAT COMES AFTER THE END OF CAPITALISM? (Sunday Sermon)

From Richard Metzger at DangerousMinds:

Noam Chomsky has long advocated simply reading the Wall Street Journal if you wanted to understand the mindset of the ruling class. No special detective work is necessary to divine the attitudes and intentions of the rich and powerful. In the pages of their house organ you could find what you were looking for, often with unvarnished bluntness.

It’s good advice, but today, the WSJ isn’t the only place to look for hints of ruling class attitudes. In a column published today at Huffington Post, Dr. Klaus Schwab, the founder and executive chairman of the World Economic Forum poses a salient question: If this is the end of Capitalism, then what’s next?

One of the criticisms of capitalism centers on the widening gap between winners and losers due to the so-called turbocapitalism that is a result of global competition. In this context, the so-called Nordic model demonstrates that a high degree of labor market flexibility and social welfare systems do not have to be mutually exclusive—indeed, they can actually be combined to very good effect. This type of economic policy also enables countries to invest in innovation, childcare, education and training. The Scandinavian countries, which underwent a similar banking crisis in the 1990s to that which we are now experiencing in other Western economies, have shown that by reforming regulation and social welfare systems, flexible labor and capital markets really are compatible with social responsibility. So it is no coincidence that these countries are now among the most competitive economies in the world. [Emphasis added]

Other aspects of the criticism of capitalism that are worthy of serious consideration are excessive bonuses, the burgeoning market in alternative financial instruments and the imbalance that has emerged between finance and the real economy. However, we do see some progress in these areas thanks to mounting pressure from the general public, governments and also the market.

So even though capitalism was not laid to rest in Davos, it is fair to say that capital is losing its status as the most important factor of production in our economic system. As I outlined in my opening address in Davos, capital is being superseded by creativity and the ability to innovate—and therefore by human talents—as the most important factors of production. If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by “talentism.” Just as capital replaced manual trades during the process of industrialization, capital is now giving way to human talent. I am convinced that this process of transformation will also lead to new approaches within the field of economics. It is indisputable that an ideology founded on personal freedom and social responsibility gives both individuals and the economy the greatest possible scope to develop.

If this is the sort of intellectual currency that was circulating around Davos this year, I think this is a pretty strong indication that the Occupy backlash is having a big effect. You’d hope that by now the elites must know that the natives are restless!

Obviously a worldwide group-mind consensus is demanding, if not exactly the end of Capitalism, certainly a major rethink/reformation of the way it is practiced in the 21st century. The world is a different place than it was before the Industrial Revolution, it’s high time we updated the operating system to reflect those changes.

It’s just getting to be so fucking stupid, isn’t it?

Michael E. Porter, a Harvard University professor cited by Schwab in his essay, explains why business leaders must focus on “shared value creation.”

Stand Up, Damned Of The Earth

by Alexander Goerlach from The European magazine

Financial capitalism has lost its legitimacy. The spiral of ever-increasing national debt and Wall Street speculation must be broken. And we must speak up against rhetorical embellishments that try to sell "business as usual" as the only option.

Unless we continue with government aid packages, the banking system will collapse. At least that is what you hear from the bankers themselves. Alright – we must prevent that collapse from happening. Governments must nationalize the profits that the banks accumulated with taxpayer money since the financial crisis. If bankruptcy was avoided with billions of dollars of rescue packages, then the banks owe the people. And the nationalization of profits would also be an adequate punishment for years of reckless speculations and predatory lending that drove the world to the brink of collapse.

The next step will be the creation of regulatory tools that prevent the resurgence of greed. A turn to the Middle East might help: Islamic banking strictly regulates the use of speculation and interest rates. We know that the 21st century will bring food shortages; wars will be fought over access to water and grain. Yet we continue to allow speculation on these vital resources. People in developing nations are especially vulnerable to price fluctuations that are caused by the men in suits and air-conditioned offices.

Why do the people not rise against that system? Because we are sedated by a rhetoric that explains such egregious forms of investment as a feature of the free market. Yet the declaration that “my money works for me” is as revealing as it is false. When I make money, someone else is losing money. The mechanism behind the redistribution of money is not the survival of the best ideas, as the proponents of the free market want to tell us. Instead, investments are loaded with risk while toxic assets are being passed back and forth among the big players. Whoever holds the assets when the music stops, loses.

But who would buy something so risky?

Only those who don’t know better. But the banks did know. Their obscure betting practices and the conviction that the state would bail them out of a worst-case scenario were their blanc checks that justified recklessness. Their investments were an order of magnitude larger than the money they actually controlled.

We thought that our long-term investments – life insurances, retirement funds, savings – were save with the banks. Actually, that money was used to keep the financial casino going. The German chancellor and treasury secretary explicitly stated that our savings are indeed save. Why are they so keen to press that message? Because the state would have to jump in if the banks squandered those investments.

Here’s another rhetorical fallacy: “The markets”. Who is that supposed to be? It is a grammatical construction that reminds me of the remark that “the organ is playing”. When you walk past a church on Sunday and the sound of the music fills the air, people often mention it: “The organ is playing”. As the parishioners exist the church after the service, they pay their compliments: “The organ played nicely today”. But the organ does not play. The organist does. You might not see him from your bench inside the church, but that does not mean that he is not there. You also cannot see “the markets”. We mystify them without looking at the people and decisions that explain market behavior.

When we say that the markets are in turmoil, what we mean is that the Wall Streets of this world are in turmoil because people are worried about their speculations and the future of their business. They fear that the system could collapse.

The spinster phrase “too big too fail” is another great success of the financial industry that managed to dictate policy to a deeply disturbed political establishment.

Now is the time to realize that the mechanics of debt-driven financing are no longer a viable path. States used to be able to accumulate debt when it was still possible to measure economic output reliably. Today, the export of cars or washing machines has been replaced by twisted investments whose risks and real value can hardly be determined. Money that used to originate from labor and production was leveraged through collateralized debt obligations and credit default swaps. The victims of that game of poker were the small-scale investors and mortgage recipients.

Short-term thinking means that it has become impossible to make long-term claims about the economic situation of a state. The system is too complex, too fragile and too much intertwined to rule out sudden collapse and domino effects. One crisis can reduce decades of progress to a pile of economic rubble. No matter how radical Greek spending cuts are, the country will be saddled with debt for decades. A similar situation can be found in the US and in some other countries of the Eurozone.

Do we all need a haircut to reduce our national debt? The most important task, I believe, is to break the narrative that has sustained the financial industry for so long. Politicians are tasked with the reconstruction of leadership. We must no longer tolerate that bankers can keep them on a short leash, pushing and pulling them into whichever direction benefits them. Leadership can be reduced to individuals. Chancellor Merkel, get back our tax money!

Matt Taibbi: Senior SEC investigators order routine destruction of records, promote “self policing,” take jobs with the companies they “investigate”

Via BoingBoing

As always, Rolling Stone's Matt Taibbi is incandescent on the subject of high financial fraud and misdoings, and the government complicity in the vast criminal ripoffs engineered by the finance industry. In his latest feature, he looks at the way that the SEC, America's financial regulator, has combined "self-policing" of criminal finance firms with a policy of destroying all records of previous investigations to produce an world in which no one has been punished for the vast financial crimes that brought the world to its knees.

The circular nature of the case illustrates the revolving-door dynamic that has become pervasive at the SEC. A recent study by the Project on Government Oversight found that over the past five years, former SEC personnel filed 789 notices disclosing their intent to represent outside companies before the agency – sometimes within days of their having left the SEC. More than half of the disclosures came from the agency's enforcement division, who went to bat for the financial industry four times more often than ex-staffers from other wings of the SEC.

Even a cursory glance at a list of the agency's most recent enforcement directors makes it clear that the SEC's top policemen almost always wind up jumping straight to jobs representing the banks they were supposed to regulate. Lynch, who represented Deutsche in the Flynn case, served as the agency's enforcement chief from 1985 to 1989, before moving to the firm of Davis Polk, which boasts many top Wall Street clients. He was succeeded by William McLucas, who left the SEC in 1998 to work for WilmerHale, a Wall Street defense firm so notorious for snatching up top agency veterans that it is sometimes referred to as "SEC West." McLucas was followed by Dick Walker, who defected to Deutsche in 2001, and he was in turn followed by Stephen Cutler, who now serves as general counsel for JP Morgan Chase. Next came Linda Chatman Thomsen, who stepped down to join Davis Polk, only to be succeeded in 2009 by Khuzami, Walker's former protégé at Deutsche Bank.

This merry-go-round of current and former enforcement directors has repeatedly led to accusations of improprieties. In 2008, in a case cited by the SEC inspector general, Thomsen went out of her way to pass along valuable information to Cutler, the former enforcement director who had gone to work for JP Morgan. According to the inspector general, Thomsen signaled Cutler that the SEC was unlikely to take action that would hamper JP Morgan's move to buy up Bear Stearns. In another case, the inspector general found, an assistant director of enforcement was instrumental in slowing down an investigation into the $7 billion Ponzi scheme allegedly run by Texas con artist R. Allen Stanford – and then left the SEC to work for Stanford, despite explicitly being denied permission to do so by the agency's ethics office. "Every lawyer in Texas and beyond is going to get rich on this case, OK?" the official later explained. "I hated being on the sidelines."

...[E]ven if SEC officials manage to dodge criminal charges, it won't change what happened: The nation's top financial police destroyed more than a decade's worth of intelligence they had gathered on some of Wall Street's most egregious offenders. "The SEC not keeping the MUIs – you can see why this would be bad," says Markopolos, the fraud examiner famous for breaking the Madoff case. "The reason you would want to keep them is to build a pattern. That way, if you get five MUIs over a period of 20 years on something similar involving the same company, you should be able to connect five dots and say, 'You know, I've had five MUIs – they're probably doing something. Let's go tear the place apart.'" Destroy the MUIs, and Wall Street banks can commit the exact same crime over and over, without anyone ever knowing."

Is the SEC Covering Up Wall Street Crimes?

gotta love Michael Moore

I just got around to reading an EXCELLENT letter that Michael Moore sent out to his mailing list (which i am on) and is also on his blog.

"Michael Moore's Action Plan: 15 Things Every American Can Do Right Now"


Friends,

It's the #1 question I'm constantly asked after people see my movie: "OK -- so NOW what can I DO?!"

You want something to do? Well, you've come to the right place! 'Cause I got 15 things you and I can do right now to fight back and try to fix this very broken system.

Here they are:

FIVE THINGS WE DEMAND THE PRESIDENT AND CONGRESS DO IMMEDIATELY:

1. Declare a moratorium on all home evictions. Not one more family should be thrown out of their home. The banks must adjust their monthly mortgage payments to be in line with what people's homes are now truly worth -- and what they can afford. Also, it must be stated by law: If you lose your job, you cannot be tossed out of your home.

2. Congress must join the civilized world and expand Medicare For All Americans. A single, nonprofit source must run a universal health care system that covers everyone. Medical bills are now the #1 cause of bankruptcies and evictions in this country. Medicare For All will end this misery. The bill to make this happen is H.R. 3200 -- but this bill is worthless without the amendment from Rep. Anthony Weiner that will bring us closer to the real bill that should be passed: H.R. 676. You must call AND write your members of Congress and demand that they support this amendment, no compromises allowed.

3. Demand publicly-funded elections and a prohibition on elected officials leaving office and becoming lobbyists. Yes, those very members of Congress who solicit and receive millions of dollars from wealthy interests must vote to remove ALL money from our electoral and legislative process. Tell your members of Congress they must support campaign finance bill H.R.1826.

4. Each of the 50 states must create a state-owned public bank like they have in North Dakota. Then congress MUST reinstate all the strict pre-Reagan regulations on all commercial banks, investment firms, insurance companies -- and all the other industries that have been savaged by deregulation: Airlines, the food industry, pharmaceutical companies -- you name it. If a company's primary motive to exist is to make a profit, then it needs a set of stringent rules to live by -- and the first rule is "Do no harm." The second rule: The question must always be asked -- "Is this for the common good?" (Click here for some info about the state-owned Bank of North Dakota.)

5. Save this fragile planet and declare that all the energy resources above and beneath the ground are owned collectively by all of us. Just like they do it in Sarah Palin's socialist Alaska. We only have a few decades of oil left. The public must be the owners and landlords of the natural resources and energy that exists within our borders or we will descend further into corporate anarchy. And when it comes to burning fossil fuels to transport ourselves, we must cease using the internal combustion engine and instruct our auto/transportation companies to rehire our skilled workforce and build mass transit (clean buses, light rail, subways, bullet trains, etc.) and new cars that don't contribute to climate change. (For more on this, here's a proposal I wrote in December.) Demand that General Motors' de facto chairman, Barack Obama, issue a JFK man-on-the-moon-style challenge to turn our country into a nation of trains and buses and subways. For Pete's sake, people, we were the ones who invented (or perfected) these damn things in the first place!!

FIVE THINGS WE CAN DO TO MAKE CONGRESS AND THE PRESIDENT LISTEN TO US:

1. Each of us must get into the daily habit of taking 5 minutes to make four brief calls: One to the President (202-456-1414), one to your Congressperson (202-224-3121) and one to each of your two Senators (202-224-3121). To find out who represents you, click here. Take just one minute on each of these calls to let them know how you expect them to vote on a particular issue. Let them know you will have no hesitation voting for a primary opponent -- or even a candidate from another party -- if they don't do our bidding. Trust me, they will listen. If you have another five minutes, click here to send them each an email. And if you really want to drop an anvil on them, send them a snail mail letter!

2. Take over your local Democratic Party. Remember how much fun you had with all those friends and neighbors working together to get Barack Obama elected? YOU DID THE IMPOSSIBLE. It's time to re-up! Get everyone back together and go to the monthly meeting of your town or county Democratic Party -- and become the majority that runs it! There will not be many in attendance and they will either be happy or in shock that you and the Obama Revolution have entered the room looking like you mean business. President Obama's agenda will never happen without mass grass roots action -- and he won't feel encouraged to do the right thing if no one has his back, whether it's to stand with him, or push him in the right direction. When you all become the local Democratic Party, send me a photo of the group and I'll post it on my website.

3. Recruit someone to run for office who can win in your local elections next year -- or, better yet, consider running for office yourself! You don't have to settle for the incumbent who always expects to win. You can be our next representative! Don't believe it can happen? Check out these examples of regular citizens who got elected: State Senator Deb Simpson, California State Assemblyman Isadore Hall, Tempe, Arizona City Councilman Corey Woods, Wisconsin State Assemblyman Chris Danou, and Washington State Representative Larry Seaquist. The list goes on and on -- and you should be on it!

4. Show up. Picket the local branch of a big bank that took the bailout money. Hold vigils and marches. Consider civil disobedience. Those town hall meetings are open to you, too (and there's more of us than there are of them!). Make some noise, have some fun, get on the local news. Place "Capitalism Did This" signs on empty foreclosed homes, closed down businesses, crumbling schools and infrastructure. (You can download them from my website.)

5. Start your own media. You. Just you (or you and a couple friends). The mainstream media is owned by corporate America and, with few exceptions, it will never tell the whole truth -- so you have to do it! Start a blog! Start a website of real local news (here's an example: The Michigan Messenger). Tweet your friends and use Facebook to let them know what they need to do politically. The daily papers are dying. If you don't fill that void, who will?

FIVE THINGS WE SHOULD DO TO PROTECT OURSELVES AND OUR LOVED ONES UNTIL WE GET THROUGH THIS MESS:

1. Take your money out of your bank if it took bailout money and place it in a locally-owned bank or, preferably, a credit union.

2. Get rid of all your credit cards but one -- the kind where you have to pay up at the end of the month or you lose your card.

3. Do not invest in the stock market. If you have any extra cash, put it away in a savings account or, if you can, pay down on your mortgage so you can own your home as soon as possible. You can also buy very safe government savings bonds or T-bills. Or just buy your mother some flowers.

4. Unionize your workplace so that you and your coworkers have a say in how your business is run. Here's how to do it (more info here). Nothing is more American than democracy, and democracy shouldn't be checked at the door when you enter your workplace. Another way to Americanize your workplace is to turn your business into a worker-owned cooperative. You are not a wage slave. You are a free person, and you giving up eight hours of your life every day to someone else is to be properly compensated and respected.

5. Take care of yourself and your family. Sorry to go all Oprah on you, but she's right: Find a place of peace in your life and make the choice to be around people who are not full of negativity and cynicism. Look for those who nurture and love. Turn off the TV and the Blackberry and go for a 30-minute walk every day. Eat fruits and vegetables and cut down on anything that has sugar, high fructose corn syrup, white flour or too much sodium (salt) in it (and, as Michael Pollan says, "Eat (real) food, not too much, mostly plants"). Get seven hours of sleep each night and take the time to read a book a month. I know this sounds like I've turned into your grandma, but, dammit, take a good hard look at Granny -- she's fit, she's rested and she knows the names of both of her U.S. Senators without having to Google them. We might do well to listen to her. If we don't put our own "oxygen mask" on first (as they say on the airplane), we will be of no use to the rest of the nation in enacting any of this action plan!

I'm sure there are many other ideas you can come up with on how we can build this movement. Get creative. Think outside the politics-as-usual box. BE SUBVERSIVE! Think of that local action no one else has tried. Behave as if your life depended on it. Be bold! Try doing something with reckless abandon. It may just liberate you and your community and your nation.

And when you act, send me your stories, your photos and your video -- and be sure to post your ideas in the comments beneath this letter on my site so they can be shared with millions.

C'mon people -- we can do this! I expect nothing less of all of you, my true and trusted fellow travelers!

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com