FCIC, Washington, D.C.

Posted by: Abel Collins

Believe what you will about the current state of the economy, whether it is that we are in the midst of a recovery or that we are still mired in a recession, there is no denying that gross financial crimes were committed to enable and sustain the housing bubble economy of the last decade. As yet, there has been no serious investigation of those crimes let alone prosecution. In fact, the Bush and Obama administrations have gone to extravagant lengths to cover up the depth of corruption on Wall St. and at the regulatory agencies that were supposedly put in place to protect the American public. Our leaders try to justify this obfuscation by claiming that if we were to be given the truth, we would lose the faith in our economic system that allows it to function. A simple question rises in my mind. Do we want an economic system that can only survive through secrecy and lies, a system whose foremost concern is catering to the demands of a cartel of banks?

At this stage of the Savings and Loan Crisis, involving significantly less grievous financial crimes in comparison to today’s mess, there were thousands of prosecutions and meaningful jail time was being served by the white collar criminals at the heart of the problem. Today, those at the center of this scandal are enjoying record profits. It reminds me of that Dylan line when he sings, ‘steal a little and they throw you in jail, steal a lot and they make you king.’ How are we to begin addressing this problem when all of the power seems to be in the hands of the banks and their army of lobbyists?

Today, I turned to C-SPAN to watch the initial hearing of the Financial Crisis Inquiry Commission (FCIC) in the hope that I might witness the beginning of a reckoning and a return of accountability to the financial system. Some of the CEOs of the large banks were brought before the commission, Lloyd Blankfein of Goldman Sachs, Jamie Dimon of JP Morgan, Brian Moynihan of BofA, and John Mack, chairman at Morgan Stanley. Unsurprisingly, their testimony can be summarized as vacuous apologies and evasions of responsibility. (You can watch the proceedings at the cspan link provided)

Sifting through the legalspeak and the financial jargon can be a frustrating and unproductive activity, but I sat and watched just the same. I watched because knowledge is power, and the public was largely victimized through its own ignorance. The people were sold a goldilocks economy, a perpetual motion machine, and they were told to believe that the laws of physics need not apply. As a society, we believed the lies, because in the short term it was to our benefit. We seemed rich, right?

Anyway, I watched to see what I might glean, and behold, wonder of wonders, I was rewarded. The vice-chairman of the commission, Bill Thomas, strengthened our tenuous grasp to democracy, inviting the public to get involved in the inquiry. The bankers agreed to answer in writing any question he would ask, and Mr. Thomas, in turn, promised to forward any questions he received through his email at billthomas@fcic.gov on to them. Regardless of our current conception of the economy, we must seize this opportunity to gain a better understanding. This is how we can empower ourselves, and at last find justice.

Here is the letter that I sent to the vice-chairman:

Dear Mr. Thomas,

Thank you for giving the people the opportunity to address this issue. I am happy to see that democracy is still alive in this country. We have an immutable right to address the grievances that the financial industry has perpetrated against the American public. I fear that all the responses that will escape the mouths of the bankers will be evasive and absolve them of whatever limited guilt they feel. Nevertheless, I would like you to ask:

1. What is an appropriate leverage ratio for a bank? Are you aware of the 12 to 1 ratio that functioned well for most of the last century?

2. What do you think about the potential re-establishment of Glass-Steagall?

3. Would your banks be solvent if you had to mark all of your assets to their fair market value and keep them on your books? Please do not tell me you don't know those market values. It is your job to know. Further, how much worse would it be if the federal government wasn't massively involved in supporting the housing market? If you plead ignorance, it will not shield you from culpability. It is your responsibility to your shareholders and the public at large to act prudently and be cognizant of risks.

Thanks again. I look forward to hearing any reply.

Take care,

Abel Collins
176 Sycamore Ln.
Wakefield, RI 02879

These, of course, are just a few of the questions that I want answered, and I will probably find the time put together a more thorough list, but it is a good start. I strongly encourage you to get involved as well. The bankers are firmly in control of this country at the moment, and this is our chance to make them answer to us.

http://www.c-span.org/Watch/C-SPAN2.aspx