Letter Writing

Posted by: Abel Collins

Despite my better judgment, I spend a lot of time thinking about politics and the economy; analyzing, criticizing, and basically trying to figure out what is going on in the world. From time to time, I get cynical and overwhelmed. At times like those, I take heart in the fact that I can take action do something about it. Letter writing is one action that I take particular pleasure in and that is sure to get a response. With email, it’s really easy to start a dialog with your political representation, and if you request the favor of a reply, they are required by law to respond.

Here’s a letter I wrote to my representatives today. I will post the responses I get to this letter in the comments section as they arrive. If you like it, you can even copy and paste it, and edit it to your liking. Google your legislator and go to the ‘contact ________’ button on their public site, then send it along. Otherwise, I encourage you to take the time to write your own letter and make our democracy a little more vibrant:


Dear _______________,

I was overjoyed today by the news that President Obama is going to take a hard line against the financial industry and follow the advice of Paul Volcker. It is my hope that you will do whatever you can to aid the President in his battle for real financial reform.

Not only must important aspects of Glass-Steagall be re-enacted so that the banks are not mixing commercial lending with speculative investment banking, but the banks must not be allowed to be so large that they pose a systemic risk. Please help craft legislation that diminishes the power and influence of major financial institutions, and I mean this to include holding the Federal Reserve accountable to its mandates. The economic system needs transparency in its financial sector to create a healthy and sustainable system. In other words, audit the fed.

Finally, I am greatly worried by the decision of the Supreme Court to allow unlimited corporate contributions to political campaigns. I would like you to consider proposing a constitutional amendment(s) to enact corporate reform. This country cannot afford to have more power accumulate in the hands of corporate interests. It is time to reconsider whether corporations are the same as individuals and what rights they really deserve.

Thank you for your time and your consideration. I look forward to hearing back from you on these issues.

Yours respectfully,

Abel Collins

Financial Activism

Posted by: Abel Collins

Today I took the first step toward moving my money out of Bank of America where I have kept it for several years. I went to a local credit union and started a checking account from which I will be able to do all of my banking. The terms on the new account are much better than the ones that I at BofA (2.5% interest versus .1%), but that is not why I am moving my money.

Two years into this financial crisis, it is obvious that banks are in large part responsible for the calamity. Financial institutions, primarily those now seen as too big to fail, rose to great influence over the past four decades (TBTF list here, http://www.ritholtz.com/blog/2009/03/19th-nervous-breakdown-tbtf-stress-test-banks/). They created financial innovations that allowed them to take on insane amounts of leverage. They encouraged so much debt that they guaranteed a credit bubble and its inevitable collapse. In fact, they engineered numerous bubbles, and at every opportunity said that deregulation would allow them to make a more productive and efficient financial system so it would never happen again. The banks made money on the way up and on the way down, and they used it to gain ever greater political and economic power.

By now, we are familiar with the results. The regulators and the legislators crafting financial policy were captured by the banking industry that they were supposed to be holding accountable. Regrettably, nothing has been done to reform this broken economic model. The reform that is proposed would be laughable if it were not so tragic, and even those weak measures will probably never be enacted.

It has become clear that the only thing the political system and the powerful people it represents care about is money. Therefore, I suggest that it is incumbent upon us to redress our grievances in terms that they understand. It is time for some good old nonviolent activism. It is time to stop giving them our money, and the logical place to start is with the TBTF banks.

If you do your banking with Bank of America, JP Morgan Chase, Citibank, Wells Fargo, Morgan Stanley, Goldman Sachs, or one of the other monster banks that control approximately 60% of the deposits of US citizens, it is time to move your money. Go to http://moveyourmoney.info/ and find out how to get started.

Time and again, massive nonviolent activism is the only effective way to realize revolutionary change, and it is time to bring it to bear on the economy. We must follow in the footsteps of great leaders like MLK, Gandhi, and Jesus, and refuse to support the system that abuses us. The first step is taking our money from the banks that control the system. If they do not listen then, if they simply turn to the government for another round of tax payer funding, we must resort to civil disobedience. We must sever the ties between money and politics, whatever it takes. Let’s get started.

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