[Contribution to the Reimagining Society Project hosted by ZCommunications]
May I date myself?
In my earliest days as an activist, in southern churches in the forefront of the civil rights movement, preachers engaged in call and response. There would be a fiery statement from the pulpit and a loud amen from the congregation.
People would be on their feet waving their hands, singing songs of affirmation and solidarity. Anthems like "We Shall Overcome" were not just spiritual declarations but statements of defiance and intent. Speechifying was in vogue from Dr King’s eloquent orations to Malcolm’s angry admonitions.
Those were Movement days, when masses were in motion, and not just out as street fighters or marchers in occasional mass mobilizations. It was a time of engagement and activism that people lived in their lives and cultures, not just in their intellects. That movement triggered a righteous anger and involvement. It defined decades. Sometimes it shook our country.
I lived it again in the anti-war movement and observed it up close and personally in the fight against apartheid in the townships of South Africa. We saw that resolve at Tiananmen and Tehran. It is still happening in other nations, sometimes now under the banner of Islam or issue related indignation in Honduras, Argentina, or in occasional anti-globalization protests even if the battle in Seattle seems a distant reality.
The most "effective" opposition to American imperial intervention in many countries is no longer in the streets of America but from armed insurgents in conflict zones whose vision and political aspirations are not necessarily ones we share. No one I know believed that Terrorism, either ours or theirs, will bring peace or change.
Why is it that our movements are so quiescent even as the situation in the world grows in so many ways worse than ever? Why did our movements splinter into subcultures, descend and divide into debates about identity politics and loose a mass organizing principle and focus on economic justice?
How did collective anger fragment into a collection of issue-oriented campaigners that rarely work together under common roof or big tent? Why are so many of us much clearer about what we oppose than what we are for. Is it just easier to tail after the Democratic Party than build organized movements with a real base outside of it?
Blame it on the depoliticizing impact of the mass media or mass entertainment. Credit the Democratic Party for co-opting our agendas, the mass spectacle for diverting our interests.
Is it that we have aged—surely not if you watch Noam Chomsky in action in his 80′s traveling the world and patiently explaining his analysis to anyone who will listen. Have we lost the patience to listen or work together in our speeded up ADD culture where TWITTER becomes the perfect expression what we used to call KISS—Keep it stupid and simple.
We all know it is easier to fire off angry emails than work as organizers in the long march through issues and institutions. For some it’s easier to embrace injustice in other lands than to focus on the political sewer of our own politics. It’s more fun to watch John Stewart or Bill Maher and laugh at the idiocy, which can also leave you feeling superior and smug.
Most of us lived with American administrations that were easier to expose than the Obamacrats who came to power my appealing the desire for change with all the symbolism of civil rights and opposition to war driving it. It elected a President who remains popular, often says the right thing
Following our Breaking News media just forces us to respond to new developments rather than create issues and campaigns that they have to respond to.
Isn’t THE issue not right in front of us? Can’t we see it? Can’t we respond to the opportunity that all the specialized reform groups—environmentalists, media reformers, election fixer and even the unions seem to be missing when it comes to a unified response.
Clearly, we are, if we ever were, in a revolutionary time. The world economy is imploding. Unemployment is growing with the IMF predicting hundreds of millions out of work amidst fears of mass starvation. In our country all the stimulus programs and bailouts are not up to the task of economic recovery. Even liberal economists like Robert Reich and Paul Krugman see that. The right wing senses that this is the issue, the ticket, to get back into power because Obama’s programs will most certainly fail.
A recent article in Harpers compares Barack Obama not to FDR but to Herbert Hoover convinced that the economy will be his waterloo.
The best indications now are that he will fail, because he will be unable—indeed he will refuse—to seize the radical moment at hand.
Every instinct the president has honed, every voice he hears in Washington, every inclination of our political culture urges incrementalism, urges deliberation, if any significant change is to be brought about. The trouble is that we are at one of those rare moments in history when the radical becomes pragmatic, when deliberation and compromise foster disaster. The question is not what can be done but what must be done."
ONE MORE TIME: WHAT IS TO BE DONE?
So, my friends, colleagues and comrades, what must be done?
It’s the oldest question the left has ever raised and often failed to answer.
At the same time, if there is one issue that progressives, radicals, and revolutions have focused on historically, have identified with and been identified with is how to bring about economic justice. Surely that was the basis of Marx’s work, of the drive to form unions, even the Civil rights movement, which culminated in a March on Washington that demanded, let us not forget, JOBS and Justice.
Why are we not today, at this very moment, in the forefront of the fight for economic justice as so millions lose jobs, workplaces, homes and hope? Why are we not tracking the economic decline and helping to organize a fight back.
This challenge has to be at the top of our agenda.
How can we re-imagine society without challenging the economic domination of the many by the few, and challenge the banksters and politicians who are robbing us all?
That’s why I’d like to make an argument for a campaign focus on the economy even as there seems to be so little activism on it—protests at the banks, rallies at factory closings, consumers opposing credit card companies. sieges at the investment houses, disruptions of foreclosure sales, challenging racially discriminatory disparities (ie. Twice as many blacks out of work here in New York according to today’s Times), or for that matter the creation of any program of insight and action outlining what we are against and what we are for, what kind of economy we are prepared to fight for and live in. Where is our manifesto on this central issue.
It is towards that end that I share these thoughts.
Some years ago, I made a film called IN DEBT WE Trust because I was tired of just reaching out to people I agreed with. It exposed the financialization of our economy, and way millions were becoming prisoners of debt and literally being turned into serfs. I was one of the first to expose subprime lending and warn of a coming credit crunch.
Predictably I was called an alarmist and doom and gloomer. And not just from the mainstream. Most activists were not seemingly very interested in economic issues—how credit card companies and avaricious banks were transferring wealth from working people to the richest institutions, from our pockets to theirs. They were focused on the war and other issues like getting Obama or Kucinich or Nader elected.
The issue was given some lip service but few saw it as a way to organize. Groups like ACORN or NACA (Neighborhood Assistance Corporation of America who were fighting big banks and foreclosures were rarely supported. The suffering in our poorest communities wasn’t even getting much attention—with some exceptions—in what was left of the left press.
Left presses were not receptive either to the book I wrote" investigating our Economic Calamity" called PLUNDER. It came out a week before Lehman Brothers went bankrupt.
I am sure I was not alone in fearing that I w as talking to myself even as I wrote blogs for Mediachannel.org and commentaries on these issues for a host of websites including Z NET
The response to this crisis has been pathetic.
Now I am working on trying to reframe this crisis in perhaps a more populist way in language that most people can relate to—as a CRIME story. I am finishing a new film and book called THE CRIME OF OUR TIME. (For which, hint, hint, I am still hunting for a publisher and distributor!) Film screenings could be one tool in organizing outreach.
I believe this approach should be part of a major new GLOBAL campaign to take on the men FDR called BANKSTERS and challenge the complicity between governments, the financial sector and the major media in continuing a massive rip-0ff and wealth transfer that is stealing the value of our pensions and retirement funds, homes and livelihoods.
The large number of victims of this crisis can and must be mobilized. As I learned years ago, "its not the ship that makes the wave, it’s the motion on the ocean."
My sense is that a mighty mass anger is growing. Did you know that more American men are out of work than anytime in our history?
Will this rage be co-opted by the right, by demagogues like Rush Limbaugh, Sean Hannity and Glenn Beck et.al. with their electronic soap boxes, or fanatics and anti-Semites who are already blaming minorities defrauded in subprime scams? Trust me, the militias are mobilizing deluded into believing that socialism is taking over. This is a country with a long history of violence and class warfare.
Even people who don’t like to talk about money will talk about this. The anger we saw expressed in the revulsion to the first round of AIG bonuses—the so-called "pitchforks"—is but the tip of a melting iceberg.
Overseas observers like the economics editor of the Guardian, Larry Eliot observed more than a year ago:
"It is now clear that no end is in sight to the turmoil, and the reason for that is that the Fed and the US treasury are no closer to solving the underlying problem than they were eight months ago."
He expects a social explosion when homeowners understand the way they were targeted, writing, "It is somewhat surprising that there is not already rioting in the streets, given the gigantic fraud perpetrated by the financial elite at the expense of ordinary Americans."
Why aren’t we encouraging this explosion and offering some insights on its direction perhaps with a campaign of national teach-ins in communities and campuses, when the universities are back in the fall? (Recall the Vietnam teach-ins seeded the anti-war movement and radicalized it?)
FOCUSING ON CRIME
Slowly, the existence of pervasive financial crime and fraud is more visible—a subject we can all popularize and build a movement to end
As the current implosion deepened, as business and banks melted down, as billions were spent on bailouts and stimulus packages, as ordinarily un-beat commentators began to fear a systemic collapse. President Bush spoke openly of the danger of a "great depression greater than the great depression." The arc of political punditry didn’t change much in the fall and winter of 2008, but it was clear something very mysterious and serious was going on.
We were in crisis mode, but what was behind it? A string of failures were cited—a failure of judgment, an industry failure, a risk failure, a regulatory failure, a policy failure etcetera, etcetera. The blame game had begun. The media frame became we were all too blame, guilty of greed, overspending and under-saving.
And when it’s everyone’s fault, no one can be held responsible. The circle is quickly closed.
As the crisis lurched forward, from bad to worse, from Wall Street to Main Street and then worldwide, the story only became more challenging to understand and explain.
A financial crisis has created a social crisis. The public, quiet at first, uncertain of what was happening or why was ready to led its new President handle things.
Now resentment is growing as cutbacks lead tear up what there is of a social safety net with schools closing and services shut off. The most vulnerable among us are feeling this and food pantries report record attendance. Think of what’s going to happen when unemployment benefits and welfare assistance tapers off.
Many of Obamas most fervent supporters are becoming critical.
As strange anomalies appeared, there was growing interest from law enforcement into patterns of fraud and white-collar crime. This was not unexpected given the recent history of high-profile intersections of corporate behavior and crime.
Bernie Madoff was not alone. Investigators say there is a "ponzinomium" underway.
Even if our society has a amnesia problem with yesterday’s news like the S&L crisis or fall of business giants like Enron and WorldCom, the very thought that recent history could be a guide to contemporary events doesn’t resonate that widely. Our news cycles are firmly grounded in the moment of now; the breaking news presents, and has little time for context, background or connecting dots.
So it took me awhile to realize that the inquiry into how this could have just happened was largely missing and that the best our top media outlets could do was come up with lists of factors that were always somehow unrelated like some lone gunman in the Texas Book Depository.
There was broad disagreement on what and who was to blame. Donald Trump, that icon of American capitalism, called today’s financial collapse an act of God and blamed bankers for intensifying it. He used that argument to try to convince a Court to allow him to default on a construction loan to the Deutsche Bank under the Force Majur clause of his contract. (Ie. He was not at fault.)
Brazil’s president Lula, noting that poor people the world over were suffering through no fault of their own, condemned "white people with blue eyes on Wall Street."
The New York Times offered neither a racial view nor divine assessment instead devoting an acre of print to explain the SIX "errors" behind the crisis. (Oddly, eight months later President Obama unveiled a financial reform package to fix what he also called "mistakes.")
The Times offered up this list all endorsing a "how we blew it" analysis:
1. WILD DERIVATIVES
2. SKY-HIGH LEVERAGE
3. A SUBPRIME SURGE
4. FIDDLING ON FORECLOSURES
5. LETTING LEHMAN GO
6. TARP’S DETOUR
Nowhere did this list reference predatory lending or "white collar crime." Challenging this view was Professor/author Michael Hudson, former chief economist at the Chase Bank (and, as it turns out, a cousin of Leon Trotsky, a relationship that Chase was probably unaware of.)
He told me: "In practice, fraud is what has brought down almost every single expansion, every bank take over, the saving and loan crisis in the 1980′s, the stock market crisis in the 1920′s…"
In fact, a closer look at what happened in both of these events was substantial corporate larceny.
William Black was one of the bank regulators who disentangled the S&L crisis. He told Bill Moyers that the banks that that failed were deliberately brought down.
"The way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you’re a Ponzi-like scheme. And the third thing you do is, we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there’s going to be a disaster down the road."
Moyers asked, "So you’re suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?"
William Black: "Yes."
Flash back the Great Crash of 1929 and you have legendary economists like the late John Kenneth Galbraith who I met and interviewed before he died arguing that it occurred largely because Capitalism is inherently unstable compounded by widespread "corporate larceny."
Galbraith cited the findings or the Pecora Commission, which in 1932 investigated the causes of the 1929 crash. It uncovered a wide range of abusive practices on the part of banks and bank affiliates. They were widespread fostered by many conflicts of interest involved underwriting securities later recognized as unsound order to pay off bad bank loans as well as "pool operations" to support the price of bank stocks.
There was outrage then when banker JP Morgan admitted he had paid no taxes for two years. He was then one of the richest men in the country.
Historian Steve Fraser discussed how the con men and criminal of this period were regarded:
"With the crash of 1929, some fled the country; others committed suicide. The president of the New York Stock Exchange, Richard Whitney, whose blood lines went back to the Mayflower, whose brother was a senior partner at J.P. Morgan, who had been educated at Groton and Harvard, who hunted foxes and took for granted his right to rule, was carted off to Sing Sing after being convicted of fraud and embezzlement."
From Duer (An Early American Speculator who ended up in debtor’sprison) to Whitney, the sorry doings of these businessmen inspired two public responses. One was to lock them up (sometimes preceded by chasing them through the streets). The second was to attempt to treat the institutional roots of the problem through government regulation."
In the 1930′s, The commission’s Chief Counsel Ferdinand Pecora concluded, "Legal chicanery and pitch darkness were the banker’s stoutest allies."
• There has been more than legal chicanery with a total rewriting of the laws themselves creating a deregulated environment that allowed formerly illegal practices to be considered legal.
• That environment was promoted through the expenditure of hundreds of millions for lobbying legislators and campaign contributions and extensive collusion by politicians of both parties.
• There were cutbacks in government monitoring of financial practices with fines and "settlements" in large part (with some exceptions) replacing vigilant oversight and the prosecution of wrong doers at the federal and state level.
• The environment was enabled by privately controlled but nominally publicly accountable institutions like the Federal Reserve Bank operating in tandem with Treasury Departments staffed by industry appointees.
• Today’s "pitch darkness" was provided by many media institutions that looked the other way as when it mattered at the growth and fusion of shady securitization practices with subprime and other predatory lending
• There’s been the creation of a "shadow banking system operation" outside and above the law with trillions of dollars unregulated and in some cases unaccounted for in off shore financial hideaways.
• There has been collusion between top firms and their "counter parties’ with fraudulent practices, crimes and rip-offs of massive proportions.
None of this was new. It was a phenomenon denounced centuries ago by the French free market apostle Frederic Bastiat who showed how law could be rewritten to permit plunder:
"The law has placed the collective force at the disposal of the unscrupulous that wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder."
But because this has happened before in a system that has little interest in learning from history does not make it any more urgent to reframe and redefine what’s happening now.
To come to the view that the financial crisis is at its origins a crime story involved my interviewing insiders as well as economic experts and historians. My research is ongoing as each day seems to bring new arrests and charges by regulators and courts who can no longer ignore the stench in their midst.
When I started moving in this direction, I felt very alone because book after book by insiders purporting to explain the collapse of a "house of cards" -the cliché de jure—avoided or minimized the criminal aspects discussed in this book.
But there were others who saw it too.
Nomi Prins was a former banker at Goldman Sachs and Bear Stearns who helped fashion some of the derivative products at the center of our economic collapse.
I interviewed her on Wall Street on a freezing December day as a large BRINKS document destruction trucks prowled out of alleys behind the Stock Exchange and nearly hit our cameraman. She saw where I was going at once and joined in.
"This is the most expensive takeout, the biggest crime in world history," was her lead.
"We’re talking about a crime we can’t even quantify because so many assets were created and so much money was borrowed on the idea that they would exist and so much of that has disappeared. You’re talking double-digit trillions of dollars minimum already in the beginning of 2009 and we are nowhere near done with finding out how much loss there really is."
One estimate of monies lost, value depreciated, and spent to try to stabilize the system came to $197.4 Trillion, and that may be low.
At the same time, back in 2008, the year of the meltdown, the number one crime story on TV was the case of Casey Anthony and her missing 2-year-old daughter, Caylee, which had captured the attention of the nation as no other in recent history. OJ Simpson’s arrest rated second, The Jennifer Hudson family murders third, etc and so forth.
Lists like these define crime in terms of perpetrators and victims. Financial crimes, however huge and that do more damage, didn’t make the list.
Yet, you would think that a crime of this proportion would not escape media attention.
It didn’t, at least in the eyes of one editor of a slick upscale monthly that covers the elite, and which carried many articles on aspects of this crime. Vanity Fair’s Graydon Carter wounded up and pitched this J’ Accuse down the middle but few of his colleagues swung at it.
I am going to put it in a box because it deserves to be etched on the wall of the well-protected New York Stock Exchange.
It can fairly be said that the chain of catastrophic bets made over the past decade by a few hundred bankers may well turn out to be the greatest nonviolent crime against humanity in history. They’ve brought the world’s economy to its knees, lost tens of millions of people their jobs and their homes, and trashed the retirement plans of a generation, and they could drive an estimated 200 million people worldwide into dire poverty.
In other words, never before have so few, done so much, to so many. (Emphasis mine)
Harvard Business School Professor Shoshanna Zuboff goes even further comparing some Wall Street financiers to the Third Reich’s Adolph Eichmann in the sense that there was a "banality of evil" in both eras.
"The economic crisis is not the Holocaust, "she writes, "but I would argue it derives from the same business model that routinely produced a similar kind of remoteness and thoughtlessness by a widespread abrogation of individual moral judgment. As we learn more about the behavior within our financial institutions we see that just about everybody accepted a reckless system that rewards transactions but rejects responsibility for the consequences of those responsibilities."
I wondered how a convicted white-collar criminal would feel about this indictment. I turned to Sam Antar, once the CFO at the long-closed Crazy Eddies, a New York electronics chain, who says he and members of his family stole millions until he was caught and turned by federal prosecutors.
He didn’t say, "crime, what crime?" Quite the opposite. He went in to considerable detail in a distinct Brooklyn accent:
"This crime has been 10, 15 years in the making. It’s been going on. We’re only finding out about it for one specific reason: the tanking economy. Imagine if the economy didn’t tank? Imagine if this was allowed to go on for 4 or 5, 6, 7 years? Imagine how big it would’ve gotten then?"
How did they get away with, I asked. Antar spoke to me like a little boy who was naïve about the big bad world
"The white-collar criminal has no legal constraints. You subpoena documents, we destroy documents; you subpoena witnesses, we lie. So you are at a disadvantage when it comes to the white-collar criminal. In effect, we’re economic predators. We’re serial economic predators; we impose a collective harm on society."
Moreover he says many "legitimate" businessmen are at heart opportunists and will break the law when they think they can get away with it or when they are feeling pressure to make drive up revenues.
Now a blogger about white-collar crime, Antar cited research: "The ACFE, the Association of Certified Floor Examiners, does a study every year. About 90 to 95 percent of all white-collared criminals have no previous criminal record. And the higher the economic value of the crime, the less likely white-collared criminals will have a criminal record. So therefore, it’s very hard to profile these guys."
How do they get away with it?
"Most white-collar criminals are pillars within their communities. They’ve never had criminal records; most of them are very good parents; most of them give money to the arts. Enron’s Ken Lay built stadiums and gave millions to the arts. But most people often, most people are fooled by the wall of false integrity that white-collared criminals build around them."
How will we fill in the blanks in our collective knowledge about practices that are deliberately camouflaged and kept secret? As I write, new white-collar crime cases are trickling out, but usually, one at a time, with little connecting them in a public mind whose attention span is defined by distraction occasionally interrupted by a focus on individual bad guys but not institutional practices and patterns.
At the same time, from time to time, you hear complaints of prosecutors being too aggressive. Historian Steve Fraser comments on that canard
"Complaints about overzealousness on the part of government prosecutors are not only the height of hypocrisy, they betray a willful blindness to the lessons of the past, even when the past is repeating itself all around us."
We need a new Pecora Commission with subpoena power to investigate the causes of this crisis—and it’s too bad that a man with the stature of John Kenneth Gailbraith is not alive to chair it.
Senator Bernie Sanders is calling for just such a commission complete with an investigative staff and subpoena powers. Why don’t all progressive groups, media, unions, and concerned organizations endorse this call? Probably because most are not paying attention.
Yet even if Commission is formed, there is no certainty that it will get at the truth. Economist Dean Baker fears that a proposed Commission to assess blame is being undercut, writing, "there is a real possibility" that the commission appointed by Congress may cover-up the real criminals.
"Instead of striving to uncover the truth, it may seek to conceal it," he fears.
That should not stop us. Why not convene our own commission or even TRIBUNAL like the one I covered in Stockholm back in the l960′s—Bertrand Russell’s Vietnam Crimes Tribunal. We need a tribunal on the crimes that are stealing our future from us and will impoverish our people.
I have been thinking a lot about a program for change. It can be simple and tap into the anger that’s out there. For starters, may I suggest looking at how a new online advocacy group that calls itself A NEW WAY FORWARD (anewwayforward.org)
Our plan: Real structural change of Wall Street
Any bank that’s "too big to fail" means that it’s too big for a free market to function. The financial corporations that caused this mess must be broken up and sold back to the private market with strong, new regulatory and antitrust rules in place — new banks, managed by new people. An independent regulatory body must protect consumers from predatory practices.
As Wall St. corporations grew bigger and bigger until they were "too big to fail," they also became so politically powerful that they led to distorted and unfair policies that served companies, not citizens.
Its not enough to try to patch up the current system. We demand serious reform that fixes the root problems in our political and economic system: excessive influence of banks, dangerous compensation systems, and massive consolidation. And we demand that the reform happen in an open and transparent manner.
Big bankers ruined our economy and now they are gaming the political system so they can profit even more off the crisis they caused. They must be stopped."
Well, this is a star, a program to be built on and popularized, but it but it also shows some energy and opposition emerging outside left circles. Can’t it be encouraged, supported and dialogued with?
We need a national people’s Congress on a large scale, a meeting over several days to discuss these issues with as many interested organizations and individual , debate a major way forward and come up with an action plan.
This does not necessarily mean an abandonment of our traditional concern and responsibility to the world, and the victims of imperial intervention. We are all concerned about Gaza and Palestine and Iraq and Afghanistan and Pakistan and Honduras and Venezuela and Mexico and all of the issues and causes that have from time to time brought us and others to the barricades worldwide. We have to continue to support the rights of all peoples seeking respect, self-determination and justice. We can remain internationalists in an age of interdependence.
But we also have to, as a matter of some priority, focus more on what is happening in our country and to our country. Surely, the rest of the world knows that a real change in American policies will make change more possible elsewhere.
At the same time, if the left is to survive, if it is to grow, if is to educate and radicalize, we need to renew, rebuild, and revive with new activists who build bridges between generations and races and everyone with a stake in creating a more just world order, we need to find issues with appeal that we can organize around.
And I mean, organize, organize, organize.
We are in a new period of possibilities. It calls us to think in fresh ways and abandon tactics and dead ends that have rendered many of our movements invisible or ineffective.
The call of 2009 is an old one with a new potential.
It is time to unite—and act.
ML King called us so many years ago, to respond to the "urgency of now."
I am ready to respond again. Are you?
Danny Schechter, "the News Dissector" has been politically active for longer than he would like to admit. He edits and blogs for Mediachannel.org, has written ten books, made 30 films, went from the streets to the suites, and back again and remains mad as hell.