Friday, October 28, 2011

Occupy Oakland

As a follow-on to Professor Pierre-Louis's excellent post yesterday in connection with violence that broke out during the Occupy Oakland protests this week, below is the response that Mayor Jean Quan, mayor of Oakland, CA, issued last night:

"CITY OF OAKLAND, 1 FRANK H. OGAWA PLAZA ٠۰ 3RD FLOOR ٠۰ OAKLAND, CALIFORNIA 94612

October 27, 2011

Mayor Jean Quan’s Statement to Occupy Oakland

I had hoped to speak directly to you tonight. I was told that I could speak at the Speak Out at 6 pm, but that was cancelled. So I apologize for providing these remarks in written form.

I am deeply saddened about the outcome on Tuesday. It was not what anyone hoped for,
ultimately it was my responsibility, and I apologize for what happened. Today I visited Scott Olsen and his parents because I was concerned about his recovery. And I hope we will keep them all in our prayers.

We have started an investigation into the use of force, including tear gas, on Tuesday.

I cannot change the past, but I want to work with you to ensure that this remains peaceful moving forward.

When there’s violence, there are no winners – it polarizes us and opens old wounds rather than brings us together, which is the aim of Occupy Wall Street and uniting the 99%.

We are a nation in crisis. Oakland more than most cities faces budget cuts, unemployment and foreclosures. We are also a Progressive city. And as a long-time civil rights activist and union organizer I want my City to support the movement.

Thank you for last night’s peaceful protest. I will continue to order a minimal police presence. I need you to maintain a nonviolent attitude towards people, business owners, and homeowners around City Hall. I hope you will consider starting a dialogue with the small businesses around City Hall that you impact.

We pledge to work with Occupy Oakland and Occupy Wall Street, but we need to ask for four things:

1) We understand that some members of Occupy Oakland want to meet with me and Chief
Jordan. We agree. We need to have direct communications between city staff and your
representatives.

2) We need you to maintain healthy and safe conditions where you gather.

3) We need our public safety employees to have access when there is an emergency.

4) We are asking you not to camp overnight. Frank Ogawa Plaza is open for free speech
activities between 6 am and 10 pm.

We can change America and but we must unite and not divide our city. I hope we can work together.

/s/ Jean Quan
Mayor of Oakland"

Wednesday, October 26, 2011

Occupy Wall Street IX: One Cannot Resist the Invasion of Ideas

The violence that erupted in the Occupy Wall Street protest in Oakland Park is unfortunate but also eerily predictable. It was only a matter of time before more “zealous” protesters joined the fray and police would be ordered to enforce the “unlawful assembly” ordinances that most municipalities have on their books. It was only a matter of time before the intellectual ideology of the protesters had to confront the cold hard metal of a police officer’s rifle, baton, tear gas or handcuff. It was only a matter of time before there was blood in the streets.

Many credit Professor Elizabeth Warren for providing the intellectual foundation for the development of the Occupy Wall Street movement. After all Professor Warren has been protesting Wall Street for a very long time. She commented recently that Occupy Wall Street is an “organic movement, it expresses enormous frustration and gives a great faith all across the country for people to talk about what’s broken.” I agree. As the middle class continues to erode during this double dip recession, millions are asking why. As people continue to suffer from the loss of their jobs, their homes, their health care, their children’s education fund, and their own retirement funds, a sense of hopelessness has morphed into anger, and anger into protest. However, protest does not necessarily equal violence. The two are mutually exclusive. There is no rational reason why the protest in Oakland Park resulted in violence by the police, other than as an intimidation tool. Physical pain has always had a very sobering, demoralizing, and dehumanizing effect.

Elizabeth Warren recently stated that “Wall Street’s tricks brought our economy to the edge of collapse and there hasn’t been any real accountability.” Professor Warren understands why people are so angry and why they are taking their fight to the street. What Wall Street needs to understand as Hugo Marie Voltaire once stated over 160 years ago “on resiste a l’invasion des armees; on ne resiste pas a l’invasion des idees.” In other words, “one can resist the invasion of armies; one cannot resist the invasion of ideas.”

Lydie Nadia Cabrera Pierre-Louis


Occupy Wall Street VIII: Corporate Welfare

While President Obama touts a modest new jobs bill as well as a modest new federal program to assist homeowners in refinancing home loans at lower interest rates, Occupy Wall Street and Professor Steven Ramirez decry these comparatively minor assistance efforts geared toward American citizens when compared to the massive bailouts and major assistance provided to corporations and Wall Street bankers. In fact, the massive corporate bailout continues through a never-ending line of cash provided to banks by the Federal Reserve. Rejecting Corporate Welfare and instead bailing out American citizens seems to be one of the rallying cries of Occupy Wall Street. Despite this cry, U.S. policy seems intent on providing vast Corporate Welfare while simply frittering around the edges of providing genuine assistance to American taxpayers.

And now, in news that will certainly inflame Occupy Wall Street protestors, recent reports indicate that commercial banks are no longer satisfied in simply short selling or foreclosing on American homeowners. Major banks are not only foreclosing on U.S. citizens, they are now, with increasing frequency, suing these foreclosed homeowners for the difference in price between the outstanding loan and the cash gained upon the foreclosure sale. Recently, this “foreclosure hangover” i.e., obtaining deficiency judgments — when the foreclosed home fetches less than what is owed, the bank sues the homeowner for the debt — has been on the upswing. Forty-one states and the District of Columbia allow lenders to add insult to injury, and sue the already-distressed borrowers for the remainder of the loan amount post foreclosure sale.

In Lee County, Florida, foreclosure hangover judgments are up 34% from last year, despite the fact that the number of foreclosures have decreased. With savvy investors lurking in the background and hoping to take advantage of these distressed-debt deals, this foreclosure hangover will continue to linger. With a surefire judgment possible against borrowers when the foreclosure does not clear the debt, banks and investors seemed poised to pounce upon the vulnerable.

Just when borrowers believe they are clear of the loan based on the foreclosure, they are being sued for recovery of the total debt. To be clear, many banks that accepted bailout funds from U.S. taxpayers, are now turning the continuing mortgage crisis to their advantage, by foreclosing, and then suing the taxpayers for the balance of the debt owed. Meanwhile, Corporate Welfare continues with no end in sight. Occupy Wall Street loudly cries for an end to this pattern. Bailout people, not banks.

Sunday, October 23, 2011

Occupy Wall Street VII: BAILOUT PEOPLE NOT BANKS!

Excessive debt plagues the global economy today. The entire world gorged on easy money during the credit boom and now we need to decide who bears the losses from the debt-binge. The answer is both morally and economically simple: creditors and banks that make ill-advised loans must face the pain of bad loans. This simple answer means they will exercise more caution in future lending decisions and that they get only the protection they bargained-for. If they wanted the maximum safety they should have lent to the U.S. government or Japan or Germany. Instead, they chased higher-yields, and made subprime real estate loans or lent to Greece or made risky bets on derivatives.

Under no circumstances should they be permitted to have their cake and eat it too--they cannot pocket the profits of risky banking and lending and now obtain unbargained-for guarantees from governments around the world. This is the fundamental economic injustice in the world today because while 99% of the innocent taxpayers bear the costs of the debt bubble, the 1% who profited most continue to control our financial system and continue to enjoy windfall profits from the bailouts arranged by their pals in government (in the US that means both major parties). Worse yet, much of the bailout money ended up in the pockets of the very managers that caused the crisis. The government expended trillions to bailout financial elites, including extended stealth bailouts, that continue through today. Indeed, the government even bailed the bankers out of jail and now intends to bail them out of their ongoing foreclosure fraud.

Meanwhile, in Europe the banks remain under-capitalized. Another round of bailouts is looming over there, and it threatens to engulf the US banks. The Europeans preach austerity to their people at the same time they seek more money for their banks from the US-supported IMF. If the European banks go down, the US banks will follow according to a recent US government report showing that our banks have at least $2 trillion in total European exposure. As Paul Krugman notes today the Europeans probably can only continue to argue about the placement of deck chairs on the Titanic, not save their banks. Meltdown looms and it may be worse than Lehman.

Instead of using US taxpayer money to bailout global banks, Occupy Wall Street should demand that the government bailout US citizens. Student loan debt soared and jobs contracted since the crisis and the government should reduce loan balances and defer payment in exchange for community service. Foreclosed homes should be available for rent by current occupants so that the supply of real estate for sale contracts and poverty is reduced. Finally, and most importantly, the US needs a jobs program (including massive grants for education and retraining) to rescue citizens from a financial crisis that is not of their making.

As for the financial sector, they must be allowed to fail this time, finally. All the senior managers should lose their jobs, be sued for gross negligence and face criminal penalties (in many cases, at least). Their employment agreements and deferred compensation would be terminated along with the rights of all unsecured creditors. This is the approach of the new Dodd-Frank law, if the administration follows that approach. Notably, this process includes debt destruction--that is, creditors will take losses and be forced to write-off debts which will facilitate deleveraging.

As many economists pointed out early on, rescuing the banks will not spur new lending. Only a bank with competent management and a clean balance sheet can do that. So, the government should seek to move good assets into new banks with competent managers as quickly as possibly. This will create conditions for renewed growth.

Occupy Wall Street should focus on this: Bailout people not banks!

Saturday, October 22, 2011

Occupy Wall Street Movement VI: Who Are The Protestors?

Who are the Occupy Wall Street Movement protestors? According to several media outlets, the Occupy Wall Street Movement protestors are:

“Messy, indolent, drug-addled, anti-Semitic, violent, disobedient, freeloading individuals who are comprised of an unrepresentative segment of the electorate.”

The media, in arbitrarily defining the members of the movement, are attempting to undermine the basis of the idea – that corporate corruption and greed has created a problem that is tearing at the financial fabric of our country. The critical question should not focus on who specifically identifies with the movement. Instead, it should focus on the essence of its existence. Yet again, the media consistently attempts to de-legitimize the movement for its lack of a clear and identifiable purpose or plan. This perspective is misguided. Especially considering that the primary critique is that there is a major problem, namely, that one percent of the population controls approximately 40 percent of the wealth. In other legal context, this disparity alone would be sufficient to shift the onus of any proof from the individuals claiming to be harmed to the individuals perpetrating it. For example, in the context of tort law, the doctrine of ”Res Ipsa Loquitur,” meaning that the action speaks for itself, applies to relieve a plaintiff of having to prove how a defendant’s behavior caused the resulting problem and shifts the burden of proof to the defendant. To invoke this doctrine, the law generally requires a showing that the accident is the kind that would usually be caused by negligence and that the defendant had exclusive control over the instrumentality that caused the accident. The mere fact that so much of our country’s wealth is concentrated in the hands of a few is highly compelling evidence that someone has been negligent. As for the second element, large corporations, through their power and influence, have exercised exclusive and unbridled control in making corrupt decisions. It is very difficult to articulate an exact path or solution to a problem when corrupt corporations have created a labyrinth of lies. As such, the media’s focus should be on the large corporations that have caused the problem, not The Occupy Wall Street Movement. More accurately, the Occupy Wall Street Movement should be applauded for bringing attention and focus to an important issue of social, financial and political concern, not unreasonably dissected.

Friday, October 21, 2011

Occupy Wall Street V: Diagnosing And Attacking The Symptoms Of Our Collective Disease

This past weekend, I witnessed the Occupy Wall Street movement up close and in full force in Portland, Oregon. When I returned to Eugene, Oregon, where I’m serving as a Visiting Professor this semester at the University of Oregon School of Law, the movement had peacefully taken over one of the main public parks downtown. I’m planning on stopping by this evening or over the weekend. The movement has been peaceful, and most importantly it has gotten a great deal of people thinking and talking. Here, in Oregon, students and people I meet on the street are abuzz about the movement and the financial condition the majority of Americans find themselves in today.

Last week, I conducted a lunchtime talk for students, staff, and faculty entitled “Race and the Financial Crisis: Sorting Myth from Reality.” This talk was well attended and resulted in many lengthy follow-up discussions with students and colleagues. Among students, many of my discussions have centered on the Occupy Wall Street Movement, what ideology it espouses and how it should move forward or morph into a political movement with lasting impact. My recent talk and subsequent discussions have forced me to think deeply about the Occupy Wall Street Movement, and to pose some strategic questions.

I commend the Occupy Wall Street Movement organizers, largely grass-roots individuals from all walks of life, young and old, brown, yellow, and white for the discussion and level of introspection that they’ve forced the American populace to confront whether they agree or disagree with the movement. I’ve followed the movement throughout its duration; I’ve watched an insipient movement grow into a national and international movement and dialogue. My meager suggestion to the Occupy Wall Street Movement is to hone in and focus on the public policy choices and paths of our business leaders and politicians (both Democrat and Republican) that have forced 99% of us into the dire straits we find ourselves.

I think the Financial Crisis or Great Recession has sparked frustration and despair not seen in this nation and world for several generations. Congress threw a lifeline in the form of bailouts and corporate welfare to big banks and Wall Street, but somehow forgot about Main Street. In Washington, we are politically gridlocked. Republican politicians would rather see one man lose his job, President Barack Obama, than debate meaningful policies to create jobs and opportunities for the masses. Republicans talk about “job creators” whose taxes we shouldn’t raise. When was the last time Paris Hilton, and other rich folks who largely inherited their wealth created a job? The so-called “job creators” are hoarders and consumers maximizing their own self-interest, utility and profit. I give the Republicans credit for acting from the same playbook and staying on message. They have better PR and marketing people than some of our biggest corporations. These folks stay on message, and stick to their talking points without deviation. This observation is reinforced on the rare occasions when I have the stomach to watch Fox News.

Democrats had their chance when they were a majority, early in President Obama’s term, and squandered the opportunities presented because of disunion, and lack of focus. In many ways, it is hard to tell a Democrat from a Republican in Washington. Personally, I think they are all drinking the same Kool-Aid. Democrats have adopted the rhetoric of Republicans. I’ve noticed lately, President Obama can’t finish a sentence or complete a statement without ending it with “…and it will lower the budget deficit” or "...we need to ease regulations." Democrats preach and cajole about the evils of regulation, much like their Republican counterparts. Democrats expound and trumpet free markets and private enterprise as much as Republicans nowadays.

Democrats and Republicans alike have failed 99% of us in American society. We have to keep the pressure on both parties. I say all of this to say clearly to the Occupy Wall Street Movement, keep the debate focused on the economic, political, and cultural policies that keep 99% of us indentured permanently to 1% of the population who own the means of production, and profit from their capital and investments while we slave away as laborers in the proverbial fields. Before a doctor can attack or treat a problem, he/she must first diagnose it. In my humble opinion, an economic, political, social and cultural doctrine that often goes unnamed, unidentified, and unspoken has gotten us in this terrible predicament. You ask what is it? What could this horrible disease be called? It is named Neo-Liberalism; and it took hold of our economic, political, social and cultural policies about 30-40 years ago.

Neo-Liberalism has four (4) main premises:

  • The rule of the market—free enterprise and private enterprise—which entails cutting public expenditures for social services like education, healthcare, and other public initiatives;
  • Deregulation—little to no government regulation where profit maximization by private market actors is jeopardized or perceived as being harmed;
  • Privatization—selling of state owned enterprises, goods, and services to private investors in the name of efficiency, which often leads to concentration of wealth and higher consumer payments and outlays for goods and services; and
  • Elimination of the concept of the “public good” or “community”—in other words, “individual responsibility” is valued at a premium, every man, woman, and child in society has to fend for themselves and if they don’t succeed they’re just “lazy” or “shiftless.”

Alas, doesn’t this all sound familiar. Business, political, social and cultural leaders have been pushing this false prophesy down our throats for years. Democrats and Republicans alike have pursued a Neo-Liberal agenda in Washington and in our respective state capitals, from Columbus to Sacramento. I’ll give you many Democrat and Republican examples (you can figure out for yourself which Administration or Congress hawked these policies):

Truly, the list goes on. I myself, and other bloggers on this blog, like andre cummings, Lydie Pierre-Louis, and Steve Ramirez, to single out a few, have written about the ill-effects of deregulation and Neo-Liberal policies on a multitude of levels. Neo-Liberalism has morphed into Neo-Feudalism in this nation; fewer control the vast majority of assets, resources, and real wealth in society. The wealth gap is continually expanding. 99% are the surfs and servants of the 1% aristocracy and overlords. We are in the midst of a New Gilded Age with new Robber Barons emerging each day.

The wages of sin of a small minority are being visited on a vast majority. The Wall Street elites who got us into this mess go unpunished for their crimes, while their victims, those of us on Main Street, have been wrongfully convicted and serve their sentence and do their hard labor and eat their prison food. Where is the Innocence Project when you need it? America needs you Barry Scheck! Overturn our convictions, the glove doesn't fit.

The Financial Crisis has been a wake-up or clarion call to a multitude of people. The consequences of the Financial Crisis have been visited upon those least responsible for the economic crisis (i.e. women, children, people of color, and the elderly) in order to prop up powerfully entrenched elites, and those responsible for the financial bleeding. Society is at a serious underappreciated crossroads. Clearly, in this nation we are decidedly moving away from our Keynesian Economic Assumptions: full employment; economic equality; and regulation of private cartels. American Capitalism is turning into Vulture Capitalism where the weakest die on the side of the economic road or highway and are devoured to sustain the wealthy and elites. We are witnessing a failure of capitalism. The dust will settle somewhere and it might not be pretty. The economic pressure cooker may very well explode.

I challenge the Occupy Wall Street Movement to take a page from the finely honed Republican playbook to stay on message, find a talking point and stick to it. I submit to you, in our sound bite society, message truly does matter. One of the real big issues that has gotten us to this point is Neo-Liberalism—Occupy Wall Street Movement ideologically and intellectually pick up on this message and educate your followers and the public on the ills of the doctrine. Advocate a return to Keynesian Doctrine—full employment, economic equality and extension of the American Dream to as many as possible, and regulation of private cartels in the interests of the public good or community. We are all in this together. We can't afford to allow our racial, social, gender, or class differences to derail us.

The Occupy Wall Street Movement has the eyes and hears of the American and international public, carry a clear message forward. I thank and appreciate the Occupy Wall Street Movement for sparking a positive and non-violent discourse on issues that inform our society. Young and old, and people of all shades and walks of life are forcing a debate on the structure of our society that will have what I suspect will be a lasting impact for years to come. In the 1990’s, President Clinton helped reinvent welfare, as we know it. In 2011, the new mantra should be to reinvent corporate welfare, as we know it. We can no longer afford to bailout Wall Street, and write a blank check for the mistakes and miscues of corporate elites. Generally, we can and should reinvent American Capitalism, as we know it, moving forward to a bright future, to recapture the American Dream we were all told we could reach for and achieve. Occupy Wall Street is helping us to do just that. More power to those of you spearheading a timely and vast movement!

Thursday, October 20, 2011

Occupy Wall Street (OWS) IV: Cincinnati Residents Take to the Streets

Occupy Wall Street (OWS) is a burgeoning anti-corporate America movement. Americans perhaps inspired by similar movements in Europe have take to the streets. The movement began in New York and is spreading through the country as consumers express their malcontent with American corporate greed and corporate shenanigans by demonstrating in downtown business centers, the parks, and in the non-proverbial streets.

Residents of Cincinnati, Ohio are no different. Cincinnati is an interesting place. Cincinnati has arguably the largest concentration of corporate headquarters in the country including Procter & Gamble, Chiquita Banana, Kroger, and Duke Energy. Yet, very few people seem to be aware of that fact. The exquisite architecture of downtown corporate buildings give way to run down townhouses in Over-the-Rhine with very little transition. One block is gorgeous and the moment you cross Cathedral Parkway, the reality of the economic, income and ethnic divide is almost jarring.

Two weeks ago I had the pleasure of observing and then in an impromptu moment joining a group of young, and old; men and women; black and white, prosperous and perhaps a little less so; liberals and conservatives; religious and not so religious as they marched from Lytle Park to Findlay Market in Cincinnati. The energy was electrifying to quote John Travolta in the movie “Grease.” As we walked, we talked. What became apparent is that contrary to what certain "experts" are stating, the OWS participants are very knowledgeable. They may not know all the intricacies of corporate governance, federal regulation, or fiduciary obligations but they do know that something is very very wrong. I commend them for being visible, and for raising the concerns of the common man by taking it to the streets.

Lydie Nadia Cabrera Pierre-Louis

Wednesday, October 19, 2011

Occupy Wall Street III: The Diversity of the 99%

Three weeks after the Occupy Wall Street movement began, I went to Zuccotti Park. The park, just minutes away from Wall Street, has been the epicenter of the occupation. The 33,000 square foot space was packed. In one corner of the park, musicians played drums and guitars while a group of occupiers danced. I walked to the other end of the park where a group watched a video presentation. Throughout the park the occupiers chatted, debated, and displayed signs relating to a wide variety of social injustices. Some were engaged in serious conversations, others were playful. I saw none of the anger that today’s New York Times described as the common thread among the occupiers. I saw animated, inspired, empowered, energized and exhilarated demonstrators. I visited the park around 9 pm on a Sunday evening, so the occupiers I saw were the ones who were spending their nights in the park. Some were unwashed, disheveled and slightly smelly. Others looked as though they had joined the occupation that day. Almost all of them were young.

I was in Long Island, New York this past weekend. On Saturday, I saw a group of about fifty protesters in Sag Harbor, a small peaceful, idyllic town in the Hamptons. This was a more affluent-looking group. There were young people there, but most of the demonstrators were in their forties, fifties and sixties. They were well groomed, slightly stoic, and seemed like the kind of people who would never spend the night in a public park. There was no music or dancing, but this too was part of the Occupy Movement.

The contrast between the mostly young protesters in lower Manhattan and their older counterparts in the Hamptons illustrates the potential power of the Occupy Movement. The two groups have few things in common. But, both groups have joined a movement protesting big business’ usurpation of economic and political power. It is not likely that the two groups would agree on many social or political issues, but big business has adversely impacted the lives of the members of both groups. This is the focus of the Occupy Movement. This is what we all have in common. The diversity and unity within the 99% is the source of its potential power. As dre cumming’s October 17th blog demonstrates, the occupiers have in fact articulated an agenda that focuses on economic injustice. It is true that there are people in the crowds that have gathered around the world in the past four weeks who lack focus or direction. Steve Ramirez describes this problem in his October 16th post. Some denounce capitalism and call for communism. Others protest racial injustice in the criminal justice system. But these extreme protesters do not speak for the Occupy Movement. I suppose that my biggest criticism of the Movement is that they may be too welcoming. They don’t want to deny a voice to anyone who feels disenchanted. They want everyone to speak. And this makes the Movement look as though it lacks direction.

The iconic sculpture of the Charging Bull of Wall Street sits a few blocks south of Zuccotti Park. After leaving the park on October 9th, we drove past the sculpture. I believe New York City officials were concerned that demonstrators would deface the sculpture so they had it enclosed in a fence and guarded by a police officer. I stopped and took the picture you see in this post of the barricaded bull. I found it disconcerting that the city decided to spend money to protect a sculpture from peaceful demonstrators. And, the symbolism is striking. Our economic future is corralled and stalled– just like The Wall Street Bull.

Tuesday, October 18, 2011

Occupy Wall Street II: A Challenge

Dear Occupiers: How do you keep the momentum going? I believe you should make connections with professional school students, in particular law and business students, for at least three reasons. The first reason to connect with such students is that they possess the training and skills needed to help your movement advance and achieve some of the proposed goals. Occupiers, you have energy engendered by outrage and a sense of "right v. wrong". But you need organization and strategy to accomplish the significant changes proposed. Business and law students are taught how to plan and how to analyze. Energize this population and you have access to potent resources.

A second reason to connect with business and law students is that many of these students hope to become one of the 1%; thus, they attempt to ignore or devalue your movement. However, some students are beginning to realize that for many of them a professional degree only will allow them to maintain a decent standard of living. Many students are worried about their financial futures, and their ability to obtain any job in their chosen field. Connect with such students and you may find energized, dedicated true believers, not detractors.

The third reason to forge connections with business and law students is that these professionals are (mostly) among the 99% that will impact the lives of the other 99% and may have the ability ultimately to impact the 1%. Business and law students need exposure to the real-world problems of the 99%. Students in business and law school easily may become isolated from daily events outside of academia. Typically, business and law school study leaves little time for anything else. Business and law school training rarely asks students to introspectively reflect on their career choices and on the ethical dilemmas that may arise in their careers.

Occupiers, I challenge you to connect with business and law school students.

Monday, October 17, 2011

Occupy Wall Street I: Formal Statement

Occupy Wall Street protested in strength at Times Square, NYC this past Saturday, October 15, 2011, as pictured. The movement is gathering in momentum and now seems to be resonating around the world. While Occupy Wall Street as a movement appears diffuse and leaderless for now, the frustration and anger that the hundreds of thousands of worldwide protesters feel is palpable. The anger primarily relates to the corporate and bank takeover of economies around the world. This blog has often expressed the dangers in adopting the Wall Street Economy as the official economic policy of the United States--one in which "what is good for Wall Street" is deemed without interrogation as "good for America." When the Wall Street economy is embraced as official U.S. policy, then we see a government willing to provide taxpayer funded bailouts that end up (a) rescuing Wall Street executives from their reckless and fraudulent conduct; (b) paying bonuses and executive compensation to corporate leadership at record rates, while unemployment skyrockets; and (c) paying lobbyists hundreds of millions of dollars in fees for lobbying against reform and new regulation. Simply stated, TARP bailout funds ended up in the pockets of lobbyists working hard against Dodd-Frank legislative proposals. Additionally, TARP bailout funds ended up as hoarded capital enabling near record executive compensation based on faux-profit balance sheets. Occupy Wall Street decries all of these corporate realities, and more.

Despite the diffuse goals of Occupy Wall Street, some have attempted to capture the movement in words. Below is a video link to one formal statement of the Occupy Wall Street movement as read by Keith Olbermann:



According to the Wall Street Journal, the worldwide protests have been primarily peaceful, though riots did break out in Rome, Italy. "The protest in Rome was one of many rallies taking place around the world as part of an international day of protest inspired by the "Indignant Ones" movement in Spain and the Occupy Wall Street protests in the U.S. Most of the protests were peaceful."

(photo of Times Square protest courtesy of AP)

Sunday, October 16, 2011

Another Night in Grant Park. . .With Occupy Chicago

Last night I observed the Occupy Chicago protests in the LaSalle Street Financial District and Grant Park--where the General Assembly meets daily to discuss what they stand for. The last time I was in Grant Park was on election night of November 2008 when Barack Obama made his victory speech. Overall, I was more hopeful for meaningful change on that night in 2008, than I am after visiting Occupy Chicago.

Ultimately, the Chicago Police Department arrested 175 protestors after I left. But, the cops seemed more supportive than hostile. It is truly a grass roots movement, and during the General Assembly anybody can speak their mind. In my view, such an inherently leaderless movement with the lack of any message discipline at all cannot effect change in modern America. The status quo simply holds too much wealth and power to be disrupted without a carefully orchestrated plan and message. Plan beats no plan and message beats no message.

Many speakers made cogent and important arguments regarding our economic realities. Some wondered about a so-called criminal justice system that incarcerates many poor people of color but allows powerful bankers to trash the economy with apparent impunity. Others noted that while valuable public workers like teachers, cops and firefighters face declining standards of living and job losses, financial elites enjoy mega-compensation for running an increasingly dysfunctional financial sector. One speaker highlighted cuts in social services that are apparently necessitated by the bailouts of Wall Street and the ruined economy. Many protested the fact that our economy fails to produce opportunities for even the highly educated, a key betrayal of the longstanding American social contract that promised prosperity to those who worked hard and earned a university education. These are well-founded points, backed by solid evidence that shows that financial and corporate elites have, in fact, rigged our economy so that they rake in millions regardless of merit while the vast majority of Americans face declining economic fortunes. It was inspiring to see ordinary Americans gather in peace to make their views known on these critical points.

But, many highlighted longstanding grievances having nothing to do with the current crisis that brought out the protestors. Thus, one speaker discussed the need to abolish the death penalty and another decried the number of mentally ill people we incarcerate in America. A flier shined light on the new book, The Assassination of Fred Hampton, that alleges the FBI murdered the Black Panther Leader in Chicago in the 1970s. An immigrant claimed he did not come to invade Chicago, but to occupy Chicago. These obvious wedge issues have long operated to entrench the power of elites, to divide working classes, and to ultimately give the powerful an additional political lever to use law to enhance their profits.

Worse, some spoke about nonsense or even made offensive points. An invitation to the next American Communist Party Rally in DC was issued (I forgot the date). The American Socialist Party also spoke. One speaker urged support for Rand Paul. He also urged the crowd to insist upon an audit of the gold held by the US. Another speaker argued that we should get rid of all corporations. Signs argued that "capitalism will never be democracy."

In the end, it would be difficult to craft a message of more limited effectiveness than that I witnessed at Occupy Chicago last night. Arguing in favor of communism over capitalism at the same time as supporting Rand Paul seems almost calculated to alienate as many potential supporters as possible.

I fundamentally support the key points motivating the protestors: Wall Street holds too much power and our government must prune it back; middle class workers need more jobs, more opportunities and urgent recapitalization; and our economy is rigged in favor of the very wealthy.

Unfortunately, without message discipline and a plan to really challenge the status quo, the success of the movement will prove fleeting and next November we will again be faced with limited choices for real change. The Occupy Wall Street movement needs a platform.

Saturday, October 15, 2011

Hedge Fund Magnate Raj Rajaratnam Sentenced To 11 Years In Prison For Insider Trading

On Thursday, disgraced billionaire hedge fund manager Raj Rajaratnam was sentenced to 11 years in federal prison for insider trading. Rajaratnam’s sentence represents the longest criminal sentence ever handed out in the United States for insider trading.

Federal prosecutors sought a heftier sentence in the range of 19 to 24 years according to federal sentencing guidelines. Rajaratnam’s lawyers argued for a sentence in the 6 to 8 year range, arguing that insider trading is a victimless crime. Judge Holwell cited a number of factors in mitigating Rajaratnam’s sentence. Among these mitigating factors, Judge Holwell identified Rajaratnam’s financial support of victims of the tsunami in Sri Lanka, Rajaratnam’s native country, victims of the major earthquake in Pakistan several years ago, and his support of victims of the September 11th terrorist attacks. Rajaratanm’s health also factored into the mitigation of his sentence; Rajaratnam suffers from advanced diabetes and kidney failure.

Previously, I wrote on this blog about the unprecedented and first-time use of wiretaps to convict Raj Rajaratnam, the then head of the Galleon Fund. The SEC and federal prosecutors have been very aggressive in their crackdown on “expert networks” and insider trading generally. Raj Rajaratnam’s conviction and sentence marks a growing trend to increase jail time and other penalties meted out to white collar criminals based on the monetary impact of their crimes. Rajaratnam’s sentence sends a stern message that insider trading does not pay. We might never see insider trading come to an end on Wall Street. However, one thing is certain, Wall Street titans will be careful to watch what they say and the conversations that they keep. What are your thoughts? Should Rajaratnam have received the maximum sentence? Is insider trading really a victimless crime?

Friday, October 14, 2011

Rabbit Hole Economics

In my recent Utah Law Review piece, Racial Coding and the Financial Market Crisis, I painstakingly lay out the underlying causes of the 2008 mortgage crisis. I identify fourteen (14) primary causes of the crisis, noting that the complexity of the forces that gathered to nearly derail the global economy, should not be piece-meal identified as singular causes of the crisis, because doing so fails to recognize the true nature of the collapse and is simply dangerous partisan politicking. Among the fourteen causes of the collapse, I identify (a) the Commodity Futures Modernization Act; (b) predatory lending; (c) credit rating agency failure; (d) predatory borrowing; (e) the Gramm-Leach-Bliley Act; (f) governmental cover (including HUD and the GSEs); and (g) Fed policy failure, amongst several others.

As if from a script of "what not to do in the face of financial failure," and as identified by nobel laureate Paul Krugman in his "Rabbit Hole Economics" NY Times Op-Ed, the Tuesday, October 11th Republican Presidential debate highlighted a series of candidates who are attempting to "piece-meal" identify a singular cause of the crisis and it is this: The Government. Failing badly to deliver economic messages of job creation and recovery, instead the candidates appear hell-bent on tasking the government with the fault of the financial crisis. Nothing proposed even begins to deal with the underlying causes of the crisis, and how to protect against one in the future. In addition, the same policy positions that led to the mortgage meltdown in the first place are now being touted as economic messages of hope (i.e., more tax cuts, less regulation of the capital markets, etc.).

In my Utah piece, I name this governmental blaming as "racial coding." If we can deflect attention from the failures of deregulation, shadow markets, unregulated over-the-counter trading of derivatives, and Wall Street executive recklessness, and instead, shift the blame onto our nation's minority poor, entering into loans they had no business purchasing through "governmental social engineering," then we will forever fail to deal with the true causes of the crisis and will bind ourselves to a repeat performance of economic failure.

Thursday, October 13, 2011

Capital University School of Law to Host Symposium on The Foreclosure Crisis on October 28, 2011

Capital University Law School’s graduate law programs will host a special one-day symposium for attorneys, accountants, real estate professionals, mortgage experts and others interested in the nation’s ongoing foreclosure situation.

"The Foreclosure Crisis: New Strategies for Addressing the National and Local Calamity" will be from 8:30 a.m. to 4:30 p.m. Friday, Oct. 28, at the State Teachers Retirement System building, 275 E. Broad St., Columbus. The symposium is made possible in part by sponsorship from Benchmark Bank.

The event has been approved for 5.0 CLEs for attorneys and CPEs for 5.0 accountants. The cost is $229 per person, $179 for Capital University Law School alumni, and $99 for employees of government and nonprofit organizations, including full-time law faculty. Register by Oct. 15 and save $25.

The symposium will feature The Roberta Mitchell Lecture presented by Steven L. Schwarcz, Stanley A. Star Professor of Law & Business at Duke University School of Law, who will speak on the topic, "Structuring Responsibility in Securitization Transactions."

Other speakers will include a luncheon presentation by Richard Cordray, Chief of Enforcement and nominee for Director of the Consumer Financial Protection Bureau, who will speak on the topic "The Work of the Consumer Financial Protection Bureau."

Other topics and speakers will include:

  • "Losing Our Homes, Losing Our Way, or Both? Foreclosure, County Property Records and the Mortgage Electronic Registration System," with Christopher L. Peterson, Associate Dean for Academic Affairs and Professor of Law, The University of Utah S.J. Quinney College of Law
  • "Views from the Front Lines: Hot Topics Involving Foreclosures," a panel presentation with moderator Professor Regina F. Burch, Capital University Law School. Panelists will be Judith M. McInturff, Esq., of Judith M. Mcinturff Co., LPA; Rick DeBlasis, Director of Litigation, Lerner, Sampson & Rothfuss; Susan Choe, Principal AAG, Charitable Law Section, Office of the Ohio Attorney General; Linda Cook, Senior Attorney, Ohio Poverty Law Center; and Daphne Moehring, Vice President, Benchmark Bank.
  • "Opportunistic Criminal Behavior: A Hidden Consequence of the Mortgage Foreclosure Crisis," with Creola Johnson, Professor of Law, The Ohio State University Moritz College of Law.
  • "If You Build It, Will They Come? Statewide and Local Approaches to Foreclosure Mediation in Ohio," with Jacqueline Hagerott, Manager, Dispute Resolution Section, Supreme Court of Ohio, and Eileen Pruett, Manager of the Small Claims Division and Dispute Resolution Programs, Franklin County Municipal Court.

Please attend. This promises to be an informative and powerful event. An informational link with directions to sign up is provided below:

http://law.capital.edu/News_and_Events/News/Capital_University_Law_School_to_host_foreclosure_symposium_Oct__28.aspx

Friday, October 7, 2011

Derrick Bell - A Legal Giant Passes

For each contributor to this Corporate Justice Blog, a hero, mentor, friend and exemplar has passed away. Professor Derrick Bell, the originator and founder of Critical Race Theory, passed on October 5, 2011 in New York City. Professor Bell was 80 years old.

Known as a creative innovator and agitator, Professor Bell often sacrificed his career in the name of principles and objectives that have inspired a generation of scholars of color and progressive lawyers everywhere. Bell resigned a tenured position on the Harvard Law School faculty to protest Harvard's refusal to hire and tenure women of color onto its law school faculty. For the past twenty years, Professor Bell has taught at NYU Law School.

For my own part, Professor Bell's writings seized my imagination in law school and appeared to me as if "manna from heaven" as a second year law student. Bell's scholarship, including his widely influential books Faces at the Bottom of the Well: The Permanence of Racism and And We Are Not Saved: The Elusive Quest for Racial Justice resonated intellectually with me like nothing I had ever encountered before in my life. His desire to disaggregate legal scholarship from its traditional moorings and introduce legal storytelling, narrative, parables and fiction as a new and bold form of legal writing was groundbreaking and changed the legal academy dramatically.

My own tribute to Professor Bell appears in my recent Louisville Law Review article "A Furious Kinship: Critical Race Theory and the Hip Hop Nation." I believe that Bell's groundbreaking narrative style struck a cord with me because I had grown up in Southern California listening to the narrative storytelling of groundbreaking hip hop artists. In "A Furious Kinship" I endeavor to parallel the influence of Professor Bell as the patriarch of Critical Race Theory with the influence of Chuck D and Public Enemy, one of the most important socially conscious hip hop artists and groups to ever emerge. In true Professor Bell fashion, when I had occasion to tell him in person of my vision of this influential parallel of powerful voices, Bell as founder of CRT and Chuck D as originator of socially conscious hip hop, he seemed genuinely delighted by this narrative connection, encouraging me to continue the exploration.

From the Louisville Law Review article, I wrote the following: "Critical Race Theory patriarch Derrick Bell and socially conscious rap pioneer Chuck D both delivered their messages with an intent to educate, inspire, and motivate change. Their stance was often professorial, deeply motivated by a desire to teach and inform. Chuck D famously called hip hop the “Black CNN,” as Public Enemy was intent on informing, exposing, and educating. Chuck D seized the opportunity to transform the hip-hop message, ultimately ushering in a generational revolution simply by seizing a microphone and delivering powerful, intellectual messages of defiance and purpose. Similarly, Derrick Bell famously critiqued a stalled Civil Rights Movement, exposing the weaknesses in that which had been hailed as thoroughly triumphant. Intent on motivating, inspiring, and exposing through protest, resignation, explosive writing, and inspired mentoring, Professor Bell seized the opportunity to change the law and the system of legal education. The parallel critiques of American mores and traditions, by both Professor Bell and Public Enemy, were stark, bold, and biting. These critiques powerfully influenced a generation."

Professor Bell will be deeply missed, though his influence will live on for generations.

Professor Charles Ogletree has crafted a touching tribute to Professor Bell at The Root.

Thursday, October 6, 2011

Sixteenth Annual LatCrit Conference

The Annual Meeting of Latina and Latino Critical Legal Theory is taking place in San Diego, California on October 6-9, 2011 at the Hilton Harbor Island Hotel. The theme of LatCrit XVI is "Global Justice: Theories, Histories, Futures." According to the conference organizers, the theme of LatCrit XVI is described below:

"The global financial meltdown, the lingering Great Recession, the nuclear reactor meltdown in Japan, and popular uprisings in the Arab World underscore the reality that the fate of societies and communities across the globe are unavoidably interlinked. Systems of inequality and struggles for justice increasingly have a global dimension. The Sixteenth Annual LatCrit Conference aims to interrogate the global links between operations of power and strategies of resistance. In particular, we will examine questions of race, class, gender, sexuality, migration, violence, economy, education, and imperialism from a global justice perspective. Thanks to an overwhelming response to our Call for Papers/Panels, LatCrit XVI promises to be a dynamic and engaging conference. Joining illustrious plenary speakers and honorees will be an extensive and diverse roster of notable speakers on panels, roundtables and in work-­‐in-­‐progress colloquia."

The conference promises to be a progressive, exciting and inspiring event.

LatCrit as a movement is described as: "Emerging from the legal academy of the United States following a 1995 colloquium in Puerto Rico on Latina/o Communities and Critical Race Theory, "LatCrit theory" is a relatively recent genre of critical "outsider jurisprudence" - a category of contemporary scholarship including critical legal studies, feminist legal theory, critical race theory, critical race feminism, Asian American legal scholarship and queer theory. That cumulative record has served as LatCrits" point of departure, and our basic twin goals since 1995 have been: (1) to develop a critical, activist and inter-disciplinary discourse on law and policy towards Latinas/os, and (2) to foster both the development of coalitional theory and practice as well as the accessibility of this knowledge to agents of social and legal transformation. LatCrit theorists aim to center Latinas/os" multiple internal diversities and to situate Latinas/os in larger inter-group frameworks, both domestically and globally, to promote social justice awareness and activism."

"Occupy Wall Street" Gains Momentum

The loosely defined "Occupy Wall Street" movement is gaining momentum. Led largely by disaffected twenty-somethings, protestors are intent on shining a national spotlight on corporate greed and excess, government bailouts of Wall Street rather than Main Street, and a host of other issues centering around economic inequality. As protestor Emily Graham articulated: "I'm basically sick of corporate greed . . . . I'm frustrated that companies can pollute on a catastrophic level. They get all the tax breaks."

A fascinating question is whether Occupy Wall Street will resonate across the United States. Protests have broken out in other major cities across the country, as the Wall Street protests have drawn thousands and thousands of disenchanted. This blog has often contemplated why the public outcry has been missing in connection with the financial market crisis. Perhaps the public has had enough of Wall Street economic hijinks.