The message is enforcing the rule of law. Fraud on a massive scale was committed by Wall Street banks and no one has gone to jail. The Federal Reserve has broken the law in funneling taxpayer funds to these criminal banks. No one has gone to jail. Until criminals are treated like criminals, the population will get angrier and more resistant to the government.
Occupy Wall Street does have a clear message
Commentary: A call to recognize the crimes of High Finance
By David O. Friedrichs
SCRANTON, Pa. (MarketWatch) — The Occupy Wall Street protesters in New York City and now in countless other cities and on numerous campuses as well have it right: the current architecture of our political economy is not sustainable, going forward.
The vast economic inequities promoted by Wall Street and the corporate world are immensely harmful to countless millions of people, and to the well-being of our country itself. The financiers whose massively fraudulent activities played a key role in taking our economy over the side of a cliff have not been held accountable for their crimes.
David O. Friedrichs
What are the Occupy Wall Street protesters seeking? Critics of this endeavor claim that there is a lack of a clear focus, agenda and strong leadership. But the overall message of the protesters is crystal clear and hugely important: we all need to become broadly conscious of what is wrong with our present political economy, and we have to promote the political will needed to transform it in fundamental ways.
Will this call for fundamental transformation be successful? If not in the days immediately ahead, it will surely establish a foundation for the inevitable coming together of all the different elements necessary for a fundamental transformation to occur. History is full of surprises, but sooner or later unsustainable political economies collapse, and something new — and in the best case scenario something fairer and far more sustainable — emerges.
Do the activities of the financial sector epitomized by Wall Street have some productive effects? Certainly: They raise financing for corporations and businesses, employ people and pay taxes. But the fundamental problem — well-recognized by the Occupy Wall Street protesters — is that the first and foremost priority of Wall Street is to generate obscene levels of wealth and vastly disproportionate compensation packages for a relatively small cohort of people — the 1%.
As a long-standing student of white-collar crime, I am especially attuned to the dimensions of the Wall Street and the corporate world that operate as a form of organized crime. There are many “criminogenic conditions” on Wall Street, in the language of criminology. The compensation and bonus system that rewards upfront getting transactions and securitizations done, regardless of their long-term viability, promotes pervasive fraud and financial misrepresentation.
Although blame for the financial meltdown climaxing in the fall of 2008 can be cast upon many different parties, there can be no question that massive forms of fraudulent conduct and financial misrepresentations on Wall Street played a central role. We now have a whole shelf full of fine books that have documented this, including the way Wall Street investment bankers awarded themselves obscene compensation and bonuses with grotesquely risky and thoroughly toxic investment innovations.
When the investments inevitably collapsed, the American taxpayers were called upon to bail out the banks, to the tune of hundreds of billions of dollars. None of the key guilty parties have been sent to prison; rather, Wall Street almost immediately called for returning to “business as usual,” has aggressively contested relatively modest new regulatory initiatives, and has altogether done well for itself while much of the balance of the economy and the American people continue to suffer.
We need to recalibrate our criminal justice system to accord a much higher priority to addressing white-collar crime, while maintaining appropriate responses to conventional crime.
There is a vast amount of anger, frustration, and fear among ordinary people across the globe. Young people, including some of my bright, hard-working college students, are justifiably anxious about their ability to pay off their student loans, and about their job prospects and their future overall.
Desperation and a lack of viable alternatives in large part led to the uprisings across North Africa and the Middle East. Here at home, such uprisings have yet to materialize, and populist anger also targets illegal immigrants, unions, bankers and others.
Unless our political leadership recognizes and acts decisively on the compelling need to undertake a fundamental transformation of an unfair political economy into one that meets broad human needs in an equitable fashion, we face a difficult and chaotic future.
David O. Friedrichs is professor of sociology and criminal justice and at the University of Scranton. He is the author of “Trusted Criminals: White Collar Crime in Contemporary Society.”