Matt Taibbi's suggested Occupy Wall Street demands

Matt Taibbi, the Rolling Stone columnist who has produced better coverage of Wall Street corruption and government collusion than just about anyone, has a list of suggested demands for the Occupy Wall Street movement; as you'd expect from Taibbi, they're informed, uncompromising, and bang on target:

1. Break up the monopolies. The so-called "Too Big to Fail" financial companies – now sometimes called by the more accurate term "Systemically Dangerous Institutions" – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.

2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about. It would also deter the endless chase for instant profits through computerized insider-trading schemes like High Frequency Trading, and force Wall Street to go back to the job it's supposed to be doing, i.e., making sober investments in job-creating businesses and watching them grow.

3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer's own money to lobby against him. You can either suck on the public teat or influence the next presidential race, but you can't do both. Butt out for once and let the people choose the next president and Congress.

(via Waxy)

(Image: Day 8 Occupy Wall Street September 24 2011 Shankbone, a Creative Commons Attribution (2.0) image from shankbone's photostream)


  1. People tend to stop taking you seriously when you use hyperbole like, “a thousand mafias combined.”

    Even if you believe it, it does you no good to say it. 

    1. Hyberbole has the benefit of at least being heard. One of the downsides of the OccupyWallStreet movement is that they’re allowed as long as they don’t get in the way of normal operations, i.e. easily ignored. If the protesters aren’t feeling like they’re being heard by their government, violence is more likely, as seen in the England riots earlier this year.

      1. You’re right, if you scream at someone they will hear you.  They’ll just hear you as someone who is screaming at them.

    2. People tend to stop taking you seriously when you use hyperbole like, “a thousand mafias combined.”

      You don’t think that all the police in the US and all their firepower is equal to a thousand mafias?  Because they’re the enforcers who are going to evict you when your house is foreclosed.

  2. “I defy any politician to stand up and defend that loophole during an election year.”

    I dunno. The same shameless spin doctors who came up with the “Death Tax” and “Death Panels” will start calling the hedge fund loophole something like “The Entrepreneur’s Freedom Allowance” and insist on protecting it with a constitutional amendment (which would also outlaw Class Warfare, repeal child labor laws, and revamp the Food Pyramid to include the Hot Pocket, American Process Cheese Food and Bacon groups).

  3. #3.  How about just outright banning/outlawing lobbying.  Its a dirty game and wrong on so many levels.  It rarely has the interests of people at heart.

    1. Because lobbying encapsulates a lot of activity. In essence, any time any organization goes to a member of congress to convince them of something that is lobbying. It is not just a big business thing. 
      Besides, i suspect you would run up against constitutional protections on speech pretty quickly, not to mention making it rather difficult for congresspeople to deal with their districts.Not that getting moneyed influences out of politics is not a good idea, banning lobbying in general is just a bad idea. Public financing for campaigns would be better, and preventing corporations from donating would be even better.

      1. One of my suggestions would be to remove corporate personhood.  I honestly don’t know what purpose it serves and how it fits into the constitution.

        1. Corporate personhood is what let’s you sue a corporation like the way you sue a person and what lets some constitutional protections extent to them.  It isn’t that the law actually consider a corporation to be a living and breathing person with all the same rights as any other person.  It is just a legal fiction that is applied in some cases.

          It is both good and bad.  Corporations get due process under the 14th amendment.  A town government can’t just arbitrarily point their finger at a business and make it drop dead or confiscate all of its assets. If they want to do that, they have to follow “due process” (i.e., use the courts) as proscribed by the constitution.  Police can’t raid a corporation without a warrant due to 5th amendment protection.  Stuff like this is without any doubt a good thing.  It would be very bad if the police could bust in on any business they feel like and ransack the place.

          Where it gets hairy is when you extend 1st amendment protection to a corporation.  So, you could also say that corporations are entitled to have contact with politicians and launch political ads due to 1st amendment protections.  You might not want this.

          Personally, I wouldn’t want to completely remove corporate personhood.  I like companies having due process, protection from warrantless search and seizure, and things like that.  

          I would be more inclined to write a law altering corporate personhood such that the default is that corporations get all of the protections of the constitution unless specifically prohibited by law, and perhaps set a slightly higher bar for such laws to pass.  So, unless  you make it specifically legal for police to ransack a place of business, it is illegal.  Unless you make it specifically illegal for corporations to launch political campaign ads, it is legal.

          Of course, the downside is that once you open the door, you will never close it.  Currently, Google can contest having their records taken by the government without a warrant under the 5th and 14th amendments.  Under my proposed law, the government could make it legal to take the records without a warrant and Google would be out of luck in terms of legal recourse.

          I guess my point is that there is no easy answer and that it would be foolish to simply remove corporate personhood without rebuilding some of the completely valid and needed legal protection that provides.

          1. I would rather lose corporate personhood entirely than continue to apply the personal liberties of free speech to corporations. Due process is fine, but free speech never, ever needed to follow. Seems to me that since corporations are legal creations they can get due process by act of law, rather than the constitution.

            Just out of curiosity, does the rest of the G8, or G20 take the absurdity of corporate personhood as far as free speech? I am going to guess that they don’t. And yet, they have corporations . . . interesting.

    2. How about just outright banning/outlawing lobbying.

      Hell yeah! We should organize some kind of group to get that message to our legislators!

      Oh, shit.

    3. It’s a 1st Amendment right:  petition Congress for a redress of grievances.  It has the interests of the people lobbying for themselves or their organization, so I’m not sure which ‘people’ you’re referring to, since there are so many, with competing, often opposing interests.  As much as I hate lobbyists, and decry their corruptive influence on politics, they’ve never gone away, and never will, and ‘banning’ them, aside from inviting an immediate Supreme Court injunction, would be bad news for you, the average citizen, because chances are a lobbyist is trying to influence a politician on an issue you care deeply about, in your favor.  One also has t0 ask, how do you ban people from talking to each other?  

  4. Dear 1%,

    The people you are after are the people you depend on. 

    We cook your meals, we haul your trash, we connect your calls, we drive your ambulances. 

    We guard you while you sleep.

    1. Do no fuck with us.

      (although that should rather be “stop fucking with us”, I guess).

      Anyway, from my side of the pond, this OWS thing seems pretty cool. Wish I was in NY.

  5. “They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined.”  I find that metaphor apt and not hyperbolic and take it very seriously.  The mafia bought politicians and law enforcement on a local scale and these companies buy it on a national, and one could even argue, global scale.  They definitely had an impact on the global economy and could have caused a global economic meltdown if we hadn’t bailed them out.  Then they turn around and give out huge bonuses to their allegedly super talented employees, how is there any account in that?

    BB should have posted all 5 of Taibbi’s demands.  I love #4:

    4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break, which allows hedge-fund titans like Stevie Cohen and John Paulson to pay taxes of only 15 percent on their billions in gambling income, while ordinary Americans pay twice that for teaching kids and putting out fires. I defy any politician to stand up and defend that loophole during an election year.

  6. I don’t know what the cheap housing sign is referring to. Cheap housing isn’t a problem here in LA where I live. I took my nestegg and put a down payment on a 3 bedroom house. I bought it for 40% of the price it sold for five years ago, and the interest rate on the loan was rock bottom. I got a stimulus check to fix it up, and my mortgage payment is less than the rent I was paying on a tiny one bedroom apartment.

    I probably could have swung a loan for a house ten years ago, but I didn’t because I didn’t want to put myself in that much debt. Patience and planning paid off for me.

    1. Patience and planning paid off for me.

      So you patiently planned for a market crash, a housing crash and a federal stimulus project?

  7. Matt Taibbi has a good BS detector but little other sense in his head. His solution to a situation in which all the regulatory agencies have been captured and manipulated by the corporations they are supposed to regulate, is to give them more power and money? This is why libertarians laugh at you “progressives”. Laugh and sigh.

    1. Regulatory agencies are a part of government. Corporations have “captured” them because of corporate money’s influence over government. Remove the absurd fabrication of corporate personhood, and keep their lobbyists from exercising undue influence, and the regulators would once again be able to do their jobs. For the most part, a virtually unregulated free market is what has gotten us into this mess to begin with. That is why progressives laugh at you libertarians. Laugh and face-palm.

      1. “Remove the absurd fabrication of corporate personhood”

        Everything else flows from this. You can regulate their political speech if they are not people. Once you can regulate their political speech you can limit their donations etc. Once you can do that you can start to regulate them.

  8. I’m not sure why High Frequency Trading has any effect on the lives of anyone except maybe day traders. If anything, we should encourage more high frequency trading to make daytrading even more unprofitable than it already is.

    That said, I’m fully in support of breaking up any organization that is considered Too Big To Fail or at least, imposing extra requirements on them (say, a very large bond they must hold in order to continue doing business). This would at least allow large manufacturers that subcontract a lot (e.g. most of the auto industry) to continue to exist.

    1. High Frequency Trading is no magical money-tree for the big banks…the advantage is so minimal and volume required so high that it is hard to squeeze much of a profit out of it, although that profit is virtually, and unfairly, guaranteed. Goldman Sachs is going to post a loss this quarter, which is evidence that HFT is no bonanza.

  9. The easiest way to fight lobbying and other forms of influence buying is to vote out incumbants and those affiliated with a large political party.

  10. Or, you know, we could let these companies go under when they are bankrupt, so that these gamblers and crony capitalists lose everything.  Might be a bit cheaper than Taibbi’s plan, and a lot easier to implement. It’s not too late! :)

    1. Or, you know, we could let these companies go under when they are bankrupt, so that these gamblers and crony capitalists lose everything.

      I think that was implicit under “#1: Break up the monopolies.” Once companies are no longer “too big to fail” (without dragging down the whole financial system) then you can go ahead and let them.

  11. Three technical things I’d add:

    1)  Apply insurance reserve rules to derivatives.  Those were unregulated insurance bets, that AIG did not have the resources to pay.  Try that in Vegas.  Repealing Gramm would presumably have this effect, but put those under clear enforcement jurisdiction and apply adequate resources to monitoring.

    2)  Require full transparency and crowdsource bond rating.  The information asymmetry in the financial markets is what brought us to this crisis.  It is clear that rating agencies and accounting firms cannot be trusted to certify undisclosed material conditions, so without transparency, ratings are worthless.

    3) Tax all electronic stock transactions to choke out the flash trading. 

  12. It’s an interesting set of proposals, and it could do with some stronger discussion.  If this is going to go anywhere posts like this need to bloom into wider debate about how these things would work in practice. 

    A couple of points.  The paying back the bailouts tax:

    If I understand it right, the bailouts themselves where government purchases of shares and bonds.  In effect, loans to the Government.  I’m more familiar with the British bailouts, but as I understand it the US one is pretty similar.  These are projected to make a small profit, that’s certainly what has happened historically (Sweden in the 90s).  The deficit is caused by the economy (and thus tax base) shrinking while government liabilities such as unemployment payments increasing.  You could definitely argue the banks should pay for this too, but that’s different from saying they should pay for their own bailout.

    The tax itself, well it would need to be international for a start.  I’ve also not seen anything convincing on why it would be a good thing in itself.  There are lots of ways to increase taxes on banks with predictable outcome (taxing profits, bonuses, payroll etc.), why pick one with potentially huge unintended consequences?

    Breaking up big banks is another big area that needs talking about.  How are you going to fund it (or are you just going to seize them)?  Are smaller banks going to need governmental support, as they get in Germany?  What about big foreign banks, will, for example, HSBC be allowed to operate normally, or in a restricted capacity?  How will the affect consumer credit rates?

    Lobbying is the most tricky of all.  You run into minefields everywhere.  Is this a proposal that the banks can make no representations over legislation on their own business?  They have the most knowledge of the potential impact of the legislation.  They’re not the only voice you want to hear, but they are an important on. 

    1. They broke up AT&T in the 80’s. Why not the banks. 

      As far as the big banks – Canadian Prime minister Paul Martin, did not let the big banks merge, as well as reduced the deficit to zero – one of the reasons Canada was able to bear the downturn. Also in Canada savings and investment banking were kept separate, and mortgage requirements were more stringent – no such thing as nina loans.

      So much of the problem was foreseen and could have been caught by proper regulation.  Back in the 90s – Procter & Gamble sued Bankers Trust (one of the largest banks at the time) for ripping them off.  The court case exposed a lot of problems with derivatives. But Greenspan and Rubin didn’t want regulation for ‘regulations sake’.
      Even after Long Term Capital Management blew up – and almost caused systemic failure in 1998 they still didn’t want to regulate it.

      and prosecute the likes of Goldman Sachs for selling sub-prime mortgages to people that couldnt afford it – and then repacking and selling them and betting against them.

      ditto for the likes of Hank Paulsen who called for the first bailout as Treasury secretary, and only four years as head of Goldman Sachs earlier argued for increasing the debt to leverage ratio to 30-1.

    2. Breaking up big banks is another big area that needs talking about.  How are you going to fund it (or are you just going to seize them)?

      If they can merge then they can break up. Like others pointed out, they did it once with AT&T (and if you ask me it’s about time to take that company back to the chopping block too).

  13. At first I agreed with the idea of repealing GLB, but then I read the wiki article.  The defense for it sounds pretty reasonable:

    I’m all for restricting lobbying (and campaign donations) using public money.  
    Additionally– if organizations that got large government (over 10k?) contracts were not allowed to lobby or donate, unions would lose their influence too.

  14. A set of demands is a good idea, as long as it’s clear that those demands are, in fact, DEMANDS.

    With that being said, the time for pseudoscientific economic bantering is over.  It’s time to make demands, and if those demands aren’t meant, it’s time to start fucking shit up.

  15. Get rid of the Mortgage Electronic Registration Systems, Inc. (MERS) created by the real estate industry and banks to avoid recording fees and go back to recording property deeds at the county recorders office so we at least know who holds the deed to the property.

  16. Perhaps you might want to really think about the repeal of Graham Leach Bliley.  Allowing retail and investment banking under the same roof, along with insurance is one of the most idiotic things we’ve ever done.   I remember the original arguments were about allowing banks to compete better, by allowing them to offer investment products to retail investors.  

    Now you have a situation where all banks are basically in the proprietary trading business, and using your government insured deposits to provide an asset base for their leverage.   Why are the banks getting out of the loan business?  Because they can make better returns by and large robotrading, subsidized by the feds, and of course individual depositors.   Thats partly why the screaming about Basel III.  It raises the cost of investment capitol for large banks.

    hows that for using the system.

  17. Why allow any lobbying at all? And government really should be radically more transparent than it is today – servants should not be able to systematically hide their activities from the people who employ them.

    1. Why allow any lobbying at all?

      “Lobbying” is the act of attempting to influence decisions made by elected representatives and is a very important part of democracy. It can be as simple as a grassroots letter-writing campaign or a public protest like the one going on in Wall Street. The reason “lobby” has become a dirty word is that the system is so perverted by financial interests that Washington is currently run by professional lobbyists who have inside connections and answer to the highest bidder.

      The current system of lobbying needs major reform, but get rid of it entirely and you also lose major battles currently being fought by the Human Rights Campaign, Amnesty International, Greenpeace, the Sierra Club, the ACLU and dozens of other causes you may or may not support.

      1. I understand that getting rid of lobbying will have ill effects, but the question remains whether the benefits of lobbying can be had without the (massive) attendant costs. The alternative system would simply have people voting out the representatives that they view as doing a poor job. Of course, that would require the representatives to be organised more along functional lines (economy, foreign affairs, social justice, etc.) than along geographical lines…

        The way I see it, there should be no method for influencing government affairs in which the richer and better organised can outperform any given citizen. While, for instance, I’m grateful for the work that HRC does, I am still not very comfortable that it is more effective at influencing the government than I, by myself, can ever hope to be.

        Political influence is a zero-sum game. The more influence organised parties have over politics, the less influence I have.

  18. If you’re going to make demands that appeal to the public for support I believe they should be more sweeping & deep digging enough to effect the change & gain the momentum enough to make them stick indefinitely. We must consider actual sustainability for future generation.  A fully green inflected infrastructure shift, completely dropping all uses of motor oil, like in synthesizing pharmaceuticals, ostensibly to heal us; in making chem fertilizers & non-biodegradeable plastics & exhaust particles that never break down either due to their mineral base. A complete change in legal model from retributive justice to restorative justice. Real educing education, rather than the prevailing inculcation (instilling info) which masquerades; actually universal universities, with syncretic (cross disciplinary) work that reaches the public ears. Taxing the rich to the hilt, forgiving debt and using the money for a superfund clean up & replacement, replanting, reseeding etc of the resources which are our economic base we currently undercut with scortched earth resource extraction practices. We let this happen, in part due to that we’re herded into cities, then appeased & kept in dark while multi-national corporations run roughshod over the hinterland, steal our heritage, while most our backs are turned & from right in front of the faces of the rest of us. Also taxing transnational capital flows (look up Tobin Tax & ATTAC of France) & freeing the media up, balancing it, etc. These are mere examples of what we all must weigh in & peace together.

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