Forum Post: Wall Street Debacle: Resignations and Prosecutions are in Order

Wall Street Debacle: Resignations and Prosecutions are in Order

By Gil Villagrán, MSW El Observador, San Jose, CA Feb. 2009 gvillagran@casa.sjsu.edu

As our nation slides further into bankruptcies of Wall Street, banks, retirement trusts, massive corporations, mom and pop storefronts on main street, workers are laid off, and families are evicted, it is high time to say:  BASTA!  ENOUGH!  But to whom can we shout our outrage? Wall Street?  CEOs in their mansions?  Corporate boards? Stockbrokers?  Federal bureaucrats? Congress?  The President?
There is much guilt to go around; but as a nation of laws, our economic debacle begins and ends on the steps of the Capitol and White House.  As Wall Street financial wizards created evermore complex “financial paper” (derivatives, credit default swaps, and other esoteric investment instruments) Treasury regulators had the responsibility to protect the public from fraud. Washington is where the debacle was born with the passage of laws to de-regulate the financial industry. Congress took campaign funds, junkets, and all manner of “legal bribes” from banking lobbyists to decrease or eliminate regulation as well as taxes on capital gains--investment profits that are untaxed or taxed at lower rates than actual work.  
An orgy of de-regulation took off in a serious manner as part of “the Reagan Revolution” to “get government off the back of America’s entrepreneurs,” perennially claimed as creators of wealth, dismissing the sweat of 200 million Americans in factories, farms, offices, hospitals and stores, who keep the nation running.  Republicans led the charge to eliminate constraints on financial transactions, and Democrats, not be left behind, joined in the hysterical call to “let free enterprise reign supreme” with Congressional majorities enchanted by the false god called “the market,” promising to make us all rich!”
But we did not all get rich, though many did, especially on Wall Street in New York and K Street in Washington (where lobbyists have their offices).  Some so rich with de-regulation that millionaires became billionaires, and more than a few Congressmen left office to lobby their cronies, becoming millionaires in the process.  Any elected official who is not super wealthy is considered super stupid by the ownership and ruling class.
Bush-the-First infamously ridiculed candidate Reagan’s trickle-down supply side scheme to lower taxes (on the rich) to increase federal revenue “voodoo economics.”   But he quickly drank the voodoo kool aide to become Reagan’s vice-president, next in line for the presidency.  Then came Clinton, speaking like a man of the people, while further eroding regulation as he accepted massive funds from lobbyists, even from foreign contributors to his presidential library.  Bush-the-Second (and hopefully the last!) totally beholden to the “Kenny boy” (ceo of Enron Ken Lay) class of ignoble scam artists, gave financial manipulators whatever de-regulation they wanted, joined by a chorus of pundits, financial advisors, and patrician Yale-Harvard MBAs foaming at the mouth for multi-millions in commissions, stock options and bonuses.  
Then, just as Bush-the-Second was making his get-away after eight years of acting like a president, but not quite surpassing his C- mediocrity, the Wall Street meltdown came tumbling down, ironically similar in a fiscal manner to the fall of the World Trade Center Towers:  they were there, then imploded.

And so Wall Street, just around the corner from the Twin Towers, with trillions in value, imploded, and all that wealth vanished! The Great Debacle of Wall Street and Washington, twin towers of power, in their greed, massively failed the nation. Is the debacle criminal fraud or criminal ignorance? Combined, fraud—cheating, and ignoring the obvious--that regulation is necessary to operate a national and global economy, are a toxic combination. Certainly resignations are in order for the ignorant Congressmen and women who passed de-regulation laws, and criminal prosecutions are mandated for those who took the legal and illegal bribes from lobbyists. We must cleanse our nation’s government and financial industry of toxic individuals who may yet destroy our national and global economy.