Santa Cruz County targets felonious Wall Street banks

Wall_Street_SignMillions of Americans — mostly but not entirely on the political left — remain furious that Wall Street giants were protected by the political class from catastrophe during the Great Recession even though their dangerous credit and lending practices were key factors in the economic downturn.

In June, in a move that rated only a brief in the local newspaper, one California county found a way to express this frustration:

At the urging of Supervisor Ryan Coonerty, the Santa Cruz County Board of Supervisors voted Tuesday not to invest for five years with the five banks that recently agreed to plead guilty to felony charges.

 

The Department of Justice announced in May that four major banks — Citigroup, JP Morgan Chase, Barclays and the Royal Bank of Scotland — have agreed to plead guilty to felony charges of conspiring to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange spot market. In addition, a fifth bank, UBS, has agreed to plead guilty to manipulating the London Interbank Offered Rate and other bench mark interest rates.

 

While the action of Santa Cruz County alone may not have a major impact on Wall Street, Coonerty will be contacting other local jurisdictions across the country to urge them to consider taking similar action in order to send a message to Wall Street.

That’s the entire item in the Santa Cruz Sentinel. Scroll down; it isn’t the lead item in that day’s news briefs.

Former secretary of labor offers praise

robert-reichBut if this gesture wasn’t seen as very important in Santa Cruz, former Clinton administration Labor Secretary Robert Reich, a UC Berkeley public policy professor, disagreed later in June on his personal blog. Here’s part of the lengthy post:

A strong case can be made that employers shouldn’t pay attention to criminal convictions of real people who need a fresh start, especially a job.

 

But giant banks that have committed felonies are something different. Why shouldn’t depositors and investors consider their past convictions?

 

Which brings us to Santa Cruz County.

 

The county’s board of supervisors just voted not to do business for five years with any of the five banks felons.

 

The county won’t use the banks’ investment services or buy their commercial paper, and will pull its money out of the banks to the extent it can.

 

“We have a sacred obligation to protect the public’s tax dollars and these banks can’t be trusted. Santa Cruz County should not be involved with those who rigged the world’s biggest financial markets,” says supervisor Ryan Coonerty.

 

The banks will hardly notice. Santa Cruz County’s portfolio is valued at about $650 million.

 

But what if every county, city, and state in America followed Santa Cruz County’s example, and held the big banks accountable for their felonies?

 

What if all of us taxpayers said, in effect, we’re not going to hire these convicted felons to handle our public finances? We don’t trust them.

 

That would hit these banks directly. They’d lose our business. Which might even cause them to clean up their acts.

Coonerty hopes that other government bodies follow suit. The reprinting of Reich’s commentary on some prominent left-wing sites gives him  hope. He’s also now getting more favorable coverage of his plan from his hometown paper.

Whether or not it becomes a national cause, in California, it could possibly become a ballot initiative to help get out the liberal vote in the 2016 election. As this Southern California Public Radio story notes, ballot measures on “hot-button” issues are just another tool in the voter-turnout playbook in the Golden State for liberals and conservatives alike.

10 comments

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  1. Skep41
    Skep41 9 August, 2015, 08:47

    Now all they have to do is boycott the Democratic Party which, in the name of ‘fairness to the poor’ passed the ‘Community Reinvestment Act’ which forced these villain banks (all of whose CEOs were huge donors to that party) to count welfare payments, disability and food stamps as income when qualifying for a mortgage. If you read ‘Reckless Endangerment’, a book written about the mortgage crash by the financial editor of the NYT you will see that the Democrat’s fingerprints are on every single aspect of the mortgage crash. Of course the cliché-addicted Progressive buffoons in the People’s Republic Of Santa Cruz are motivated by century-old cartoon images of Snidley Whiplash capitalists in top hats with waxed moustaches tying widows to railroad tracks and dont realize that they are attacking Hillary Clinton’s donor base by their ill-conceived actions.

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    • fletch92131
      fletch92131 10 August, 2015, 13:01

      Skep41 is so right; and now we have Dodd-Frank as there evidence of the how to make sure that no little guy gets burned, by making sure that no loans get written from Community Banks that haven’t failed yet.

      Reply this comment
  2. Dude
    Dude 9 August, 2015, 11:13

    Another left, socialist story that hides the truth of the housing bubble bust. The banks sought relief from the problem the government caused. Specifically the Frank & Dodd legislation. Frank – Dodd, forced banks to guarantee mortgage loans to those of low income. Initially the percentage of loans from Fannie Mae and Freddie Mac to low-income buyers was set to 30% of all loans. In 2008 that percentage was increased to 56%. The failure rate of these low income loans reached critical mass by 2007. A large percentage of these loans that the government forced banks to grant failed and therefore turned to bonds the they were a part of to go from AAA to a junk bond rating. The rest is history. By the way, senators Frank and Dodd are both Democrats.

    Reply this comment
    • Commentator
      Commentator 10 August, 2015, 14:21

      Nice try, but Dodd-Frank was passed in 2010 (after the financial implosion) and was fought by the banks. Nevertheless, they managed to soften the bill substantially as they (specifically Goldman-Sachs) were Obama’s single largest contributor in 2008. Additionally, you are wrong where you state that the banks were “forced” to approve loans to anyone. It was the banks (with Jerry Rubin guiding) who pushed legislation signed by Clinton into law in 1999 the Gramm-Leach-Bliley Act doing away with Glass-Steagall, loosening government lending standards, barring regulation of CDOs and derivatives, and leading to the economic collapse nine years later. You should do your research rather than just parroting soundbites you hear on corporate news. However, you are right when you call out dirty Democratic legislator hands. Both parties are bought and paid for by their corporate donors.

      Reply this comment
      • Dude
        Dude 10 August, 2015, 14:33

        You’re either a fool or just terribly ill advised. Apparently you are unaware that there was before and after crash legislation. I make my living in the financial management arena and had to deal with the consequences of pre and post Dodd-Frank. My advice to you is to do some research before you make yourself look like a fool again.

        Reply this comment
        • Commentator
          Commentator 10 August, 2015, 16:08

          You may work in financial management and that’s great for you. However, you referred to Dodd-Frank (it’s not called “Frank and Dodd”, by the way) as causing the “housing bubble burst” by “forc[ing] banks to guarantee mortgage loans to those of low income…these low income loans reached critical mass by 2007…” etc. However, the bubble burst in 2008, Dodd-Frank was not even proposed until June 2009, and signed into law in July 2010. Also, Dodd-Frank has absolutely nothing to do with guaranteeing mortgages to ANYONE (rich or poor), but rather with truth in lending, investor protection, transfer of power to comptrollers, et. al. What you seem to be referring to was, in large part, a result of Gramm-Leach-Bliley. So, if they now have the power to pass legislation to go back in time and effect the past, maybe they can pass a law to prevent Vietnam, Iraq, the Cold War, and the financial implosion of 2008. That would be neat!

          Reply this comment
  3. desmond
    desmond 9 August, 2015, 19:04

    In my parent’s neighborhood, there was a massive influx of new homeowner’s who had the same look of intelligence as cow’s bunghole. These morons would pull their new SuV’s out of their garages in their new homes, roll out the tv’s and drink beer on Sunday afternoons watching their favorite felons play ball. The fat wives would sit in the driveway drinking wine, dreaming of getting kabobed by the cornerback with the size 17 -feet. Sadly, they are all gone.

    Reply this comment
  4. desmond
    desmond 11 August, 2015, 19:23

    Nope, cheap Mexican beer, but the senoritas dreamy about the cornerback with the size 17 feet. Pedro don t look too good .

    Reply this comment

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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