It's been a long time coming, but the backlash is here. Occupy Wall Street lit the fire with its "one demand" -- an end to the insanity and a realization that bankers and other oligarchs rule the economy like a medieval fiefdom. And now the demand for economic justice is reaching into state governments and the Department of Justice.
A loose coalition of groups is demanding that more Attorneys General prosecute of bank crimes aggressively, offering support for those who are already moving, and calling on the states to reject the cushy deal that the Federal government and some of the AGs are trying to cut with the banks.
Independent citizen groups and progressive organizations are forming alliances at the state level with unions like the AFL-CIO and SEIU, as well as groups such as Clergy and Laity for Economic Justice. Californians for a Fair Settlement, Pennsylvanians for a Fair Settlement, Nevadans for a Fair Settlement and other state teams have begun putting pressure on each state's Attorney General to reject the Administration-backed deal and immediately begin aggressive investigations and prosecutions.
Like David Dayen, I'm hesitant to embrace the "fair settlement" framing completely until some of those investigations are further along. Based on the overwhelming evidence we've seen so far, a truly fair resolution will probably involve handcuffs, orange jumpsuits, and perp walks along with a financial deal. Financial restitution will need to include, at a minimum:
- substantial principal reductions for underwater homeowners, along with lower interest rates;
- a breakup or restructuring of the "MERS" shell game so that it no longer enables deceit, tax evasion, and the conversion of home mortgages from a two-party contract to a commodity bankers can trade and sell without regard to property rights;
- the right to rent a home that has become distressed; and,
- a loan modification facility that is not administered by the banks themselves.
The president is enjoying the fruits of his rhetoric this week, and it's excellent rhetoric. But he'll need to match his words to his deeds if he wants the rewards to continue, and that means directing his Justice Department to drop the cushy bank agreement and start prosecuting Wall Street wrongdoers. And voters are likely to be unforgiving of state politicians who won the office of Attorney General by promising to uphold the law and then turn a blind eye to "wrong" acts by the "right" people.
It's bad enough to watch powerful people break the law with impunity, shatter the economy, get rescued with taxpayer dollars, and then get to scoff at the law as they walk away unpunished. Here's what's even worse: If they're not brought to justice, they'll do it again.