imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Attac's Bank Tribunal: The Jury's Verdict

by Friedhelm Hengsbach Wednesday, Apr. 28, 2010 at 2:03 AM
mbatko@yahoo.com

This crisis did not break out over society like a force of nature. Financial managers spread the legend that financial crises belong to capitalism as water belongs to the ocean and that euphoric phases of bubble formation and the bursting of bubbles come and go like the seasons.

ATTAC’S BANK TRIBUNAL: THE JURY’S VERDICT

The Normative Foundations of the Attac Bank Tribunal Judgment April 2010

By Friedhelm Hengsbach

[The Bank Tribunal was held in Berlin from April 9-11, 2010. This 11-page judgment is translated abridged from the German on the Internet, http://linkeblogs.de/blog/tag/finanzmarktkrise/.]




The Bank Tribunal stands on the shoulders of great predecessors. The tribunals named after Bertrand Russell were social tribunals against the Vietnam War, against military dictatorships and economic exploitation in Latin America, against human rights violations in Germany, against the genocide of Native Americans and against human rights violations in psychiatry. Afterwards there were tribunals on human rights violations of peoples and minorities, on wars in violation of international law, on violence against women and on environmental destruction and water pollution.

Our bank tribunal is not a state trial, a criminal law process or a civil law process. Is there only law in the state context? Are social conditions, conflicts and arguments of society the roots of law? Isn’t the moral point of view the standpoint of impartiality and the general public the foundation of law? This tribunal is a civil society trial. Bills of indictment will be read aloud, arguments of the defense will be heard, experts and witnesses interrogated and a judgment pronounced. This judgment is a sign of civil society protest.

What will be judged? The current unparalleled financial and economic crisis will be judged that is comparable with the financial-and economic crisis 80 years ago, the dynamic of a capitalist economy that has proven destructive in three dimensions. The potential credit creation of the banking system has been torn out of its concrete economic anchoring. The free social prosperity has worn out the natural assets, the savings balance of the planet. Economic growth is distributed more and more unequally and has dissolved the social cohesion.

What will be judged? This crisis did not break out over society like a practice financial constraint, a force of nature or an historical necessity. Financial managers spread the legend that financial crises belong to capitalism as water belongs to the ocean or that expansive and contracting impulses on the stock market alternate as in blood circulation or that euphoric phases of bubble formation and the bursting of bubbles come and go like the seasons. No, the financial markets are not lifeless machines. They are the product of social decisions and what people make of them, whose interests they serve and whose advantages they multiply. The judgment will be pronounced over collective actors, state authorities and financial institutions.

What will this tribunal accomplish? Firstly, the disaster of the financial crisis that was surprising for most experts is a social and political scandal. The rage and indignation of vast groups of the population will be expressed. Secondly, a search for culprits is underway. How could this happen? Enlightenment is necessary against the main current of the market-radical interpretation model. Thirdly, a voice will be given to those who hardly contributed to the crisis, namely our lower population sectors and the mass of the world population who feel the consequences of the financial crisis most intensely.

What are the normative foundations of the court proceeding and the judgment? The judgment is oriented in the 1948 Universal Declaration of Human Rights – political rights of participation, economic, social and cultural rights and liberal rights of defense. First of all, the acknowledgment of the equal inviolable dignity and rights of all people should stand out. Every person has the right to work, to proper and satisfactory working conditions, to protection against unemployment, an equal wage for equal work and a wage ensuring dignified existence. Every person has the right to security in case of unemployment, sickness, old age and loss of his livelihood through no fault of his own.

The basic law declares the Federal Republic of Germany to be a democratic and social state in which property is obligated. The use of property should serve the well-being of the general public. The state is obliged to protect the natural foundations of life.

The basic law is indifferent toward the specific concrete economic system. Embedding the markets in social conditions is a cultural challenge, a vital component of a creative social will. Markets are subject to political and moral responsibility.

Democratic procedures and institutions are the counter-pole to the dynamic of capitalism. Markets only function when they are morally, legally and politically regulated. This is also true for competition; it does not control itself. This is true for the money system; it eludes purely private control. The task of the state is providing public goods, ensuring social balance and stabilizing the changing moods of private enterprise.

In a capitalist market economy, the means of production are owned by a minority of the population. The majority only have their labor power to secure their livelihood. The asymmetries of economic power that arise and intensify must be corrected democratically by civil society. Free collective bargaining, labor law, transfer-financed solidarity security systems and forms of operational and entrepreneurial co-determination must be established. But for decades they did not prevent the very unequal distribution of commonly gained wealth to public and private budgets, to men and women, and to economically developed and up-and-coming countries. Protection of the natural environment fell by the wayside.

THE VERDICT

The jury comes to the verdict that the financial crisis did not break out over the German economy li8ke a force of nature. There are clearly responsible agents, including politics with German chancellors Gerhard Schroeder and Angela Merkel. Through their labor market- and social- and financial policies, they contributed to separating the financial markets from the real economy and making possible high-risk speculations. They repeatedly handed over public interests to private actors. They undermined democracy. They were easy on the creditors who were not cited for the costs of the bank bailout. They burdened the public budgets with billions. They did not resolutely support the overdue regulation of the financial markets. They allowed billions of people to plunge even deeper in poverty.

The jury contradicts the banks, represented here by Deutsche Bank head Josef Ackermann, that they were only “gears driven by the markets.” Rather through their unscrupulous striving for gain, they grossly violated the principle that “property is obligated” and has to serve the well-be4ing of the general public.

1. ASSESSING THE EVIDENCE

In hearing the evidence, the jury was guided by three central questions: What role did distribution policy play in the genesis of financial bubbles? What breakdowns occurred in regulating the financial markets? On whom were the costs of the financial crisis shifted? The following assessment focuses on the chronology of events:

The Schroeder government is reproached for exacerbating the unequal distribution of property and assets. Working conditions were systematically deregulated – through the Jobs Promotion law, subcontracted work-, temporary work- laws and Hartz IV. The results are falling wages and a continuously growing risk of poverty. In addition, the social security systems were partially privatized and handed over to the interests of the world of finance. Top earners and owners of capital were greatly relieved of tax liability. The top German tax rate fell from 53 to 42 percent; the corporation tax was reduced from 40 to 25 percent.

The Schroeder government sought to upgrade Germany as a financial center. Capital partnership funds were opened up to broad sectors of the population and hedge funds were allowed in the form of shelter funds. Financial investors were declared property managers and treated in a privileged way as to taxes. Thus Red-Green continued a policy of liberalization that had begun in Chancellor Helmut Kohl’s term in office.

Furthermore the Schroder government unequivocally violated its monitoring duties… It was not the task of the German IKB bank to invest massively in real estate in the US and in foreign European countries. In the summer of 2007, the IKB fell into a whirlpool and since then had to be failed out with 10.7 billion euro.

The Great Coalition, represented here by German chancellor Angela Merkel and ex-finance minister Peter Steinbruck made serious mistakes in the bank bailout.

The court corroborates the presentation of the witness Harald Schumann that tax funds were wasted unnecessarily in bailing out Hypo Real Estate because the finance minister did not have any kind of emergency plan despite the well-known liquidity crisis. In an ad-hoc bailout action at night, HRE creditors were not properly included in the bailout costs.

This process points to two fundamental problems in the bank bailout:

1. The beneficiaries of state assistance did not properly share in the bailout actions. Up to now, the creditors of the banks did not have to make any contribution – and shareholders only contributed very restrictedly.

2. Who profits from state assistance is often not known. The creditors of the bankrupt institutions are kept secret. This is different in the US. Those who obtained the state bailout billions for the insurance giant AIG were made known under the pressure of Congress. German taxpayers have a right to know who receives their billions. The German government failed to create the necessary transparency.

The current German government represented by Chancellor Angela Merkel can be blamed for not regulating the financial markets. Instead speculations occur to a gigantic extent – with currencies, government bonds, derivatives, raw materials and shares. There is an immense danger that new bubbles will form on the financial markets. A second crash cannot be excluded…

The head of Deutsche Bank, Josef Ackermann, can be blamed for not fulfilling his aggregate economic responsibility and limiting himself to maximizing the profit possibilities of his bank…

The jury takes very seriously the statements of the witness Schumann that the mistakes in the HRE bailout could be repeated and that creditors did not share properly in the costs in an ad hoc bailout action. Therefore the jury recommends investigating the Greek case (and other candidates for a state bankruptcy) in a future tribunal.

2. STRUCTURAL MANFORMATIONS

2.1 ATTACKS ON THE DEMOCRACY- AND RULE OF LAW PRINCIPLES

“The financial markets as a quasi `fifth branch’ have an important watchman role alongside the media. If politics in the 21st century stands in the tow of the financial markets, that would not be so terrible.” – Rolf E. Breuer, former head of Deutsche Bank in: DIE ZEIT, 9/18/2000

Republic comes from res publica = public matter. Thus our form of state stands and falls with publicity and transparency. However shady activities occurred in the context of the bank crisis to an extraordinary extent. The strenuous attempts at secrecy are sure evidence for deliberate attacks on the democracy principle.

According to the jury’s firm belief, the democracy- and rule of law principles were and continue to be violated in a serious way. The question is not where expertise ends and corruption begins. External expertise is necessary on account of the complexity of legislation questions, the argument is made. But this argument only proves: when the expert officials do not understand their laws any more, they cannot be understood by either citizens or representatives. Then the “res publica” is over.

The lack of transparency about the bank bailout fund Soffin is against the basic law according to the jury. Representatives of a parliament have a comprehensive right of control or supervision as far as the parliamentary “king’s right” of budget sovereignty is involved. This includes their right to know who the creditors who profit from the bailout billions are. According to many decisions of the German Federal Constitutional Court, all withholding of essential information by the Bundestag is against the basic law. What bank reasons for secrecy are so important that they supersede the “king’s right” of the parliament? As a rule, the significance of the parliament’s right of control for parliamentary democracy and for the esteem of the state does not allow any abridgment…

Starting from these documented facts, withholding crucial information from the parliament and the constitutional conformity of the legislation are open to suspicion. If the legislation was consciously manipulated through inadequate or false information, then the legitimating basis was lacking for actions of the executive. Government authorities cannot appeal to the overwhelming majorities in passing laws about the Soffin bailout fund.

The jury urges the members and parliamentary groups of the German Bundestag to oppose these limitations of their constitutional rights with all constitutional means

With astonishment the jury notes that no parliamentary group brought a suit against the self-annulment of the parliament or demanded its elementary rights in the German Federal Constitutional Court. Soffin has a financial volume of 480 billion euro, nearly twice the “normal” Federal German budget from pre-crisis times.

The asymmetries in party contributions by parts of the financial industry lead the jury to demand that the Bundestag completely reform its law on political parties.

That some financial actors are regarded as “too big to fail” by the government side seems entirely incompatible with democratic principles to the jury. If this is true, an intolerable condition of state powerlessness is confirmed that is inconsistent with the democracy principle. The compelling evidence for the necessary shattering of such institutions follows from that.

Finally, the jury is convinced that EU law with its well-known democracy deficits needs extensive revision for the financial markets.

2.1 POLARIZATION BETWEEN POOR AND RICH



The gap between poor and rich becomes ever wider. This process can be seen both within German society and worldwide as one of the essential causes of the financial crisis.



The jury focuses here on the international polarization since this is usually cut short in the German debates.



The financial- and economic crisis has already intensified extreme dangers in the global South. As with the climate crisis, the food crisis and the energy crisis, billions of people will be plunged in existential distress who are not responsible for that. The external financial streams and money transfers of migrants collapsed; raw material prices fell more than 20 percent and trade shriveled dramatically (in Africa, for example, around 17 percent). More than 100 million people were plunged into extreme poverty. The number of starving persons exceeded the billion mark. 400,000 children die annually an avoidable death owing to the financial crisis, according to data of the World Bank.



The international crisis management that the German government helped organize has reacted completely inappropriately. Of the worldwide bailout packages, only 5 percent are earmarked for mastering the crisis of the global South. The expansion of the credit lines of the IMF does not change anything in this unheard-of dislocation and hides the danger of a new indebtedness spiral.



That the German government according to its own statements cannot fulfill its international obligation to contribute 0.51 percent of its gross domestic product for financing 2010 public development is serious.



The policy of the German government has contributed to raising the crisis susceptibility of countries of the South. It pursued a liberalization and deregulation of the economic- and financial systems toward economically disadvantaged countries and omitted effective measures against tax havens and shadow offshore finance centers. It promoted capital flight and tax evasion in the global South whose magnitude exceeds public development assistance in these lands ten fold.

The German government has not prevented speculation with agricultural raw materials on the exchanges through effective regulation.

Together with other industrial states, Germany hinders the countries of the South from being properly represented in global economic- and financial institutions. In December 2008, the German chancellor admitted establishing a world economic council under the shelter of the United Nations was necessary “just as we have the United Nations and a UN Security Council for questions of security and human rights.” But no deeds followed that confession.



3. CONCLUSIONS AND DEMANDS

3.1 REGULATION AND FINANCIAL ARCHITECTURE

Money is a public good and money creation is a public function. As far as private banks assume this function, they act in public responsibility. There can be no economic freedom without responsibility. The following conclusions result for the regulation of the financial markets:

1. Financial management has to serve the real economy. Therefore all financial products should be prohibited that have no compelling use for the credit provision of businesses and private persons. This is true for uncovered short-selling (forward sales) or complex credit guarantees.

2. No financial enterprise, financial business or financial center may remain outside public monitoring and control. This also means prohibition of conduits.



3. Financial management is grotesquely over-sized. Many banks have no recognizable business goal (e.g. IKB, regional banks) or flee into speculation and inner-company business when profits can hardly be made with classical banking transactions. The financial sector must be shriveled and inner-company trade prohibited. Ultimately this means that private banks develop a profile as saving deposits have already done. They serve the real economy.



4. No “system-relevant” banks may exist any more that must be bailed out in a downturn with tax funds to prevent a “core meltdown” of the financial system. Thus the size of banks should be reduced (through shattering if necessary). This also means no mergers of banks should be allowed in the future.

5. Deposited capital resources should be increased. Capital holding requirements should rise with the size of the bank to punish dangerous concentration processes.



6. Rating agencies cannot be paid by their clients. The proposal of the witness Sven Giegold should be followed here that the investors must pay for the ratings.

3.2 COSTS OF THE FINANCIAL CRISIS

Up to now the creditors of the banks did not share in the bailout costs although they were the beneficiaries of the packages of billions. This must be corrected through a targeted fiscal policy. Assets in Germany are distributed very unequally. The richest 1% of the population already possesses 23 percent of the people’s assets. The richest tenth have 61 percent. Conversely the bottom 70 percent only have 9 percent of the total assets. Thus the richest 30% of German citizens have profited from the bank bailout packages.

3.3 DEMOCRACY DEFICITS

1. The creditors of the banks must be disclosed in the bailout measures. There must also be a duty to report to the parliament.

2. A public lobby register that lists the number of co-workers and the financial power of lobby organizations must be introduced as in the US.



3. NGOs and unions should participate much more strongly in the advisory bodies for the government.



4. To balance the structural asymmetry between the financial power of the banks and the NGOs, civil society organizations have to be subsidized by the government so they can pursue their lobbying.

3.4 SOCIO-POLITICAL DIVISIONS



As the indictment convincingly showed with the help of witness Lucas Zeise, the unjust distribution of assets and income promoted the financial crisis because the high incomes and assets of the wealthy sought investment possibilities on the world financial markets. Therefore we need a universal citizen security in social policy that includes all inhabitants and incomes according to output. A just tax policy and a minimum wage should be encouraged.



In addition, the worldwide trend is to rely more strongly on capital-covered pensions. This measure inflates the financial markets. Therefore we should return to transfer-financed pensions.



3.5 INTERNATIONAL DEMANDS

1. The German government must fulfill its obligation to increase development assistance (to 0.7 percent of the GDP in 2015).

2. No futures trading for agricultural raw materials.



3. Tax shelters and shadow finance centers must be closed.



4. The global financial- and economic policy may no longer be negotiated in the exclusive cartel of the G8 or the G20. A representative forum under the shelter of the United Nations is vital.

5. The financial actors must be cited for the debts in the global South. A financial transactions tax of 0.5 percent is necessary.



5. Waiting periods must be observed in the change from state positions to the free enterprise economy – and vice versa.



More information and documents from Attac’s Bank Tribunal are available at www.attac.de.

Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Xyloglossie attitudinale A23 8:07AM

Shadowgun Legends Hack and Cheats A23 7:24AM

What does the Quran Say About Islamic Dress?? A21 4:15PM

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy