Rakim Brooks

Consumers expressed outrage when Bank of America announced that it would begin charging $5 per month for debit card use. Good for them. Working families are strapped. Median incomes are declining, food prices are rising, and the labor market is stagnant. Five dollars per month means a lot to Americans these days, especially the 45 million Americans who now rely on food stamps to make ends meet. But I hope the outcry is even greater when the word spreads that the Consumer Financial Protection Bureau knew about BoA’s plans and did nothing to stop it.

According to recent reports, the BoA officials who met with the CFPB to discuss the plan brazenly admitted that this is the financial industry’s response to the Dodd Frank Act. BoA, which is the largest US financial institution, has publicly claimed to be under siege. Its credit rating has been cut, stock prices have suffered, and lawsuits are being filed against them at a dizzying pace. Add to that the Durbin Amendment of the Dodd Frank Act, which limited the amount banks could charge merchants, and BoA spokespersons claim they are like a turtle on its back: just looking for a hand up.

No wonder BoA has an image problem. This “embattled institution” participated directly in the mortgage crisis but still received $45 billion through TARP and, as of August 2011, has received another $500 million from Fannie Mae to offset the losses associated with their toxic mortgage portfolio. All the same, the fees keep coming. That is unless you have at least $20,000 banked, a small business, a BoA mortgage, or accounts linked to the Merrill Lynch brokerage. After all that America has done for this bank, BoA still doesn’t treat ordinary citizens as valued customers.

This is what class warfare really looks like, betrayals of public trust, accompanied by maddening distortions. This transaction fee is neither Senator Durbin’s fault, nor is it a legitimate response from the financial sector. The Durbin Amendment, contrary to industry and GOP commentary, was a wise piece of legislation. Prior to its enactment, merchants were charged roughly 400 percent the cost of processing a debit card transaction. That equaled, on average, 44 cents per transaction. Senator Durbin’s amendment capped those fees at 24 cents, a figure that was determined by the Federal Reserve. This move is expected to reduce bank profits by $6-10 billion, with BoA absorbing $2 billion of those losses. But note that banks are still able to charge merchants more than 215 percent of the transaction cost. While that rate is still exorbitant – more than most loan sharks charge – it’s at least fairer than it was previously.

There is also a good economic rationale for the Durbin Amendment. Cutting transaction fees, just like the payroll tax cuts favored by the GOP before Obama proposed them, will save businesses money and give them more capital to invest in hiring and growing. Additionally, lowering the average cost of transactions makes processing debit cards more attractive to other businesses that have not yet made the transition from cash only to plastic. Debit cards, like ATM machines, make transactions more efficient and thus improve the quality of businesses. All in all, the Durbin Amendment is not only a smart financial regulation but it actually should have promoted economic growth, even if it does hurt BoA’s profits.

Yet, BoA, and the other major banks – JP Morgan, Citibank, Wells Fargo & Co – that have or intend to experiment with debit card fees are too self-centered to recognize levelheaded reform. Prior to the recession, BoA boasted $21 billion in profits. Today, the financial giant is in a panic, having reported a $2 billion annual loss in 2010. Looking for some way to steady themselves quickly, BoA intends to fire 30,000 workers and raise more fees on consumers.

The message to America’s working families: We are going to gouge the little guy because Dodd Frank won’t let us gouge merchants anymore. That’s the way things work around here. You put even an inch between us and our profit and we’ll tighten the vice on working Americans.

Sadly, strategies like these work. Hours after announcing the debit card fee, BoA stock price rose 3 percent and somewhere the millionaires were heard saying “Amen.” This is exactly the kind of corporate greed that Occupy Wall Street has been trying to confront every day in Zuccotti Park. “Banks got bailed out, we got sold out.”

Many of us had hoped that the CFPB would be an ally in this fight and maybe they still can be. But their first shot went center right. They affirmed the bank’s entitlement to do anything that is not explicitly against the law rather than upholding standards that protect average Americans. Seven House Democrats are now demanding that the Justice Department investigate whether the big banks are effectively organizing to raise consumer fees in violation of anti-trust laws. Whatever comes of this demand, hopefully the CFPB will stand firm with the lawmakers in defense of the working class, many of whom are marching as we speak.

John Petro

I was among the thousands of people cramming into Foley Square Wednesday evening, observing those who had come down to show their support for the Occupy Wall Street movement. I arrived at 4:30, and for the next hour roamed around the park. It had the energy of a festival, a celebration. The air was permeated by the sound of drums. Placards waved about in the air, many of them hastily written with marker on brown corrugated cardboard. And though the rally was organized by labor unions, those with union t-shirts were vastly outnumbered by those with no obvious union affiliation.

I could find no central focal point. If amplified speeches were going on, I could not hear them. Nearer to the drummers people were dancing. Standing on top of the fountain, I found it impossible to get a true sense of the size of the crowd. It was difficult to get it all within view.

This was symbolic, perhaps. The most frequent criticism of the Occupy Wall Street movement is that there is no central organized message. However, looking out over the amorphous crowd that evening, it was very simple to identify what the movement was all about. That is, thousands were gathering here to speak out about economic injustice—injustices dealt to them, their families, and to the entire nation. There was a palpable sense that our democracy is in danger, that the voices of the many are being drowned out by the few: those with vast fortunes and a certain political agenda.

“We are the 99 percent,” the protesters chanted. In contrast, those that make the decisions that affect our lives are the other one percent. They’re the ones telling us that we’re better off if we allow corporations to pollute our air, to ship our jobs overseas, to cut corporate taxes and those on the wealthy. They tell us that we’re better off if we cut health benefits for workers, if we get rid of pensions, if we do away with the social safety net. We’re better off without high-speed rail or universal health care. These things are unattainable, we’re told, because government is out of money. If we raise taxes on the wealthiest to help pay for these things then the whole economy will fail, we’re told.

The crowd at Foley Square wasn’t falling for it.

Student loan debt was a common cause for many. After all, we were all told that we must go to college to get a good job. For some this is no problem; their parents can simply write a check. For others, loans are the only practical solution. Now many are out of college and are tens of thousands of dollars in debt. There are few jobs to be had and those who haven’t found one are wondering just how they’re supposed to pay all this debt off.

“The banks got bailed out, we got sold out,” the crowd chanted.

These are big, institutional problems that don’t lend themselves to easy answers. The seductive power of the Tea Party is that it offers simple, easy answers. Cut government and cut taxes. Get government out of your life and maybe someday you will be rich. The real answers aren’t going to be that easy.

Earlier that morning a Republican presidential candidate told the protesters that they ought not to blame Wall Street for the fact that they’re not rich. But no one at Foley Square said anything about wanting to become rich. For the former CEO of a fast-food pizza chain this may be a difficult idea to understand. It’s also difficult for New York City’s billionaire mayor to understand. He called the protesters “ridiculous.” This is the same mayor who expresses no concern over the growing gap between the rich and poor in his city.

The crowd at Foley Square wasn’t concerned about amassing riches. They wanted economic security and a say in their political process. They wanted to end the injustice that they see all about them, to eliminate want in the face of greed.

An hour later, looking south on Centre Street, the setting sun reflected off of the silver façade of a new luxury apartment building. A two-bedroom apartment in this building rents for $72,000 a year, a sum greater than many of the attendees’ salaries. And then the crowd began to move forward for the march down to Zuccotti Park. I walked with the chanting crowd in silence. When the march met with those encamped at Zuccotti Park there were cheers. There was dancing. Later a small group tried to storm some barricades. A white shirt officer swung his nightstick at the group. Thousands of cameras captured the moment.

John Petro

Earlier this week I attended a conference on mass transit and the creation of manufacturing jobs in New York State. This connection is often overlooked, especially by lawmakers and others in government who feel that any government spending is inherently wasteful. But the fact is that New York State’s investments in mass transit do create jobs all across the state—38,000 jobs by one estimate—and many of these jobs are in the shrinking manufacturing sector. 

For example, a representative from the company Alstom told the audience about how thousands of employees were at one point working in factories upstate to manufacture rail cars for the New York City subway. Now that the order for thousands of rail cars has been filled, however, the company now employs fewer than one hundred New Yorkers for rail car production. 

At the same time, the MTA is putting off the purchase of new rail cars and buses because of a multi-billion dollar gap in it’s five-year capital program. On the MTA’s “C” line 55-year-old rail cars will continue to clunk their way down the tracks because of a decision to put off the purchase of new cars. The MTA doesn’t have enough money to make the investments they need. The result is less reliable service and the loss of manufacturing jobs throughout the state.

Why doesn’t the MTA have enough money? While many politicians may make sport by slamming the MTA’s management and labor, the truth is the responsibility for funding the MTA rests with the legislature and governor. A lack of state money means that the MTA is unable to make the investments that not only improve New York’s transportation system, but create the type of well-paying jobs that New Yorkers so desperately need. 

The assumption is that the state is out of money and that the MTA, like the rest of us, will just have to do more with less. In this case, the MTA will probably just have to do less. That means fewer jobs. 

With all this in mind, I sat at the conference and listened to a panel discuss just how we can come up with the money for transit investments. New York City’s Deputy Mayor Robert Steel was on the panel. Steel is an ex-CEO of Wachovia bank (now part of Wells Fargo) and serves as the Deputy Mayor for Economic Development. 

When it came time for questions from the audience, I took the opportunity to ask Steel a question: given the vast potential for transit investments to create jobs and economic development, why are state leaders choosing to roll back taxes on New York’s wealthiest residents? This choice will deprive the state of $5 billion a year. I asked the Deputy Mayor if he could explain how the benefits of lowering taxes for millionaires outweigh the benefits of making investments in our transportation system.

As an example of the benefits of mass transit investments, I pointed to the city’s investment of $2 billion on the extension of the number 7 subway line. For $2 billion, an additional $15 billion in private investment is expected to take place along the extension. The fourth-largest business district in the country will rise adjacent to the new subway stop on the site called Hudson Yards. 

If $2 billion can do all that, how is it better for New York’s economy to lower taxes for the state’s wealthiest?

The Deputy Mayor did not have an answer for me.

The fact is, there is no good reason to make this choice when the state’s needs are so great. Not only do we need $9 billion for rail and bus investments over the next two years, but a similar amount is needed to fix the state’s roads and bridges. Depriving the state of $5 billion so that the state’s wealthiest residents can feel a little richer makes absolutely no economic sense.