I actually wrote a tribunal on the financial meltdown with some colleagues about the devastation of peoples lives including the deaths of thousands -- Financial Meltdown tribunal role play General indictment and definition of the crime- You are charged with causing a global financial meltdown, triggering massive loss of jobs, homes, savings, retirements, and lives. And the pain has only gotten worse with governments responding by cutting public spending on education, housing, environment, and health. You are the cause of poverty, homelessness, hunger, loss of health care, stress, insecurity, depression, and ultimately the deaths of millions of people through out the world. Groups prosecuted - 1) Consumers, 2) Mortgage industry, 3) Wall St. financial institutions, 4) Ratings agencies, 5) Govt. and the 6) System of capitalism. Some of the consequences of the financial meltdown The Pew Charitable Trusts has issued a new report tabulating the wealth that Americans lost as a result of the crash between 2008 and 2009 cbsnews/8301-505123_162-43545624/sticker-shock-what-the-financial-crisis-cost-in-lost-personal-wealth/?tag=bnetdomain ● $100,000: Cost to the typical American family in combined losses from declining stock and home prices ● $5,800: Average household income loss resulting from declining economic growth ● $14,200: Average household loss in wealth caused by plunging real estate prices ● $66,200: Average stock market losses for households from July 2008 to March 2009 ● $2,050: Average household cost to pay for TARP, the main government program to shore up the economy Real estate company Zillow Inc says more than one in four American homeowners were under water or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth. finance.yahoo/news/americans-brace-next-foreclosure-wave-210253522.html Increased racial inequality- The Great Recession produced the largest setback in racial wealth equality in the United States over the last quarter century. In 2009 the average white household’s wealth was twenty times that of the average black household, nearly double that in previous years, according to a 2011 report by the Pew Research Center. . . The typical black household in 2009 was left with less wealth than at any time since 1984, after correcting for inflation. . . The crisis in the housing market and the Great Recession made racial wealth inequality yet worse for two reasons. First, the wealth of blacks is more concentrated in their homes than the wealth of their white counterparts. Even though homes are typically the largest asset of most households, regardless of race, homes of black families make up 59% of their net worth compared to 44% among white families. White households typically hold more of other types of assets like stocks and IRA accounts. So when the housing crisis hit, driving down the value of homes and pushing up foreclosure rates, black households lost a far greater share of their wealth than did white households. . . Second, mortgage brokers and lenders marketed subprime mortgages specifically to black households. . . these high-cost loans were disproportionately peddled to black households, even to those that could qualify for conventional loans. dollarsandsense.org/archives/2012/0112wicks-lim.html In 2010 -- the first full year since the end of the Great Recession -- virtually all of the income growth in America took place among the countrys very wealthiest people, says an economist at the University of California, Berkeley. The top 1 percent of earners took in a full 93 percent of all the income gains that year, leaving the other 7 percent of gains to be sprinkled among the vast majority of society. huffingtonpost/2012/03/05/1-percent-income-inequality_n_1321008.html New Lows in U.S. Housing Prices Bode Ill for Economic Recovery- Not only have overall indicators dropped to their lowest levels since the housing crisis began in mid-2006, the figures were worse than predicted and cast a shadow over news that the economy is turning around. . . Looking at our home selling price interactive, you can see that an American home sold in December 2011 went for, on average, a level last seen in March 2003. pbs.org/newshour/businessdesk/2012/02/new-lows-in-us-housing-prices.html Rationale- the financial meltdown was so complicated citizens and even politicians don’t analyze it and won’t fix the problems even on a superficial level. Matt Taibbi- “But what they’re doing now is they’re blaming the people who were collecting these pensions — they’re blaming the workers, they’re blaming the firemen, they’re blaming the policemen — whereas, in reality, they were actually the victims of this fraud scheme. And the only reason that people aren’t angrier about this, I think, is because they don’t really understand what happened. If these were car companies that had sold a trillion dollars’ worth of defective cars to the citizens of the United States, there would be riots right now. But these were mortgage-backed securities, it’s complicated, people don’t understand it, and they’re only now, I think, beginning to realize that they were defrauded.” democracynow.org/2011/2/22/matt_taibbi_why_isnt_wall_street Taibbi goes on to write, The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers. democracynow.org/2009/3/25/aig_and_the_big_takeover_matt Debriefing- discuss difference between immediate cause or trigger and deeper causes. Follow up activities can also address issues we don’t cover in tribunal: ● Globalization and global capitalist production, transnational capital auction ● Global and racial impacts ● Austerity- shock doctrine, more neoliberalism, privatizaton and deregulation ● Govt. response- nationalization vs. bailouts, decision not to break up big banks resulting in even bigger banks Main Questions addressed in tribunal How did the recent financial meltdown occur? How did it affect people? Who and what were ultimately and most responsible? How can this be avoided in the future and what must the parties that committed these crimes do to make things right? Notes about the Tribunal In this tribunal simulation both the procedure and the defendants are organized conceptually rather than realistically. Students are organized into small groups, and they must accumulate evidence and prosecute other groups in the defense of their own group. It is being assumed that multiple causal factors need to be understood in order to explain the phenomenon of the financial meltdown. Many groups and even an abstract socio-economic system serve as generic defendants (e.g. capitalism is a political-economic system that would probably not stand in a real trial). The point of the tribunal is to analyze and synthesize a complex causal explanation of historical phenomena, not to learn about the U.S. legal system as in a mock trial. The goal of the activity is not to place blame on a group. It is to understand how the devastating financial meltdown occurred in order to identify possible social and political remedies. The tribunal was written by Hyung Nam, Johanna Brenner, Marty Hart-Landsberg, and Bill Bigelow. This lesson and other lessons and resources is available here (or email hyung_n@yahoo for link): https://docs.google/document/d/1BQmoq_QgsOl3xH7SgFwEEVCkQIXNC7sq6vJxwK-Iapg/edit An introductory lesson- mingling (tea) party for the unit is available here: https://docs.google/document/d/1t3d8U7-CibGzlc91WwBHJgyzXkZIWgsribDpF27Fozc/edit
Posted on: Thu, 12 Jun 2014 15:38:00 +0000
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