photo/occupywallst.orgOn a Saturday morning almost 25 years ago, Henry B. González challenged me to name the largest transfer of wealth in the nation's history.

I suggested a couple of New Deal programs and moved on to the defense budget.

“Mortgage lending,” he said.

In 1988, a 30-year, fixed-rate mortgage required the average family to pay for its house at least twice — once in principal and once in interest. Mortgage lending was then, as it is today, a vast transfer of wealth from the working class to the stocks-and-bonds class.

González also suggested that mortgage interest rates higher than four percent were usurious. Two years later, he became chairman of the House Banking, Finance, and Urban Affairs Committee.

On a Saturday morning almost 25 years ago, Henry B. González challenged me to name the largest transfer of wealth in the nation's history.

I suggested a couple of New Deal programs and moved on to the defense budget.

“Mortgage lending,” he said.

In 1988, a 30-year, fixed-rate mortgage required the average family to pay for its house at least twice — once in principal and once in interest. Mortgage lending was then, as it is today, a vast transfer of wealth from the working class to the stocks-and-bonds class.

González also suggested that mortgage interest rates higher than four percent were usurious. Two years later, he became chairman of the House Banking, Finance, and Urban Affairs Committee.

I recalled what González told me when I spent two days with the Occupy Wall Street protestors in Zuccotti Park in Lower Manhattan last week.

Not only is there no one in a position of power in Congress who would make a similar statement today. Banks are no longer banks.

When Bill Clinton, his Treasury Secretary Robert Rubin, and two Republican committee chairs in Congress dismantled the Glass Steagall Act — which since 1933 had maintained a wall of separation between commercial banks and investment banks  — banking was transformed.

With Glass Steagall in place, banks held deposits and made loans — many of them highly profitable home mortgage loans.

By the time the economy collapsed in 2007, mortgage loans were loss-leaders for investment banks. The returns investment bankers realized through home mortgages was exponentially increased by slicing those loans up to sell as collateralized debt obligations, then insuring the derivative debt with credit default swaps.

The result?

Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, et al. generated huge profits for investors and paid huge salaries and bonuses to executives, while creating the financial crisis that plunged the world into recession and destroyed 20 percent of the wealth held by American families.

It’s these financial Leviathans, and a federal government that failed to regulate them, that the remarkable kids who have turned Zuccotti Park into a protest encampment on lower Broadway are confronting.

Republican response has been predictable.

"If you read the newspapers today, I for one am increasingly concerned about the growing mobs occupying Wall Street and the other cities across the country,” said House Minority Leader Eric Cantor.

“I think it’s dangerous, this class warfare,” said Mitt Romney

“Don’t blame Wall Street, don’t blame the big banks,” Republican presidential aspirant Herman Cain said. “If you don’t have a job and you are not rich, blame yourself!”

Literally class acts, with the exception of Ron Paul, who is cheering Wall Street protestors on.

Liberal Democrats in Congress have been full throated in their support of the Occupy Wall Street Movement. "All of us should join that movement," Congressional Black Caucus Chair Barbara Lee said last week.

The president's response was more nuanced.

“I think it expresses the frustrations that the American people feel,” Obama said at an October 7 press conference.

“We had the biggest financial crisis since the Great Depression — huge collateral damage throughout the country, all across Main Street… I think people are frustrated. And the protestors are giving voice to a more broad-based frustration about how our financial system works.”

Only commiseration; anything more would be hypocritical.

Until bankers’ money began to move toward the ascendant Republicans, Barack Obama was the candidate of Wall Street.

Since he ran for the U.S. Senate in 2004, Wall Street has floated his campaigns. In the 2008 presidential race, Obama received far more financial support from the financial sector than either John McCain or Hillary Clinton.

There was more than money. Remember? Former Clinton Treasury Secretary Rubin (turned Citigroup chairman) shaped the Obama campaign’s economic policy — until it became evident that Rubin was toxic and had to go.

Once in office, Obama turned  financial policy over to Lawrence Summers and Tim Geithner, ensuring there would be no big move to regulate Wall Street. Summers was a  Rubin protégé, Geithner president of the Federal Reserve Bank of New York.

No Jamie Galbraith, no Paul Krugman, no Joseph Stiglitz in the Obama White House. Progressive economic policy thinkers were passed over and shut out.

Shortly before dawn on May 9, 1970, with Washington besieged by anti-war protestors, Richard Nixon quietly left the White House for a trip to the Lincoln Memorial, to talk to protesters encamped there.

Nixon botched the opportunity when one of the protestors said he was from Syracuse, and Nixon started singing the praises of Syracuse Orangemen football. College football was not a topic of great interest to the anti-war activists occupying the National Mall. (The moment is wonderfully recreated by Anthony Hopkins in Oliver Stone’s “Nixon” — even if Stone's anti-war activists are unconvincing.)

How does President Obama get from the White House to Zuccotti Park?

With great caution.