Thank god for a voice of sanity coming from our financial sectors these days. William K. Black has a must read article Monday on Huffington Post concerning the meme that drives me completely insane:
That somehow Americans are supposed to believe (and be thankful) that Treasurer Timothy Geithner and Ben Bernanke of the FED saved our nation from a total financial meltdown.
That is without a doubt the biggest lie out there in Wall Street Bizarro World that there is. it is sort of like dressing the Foxes up in brand spanking New Big Red Roosters Jumpsuits hoping that no one will notice that their Fox tails are still hanging out of their Rooster Suitsit just dont cut it babe. The jig is up.
For those of you unfamiliar with William K. Black, here is a bit of background:
William K. Black is an American lawyer, academic, author, and a former bank regulator. Blacks expertise is in white-collar crime, public finance, regulation, and other topics in law and economics. He developed the concept of control fraud, in which a business or national executive uses the entity he or she controls as a weapon to commit fraud.
Black is the author of The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry, 2005, University of Texas Press, ISBN 0292721390, (link points to Amazon page to purchase book).
On April 3, 2009 Black appeared on Bill Moyers Journal on PBS and provided critical commentary on the U.S. banking crisis. In the interview with Bill Moyers, Black asserted that the banking crisis in the United States that started in late 2008 is essentially a big Ponzi scheme; that the liar loans and other financial tricks were essentially illegal frauds; and that the triple-A ratings given to these loans was part of a criminal cover-up. He said that the Prompt Corrective Action Law passed after the Savings and Loan crisis mandated that ailing banks should be put into receivership. Black also stated that trying to hide how bad the situation is will simply prolong the problem, as happened in Japans lost decade. Black stated that Timothy Geithner is engaged in a cover-up, and that the administration does not want people to understand what went wrong or how bad the banking situation is today.
Mr. Black talks about a new book by Tom Franks entitled: The Wrecking Crew which explains how the Bush administration destroyed our nation, our social fabric and our economy. The short sighted decision of the Obama administration to reward two of the worst leaders of Bushs crew Geithner and Bernanke with not just promotions but reappointments, instead of dealing with the cause of the financial meltdown by appointing sane economists, has in fact damaged the economy (how much worst could it get?) and has caused a huge backlash that is now coming from every sector (the left, the right, the middle) and is increasing political fallout that is unlikely to go away.
As Mr. Black states about last week:
Last week was a bad one for Geithner and Bernanke. Senator Dodd said that Bernankes confirmation was no longer a done deal. The House Financial Services Committee revolted against the administration, the Fed, and Chairman Barney Frank. It voted for a strong bill to audit the Fed. Senate Banking Chairman Schumer went to a conference at Columbia University where a generation of students salivated at the prospects of Wall Street wealth and was overwhelmed by an audience denouncing the continuing stranglehold of the finance industry over successive administrations and the Congress. Neither Barneys blarney nor Schumers schmooze was any avail before an outraged public.
The backlash is building, and President Obama would be well advised to face this head on, instead of continuing to ignore the growing outrage this is continuing to damage his own administration. The old school of Barney and Schumers schmooze is not pulling the wool over anyones eyes, and as one Kossack noted on a recent diary I did concerning what is going on by pretending that everything is just hunky dory out there by President Obama, the real bottom line is this:
We come clean, and it will hurt. We continue to try to hide the truth, and we will be destroyed.
by JesseCW on Fri Nov 20, 2009 at 07:52:58 AM PST
I could not agree with Jesse more, and that is what is really going on in our nation right now, and if anyone believes that the Obama Administration is just going to ride this one out and that it will all just blow over then they are running on delusional fuel.
Mr. Black goes on to dispel the meme that drives me insane, mainly that we should all be throwing a ticket tape parade for Geithner and Bernanke (aka, the Wrecking Crew) for saving the nation from disaster. Which is the biggest crock of sh** Ive ever heard in my life.
The Washington Post article then offers a metaphor that serves as an apology for the Bush Wrecking Crew. The metaphor is driving over a cliff: Secretary Geithner has helped steer the American economy back from the brink, and is now leading the effort on financial reform, White House spokeswoman Jen Psaki said. Geithner pushed back against Republicans who questioned his performance, telling them, you gave this president an economy falling off the cliff.
You? How about we? Bushs financial Wrecking Crew gave this president an economy falling off the cliff. Geithner was President of the Federal Reserve Bank of New York from October 23, 2003 until President Obama chose him as his Treasury Secretary. He was supposed to be the lead regulator of many of the largest bank holding companies. His failures as a regulator were a major cause of the economy falling off the cliff. Bernanke held prominent positions in the Bush administration from 2002 to the end of the administration and failed as a regulator an economist. Geithner and Bernanke failed to regulate even after the FBI publicly warned in September 2004 that (1) there was an epidemic of mortgage fraud and (2) it would lead to a financial crisis if it were not contained. Their refusal to take responsibility for the harm they inflicted on our nation as leaders of Bushs financial Wrecking Crew adds to their unsuitability. Rewarding their perennial failures with a promotion and reappointment represents a dereliction of duty by the Obama administration.
The administration apologists praise Geithner and Bernanke for steer[ing] the American economy back from the brink. Greenspan, Paulson, Bernanke, and Geithner were the leaders of Bushs financial Wrecking Crew. They were the guys blinded by their pro-Wall Street ideology that drove the car 120 mph down an icy mountain road and lost control of it. They took us to the brink of running off the cliff and creating the Second Great Depression. The bizarre claim is that we should praise them because they, and Wall Street, only wrecked the economy they havent (yet) utterly destroyed it. Under their metaphor, were supposed to cheer Geithner and Bernanke because once they finally figured out that they were careening toward the cliff, they decided to sideswipe a row of trees in order to avoid going over the edge. They wrecked the car but they walked away from the crash without a scratch. If your teenager gets drunk, speeds, crashes into a school bus (injuring dozens of kids), and flips the Ford Focus but walks away from the crash you dont praise him, give him the keys to the family minivan, and have him drive the soccer team to practices. You take all the keys away from him and ground him.
Yeah, Brownie youre doing a heck of a job..if that sounds familiar then so be it. Ignoring the growing outrage is going to swallow up any efforts that President Obama is trying to set forth to put our country back on a sane footing, and as noted in the recent letter from FireDogLake on the failed Watt Amendment to water down the transparency of the Audit The FED bill, President Obama would be well advised to understand that the backlash against his Wrecking Crew is growing everyday:
Firedoglake.com is the nation’s leading progressive blog, with over 2.4 million unique viewers a month.
Text of the letter:
November 18, 2009
House Financial Services Committee
2129 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Frank, Ranking Member Bachus, and Members of the Committee,
During the past two years, the Federal Reserve dramatically changed its operating procedures. Instead of simply setting interest rates to influence macroeconomic conditions, it rapidly acquired a wide variety of private assets and extended massive secret bailouts to major financial institutions.
There are still many questions about the Fed’s behavior in these new activities, including potential cronyism and favoritism in its distribution of many trillions of dollars. As the Special Inspector General for the Troubled Assets Relief Program recently wrote about their bailout of AIG, the Fed’s strategy to pursue concessions from counterparties offered little opportunity for success, even in light of the willingness of one counterparty to agree to concessions.
The Federal Reserve balance sheet expanded to more than $2 trillion, along with implied and explicit backstops to Wall Street firms that could cost even more. Who received the money? Against what collateral? On what terms and conditions? The only way to find out is through a complete audit of the Federal Reserve. That’s why we support the Paul-Grayson amendment requiring a complete audit.
The Watt amendment does not repeal the existing provisions that prohibit a GAO audit of the Federal Reserve. In fact, it adds entirely new additional categories of restrictions. Instead of opening up the Fed’s secretive activities to public inspection, the Watt amendment cloaks it in further secrecy.
A vote for the Watt amendment is a vote for more secret bailouts. We urge you to support Paul-Grayson instead.
Dean Baker, Economist, Center for Economic Policy Research
William Black, Professor of Economics and Law
Tyler Durden, Blogger, Zero Hedge
Thomas Ferguson, Professor of Political Science, University of Massachusetts, Boston
James K. Galbraith, Economist, University of Texas
Leo Gerard, President, United Steelworkers Union
Jane Hamsher, Blogger, Firedoglake.com
Rob Johnson, Economist
Naomi Klein, Author, No Logo and The Shock Doctrine
Yves Smith, Blogger, Naked Capitalism
Andrew Stern, President, SEIU
Richard Trumka, President, AFL-CIO
L. Randall Wray, Professor of Economics, Center for Full Employment and Price Stability
The idea that people who want to audit the FED are just a bunch of wing nut neo nazis tea baggers has completely lost its credibility. That is not what is going on now in our nation. If you take a look at the list of people above, what is really going on is that people nationwide are opening their eyes to the ugly truth of the Bush Wrecking Crews continued program of insane and corrupt fiscal policies that have literally destroyed our national fabric, inside and out.
Continue reading the article, here.
See Why Is Obama Championing Bushs Wrecking Crew?, The Huffington Post, November 23, 2009, by William K. Black.
COMMENTARY by Paul Evans: If this article or my statement “hits home” with you, be sure to share it with your contacts.
Read Audit the Federal Reserve: HR 1207 and S 604. This is on Ron Paul’s website…. Evans Politics certainly DOES support Dr. Paul’s views about the Federal Reserve. Think to yourself, “why is that?” This is not because there is any kind of political consensus as to monetary policy. No, it’s simply because the Fed, with it’s promoters Geithner et. al. in the White House, under Obama as under Bush, is acting as a rogue organisation. We’re simply saying, let’s audit the Fed and bring truth and accountability to the light of day. That’s something liberals, progressives, Indendents AND Republicans should agree on.
See the YouTube video on Alan Grayson speaking to Congress against the Watt Amendment, here.
President Obama, you made the wrong choice to line your Administration with these same failed economic theorists. Almost ANYone would have been better than Geithner, Bernanke and Summers, who are corrupt, who are bankrupting this nation and impoverishing it, and who MUST BE DISMISSED FROM YOUR ADMINISTRATION.. Americans are NOT fooled by these slick Wall Streeters, and if you DON’T purge them from your Administration and start over from square one on economic policy, the outrage and anger in America is going to sweep the Democrats from power in Congress in 2010 and YOU from office in 2112.
(The economic point man I trust to tell me the truth about what’s happening with our economy and on Wall Street is Bob Swern over at Daily Kos. If you really want to know, yourself, look at his blogroll there and find enlightenment. In particular, as a basic though somewhat dated document, read 10 Stunning New Truths On Wall St., Economy, Jobless from back on October 3rd, and the follow-up to this, “…Tuesday’s just as bad…”, Daily Kos, November 17, 2009. Dig through his whole blogroll to get at the full horror of it all.)
I supported Barack Obama almost from the beginning in his candidacy, canvassing for his support across northern rural Wayne County, Ohio, making phone calls, and doing data entry on the State of Ohio Democratic Party website. And I like the stimulus and am a loyal Democrat, but whats going on with the Fed, Wall Street and Obamas economic advisers smells to high heaven. I still support you, President Obama, but just barely, mainly because you are letting these Wall Street crooks bankrupt and impoverish the future of a country I love far beyond any party affiliation. Get these crooks, these slick Wall Streeters, OUT of your administration and replace them with honest men who will work for ALL Americans, not just the one percent of the rich who are far too much controlling your economic policy. Start by cleaning house and getting rid of Geithner, Bernanke and Summers. Then America will start to believe in you as they once did. As for me, I’m very, very disappointed, and I never understood why you brought these people into your administration, but, believing in you unswervingly as I did, took it that somehow you must be doing the right thing.
Now I feel certain, and increasingly America is certain, that these Wall Street insider economists are a big part of what is wrong with our economy. I notice a studied silence about the strong movement to audit the Federal Reserve. Why is that? You have to do the right thing for America. Bite the bullet, admit you were wrong, take your medicine, and make a clean start by totally revamping your economic team. I suggest that perhaps Robert Reich would be a good place to look for direction. And Krugman.
America asks no less from you than what you are capable of.