Thank god for a voice of sanity coming from our financial sectors these days. William K. Black has a must read article today on Huffington Post concerning the 'meme' that drives me completely insane:
That somehow Americans are suppose 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 Suits'...it just don't 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.[1] Black's 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.
On April 3, 2009 Black appeared on "Bill Moyers Journal" on PBS and provided critical commentary on the U.S. banking crisis.[3] In the interview with Bill Moyers,[4] 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 Japan's 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.
http://en.wikipedia.org/...
Mr. Black talks about a new book by Tom Frank's 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 Bush's 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 Bernanke's 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 Barney's blarney nor Schumer's 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 Schumer's schmooze is not pulling the wool over anyone's 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 'savings the nation' from disaster. Which is the biggest crock of shit I've 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? Bush's 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 Bush's 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 Bush's 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 haven't (yet) utterly destroyed it. Under their metaphor, we're 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 don't 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 you're 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.
Sincerely,
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
http://workinprogress.firedoglake.co...
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 Crew's' continued program of 'insane and corrupt' fiscal policies that have literally destroyed our national fabric, inside and out.
This is a time in our history like no other time. The gathering storm, is not a simple rain storm, it is not even a tropical depression, it is in fact a financial tsunami that will not be denied, and if President Obama believes he can ride this one out on his 'surfboard' then he is sorely mistaken.
Mr. Black goes on in his article with a 10 point action guide to leading our nation back to a 'sane and responsible' fiscal plan. I encourage you to read the article, but would like to point out a few of my favorites:
- Can the Wrecking Crew. Fire the senior leaders of Bush's and Clinton's financial Wrecking Crews and stopping treating them as financial experts. President Obama should not reappoint Bernanke as Fed Chairman. He should dismiss Geithner and Summers and cease to take any advise from Rubin. Replace them with the Reconstruction Crew -- people with a track record of getting things right and being effective economists, regulators, and prosecutors. Members of Bush's financial Wrecking Crew run far too many regulatory agencies, often as "Actings." They can, and should, be replaced promptly.
- Make the Federal Reserve System public. It is a largely private structure that creates intense conflicts of interest and ensures that it is controlled by the systemically dangerous institutions. We have already decided that such a structure is inherently improper. The Federal Home Loan Bank System was set up along the same institutional lines and suffered from the same conflicts of interest. Congress ordered an end to these conflicts in the 1989 FIRREA legislation. It should end private control of the Fed.
- Defeat any proposal to make the Fed the "Uberregulator." The Fed, for inherent institutional reasons, is unsuited to be the "systemic risk regulator." The Fed has never cared about regulation. The Fed cares about monetary policy and (theoclassical) economic theory and research. Regulation is, at best, a tertiary concern. Its economists wrote frequently about systemic risk -- but missed the obvious, massive systemic risk of the financial bubble and the epidemic of accounting control fraud. Its policies intensified rather than restricting systemic risk. Theoclassical economists have no effective theories (or policies) to deal with bubbles or epidemics of accounting control fraud. Greenspan, Bernanke, and Geithner epitomize the Fed's inability to recognize or reduce systemic risk. Their policies consistently increased systemic risk. Greenspan didn't believe that the Fed should act against fraud. Geithner testified before Congress that he had never been a regulator (a true statement - but one that should have gotten him fired rather than promoted). Bernanke praised the subprime loans that caused the crisis and were so often fraudulent.
http://www.huffingtonpost.com/...
On December 3, 2009 (mark your calendars) the 'shit is going to hit the fan'......
WASHINGTON (Reuters) - The Senate Banking Committee said on Friday it will hold a hearing on Federal Reserve Chairman Ben Bernanke's renomination to a second term on December 3, putting the central bank chief under scrutiny at a time when the Fed is facing intense criticism in Congress. The hearing promises to be lively. Lawmakers have accused the Fed of being asleep at the wheel as risky lending practices laid the groundwork for the financial bust, which in turn fed the most painful recession since the 1930s. They are also angered at the role the central bank has played in bailing out large financial institutions.
Public resentment against the Fed and the Treasury Department runs high as some banks that received taxpayer funds have returned to profitability even as many Americans still lose jobs and homes. Some lawmakers are pushing legislation to sharply rein in the Fed's powers and to subject it to a higher degree of congressional scrutiny.
Senior Senators of both political parties have faulted the Fed's actions leading up to and during the crisis. Banking Committee Chairman Christopher Dodd called the Fed's regulatory performance "an abysmal failure."
http://www.reuters.com/...
Time for President Obama to 'dump' The Wrecking Crew. Lipstick on a Pig, or dressing the Foxes up in 'Brand Spanking New Red Rooster Suits' is falling flat on its face in our nation, and it is time for some of that 'change' we all voted for to happen, before this financial tsunami swallows up a great and brilliant young President who I happen to still love and believe in.
Thanks for your interest as always.