New Revelations About the Economic Crisis

For those who didn't see it, Bill Moyers Journal on PBS on Friday, April 3, 2009 contained an interview with Professor William Black of the University of Missouri-Kansas City that was jaw-dropping. In addition to seeing it on PBS.org, you can also find an article he has written on the Huntington Post of February 25, 2009 with a title like The Two Things Everyone Should Read About the Economic Crisis. Black was formerly a government regulator who investigated the Savings and Loan Scandal in the late 80's and wrote regulations to deal with it thereafter.

In short, Black said that the crisis is the result of massive, intentional fraud by a relatively small number of top financial executives. According to Black, the FBI warned back in September of 2004 that there was an epidemic of mortgage fraud. According to Black, had the Bush Administration taken action then the financial crisis could have been avoided. One problem was that the FBI had shifted 500 agents from white collar crime to terrorism and did not have enough resources to investigate when the problem became known. Black says that Geithner and Obama Administration officials are not taking the required steps because they are afraid that the banking system will collapse because most of the huge banks (Citigroup, Bank of America, etc.) are basically insolvent. In his Huffington Post article he states that 80% of the frauds were initiated by lenders. According to Black, when a person controls a business and uses it to perpetrate fraud, that is known as control fraud and he states that control frauds cause greater financial losses than all other property crimes combined. Finally, he implied that Geithner and other top officials are aware of these facts but choose not to remove the officials responsible or take other necessary corrective actions because of the previously stated fear and because they still believe in a deregulated free market.

These are just some of the high (or low) points. Implicit is that the Obama Administration is knowingly shielding criminals and past criminal activities.

As I have stated in previous posts on this blog, Obama seems unwilling to take the major reform that is required. Similarly, (see my Get Tough on Crime) Obama also wants to look the other way when it comes to war crimes and other crimes of the previous administration. It appears that his desire to bring the country together and to rise above partisanship has led to a continuation of the moral crisis that is just as serious for this country as any economic crisis. If people are not held accountable, then it will happen again and again. It is time we start speaking out and demanding full investigations and prosecutions.