Posts Tagged ‘bush administration’

“They Have Become Literal Sociopaths” –William Black On Bank CEOs

William Black,  author of “The Best Way To Rob a Bank Is To Own One” was interviewed by Bill Moyers on April 23 regarding the massive fraud that exists in our financial system and the role it played in the current financial crisis.  Read the transcript here or watch the video here.

Mr Black said that two things created the environment in which the financial crisis occurred:

1: No regulation

According to Mr. Black, this wasn’t a case so much of there being no regulatory authority to deal with the banks, although indeed, more regulations are needed, it was a case of the government being unwilling to act using existing laws, even after it was made aware of the impending crisis in subprime mortgages and the housing bubble.

He mentions former Fed Chairman Alan Greenspan’s refusal to use a 1994 law granting the Fed the ability to regulate all mortgage lenders after being advised that a housing bubble was developing and there was a major problem with sub-prime loans.

2: Compensation

Mr Black on CEOS:

We now have the entitlement generation as CEOs. They just plain feel entitled to being wealthy as Croesus with no responsibility, no accountability. They have become literal sociopaths

Further than that,  Mr. Black said that there are incentives at every level to cheat, to make deals regardless of the ramifications to others and to the economy as a whole.

So, with all of this fraud being uncovered, why aren’t people going to jail, or at the very least, why haven’t there been any criminal indictments handed down? Mr. Black also explained why:

There’s a huge part that is economic ideology. And neoclassical economists don’t believe that fraud can exist. I mean, they just flat out — the leading textbook in corporate law from law and economics perspective by Easterbrook and Fischel, says — I’ll get pretty close to exact quotation. "A rule against fraud is neither necessary nor particularly important." Right?

Notice how extreme that statement is. We don’t need laws. We don’t need an FBI. We don’t need a justice department. We don’t even need rules like the SEC. The markets cleanse themselves automatically and prevent all frauds. This is a spectacularly naïve thing. There is enormous ideological content. And it fits with class. And it fits with political contributions.

Do you want to look at these seemingly respectable huge financial institutions, which are your leading political contributors as crooks?

Watch the video, but not on a full stomach. Again, the link to it is here.

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