by Junious Ricardo Stanton
“The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of ‘an epidemic of mortgage fraud.’ But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting .... This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.” James K. Galbraith
I have been saying for years that the current economic crisis was not a freak accident or the result of logarithmic miscalculations by the “smart boys” on Wall Street nor the schemes of a few bad apples in the financial industry. No, it’s the result of a systemic wholesale replay of the same criminality that has plagued this country for decades. I base my assertions on the hidden history of the financial and corporate blue bloods, their lackeys and hit men in the government, the media and educational institutions that perpetuate the lies and myths about how the US and global economy work. We have been duped by high school and college economics classes to believe that booms, recessions and depressions are the result of economic “cycles”. Not so. They are the result of decisions made at the highest economic levels by people who know exactly what they are doing even if they lack a full understanding of the consequences.
For example following the crash of 1929 when the new Roosevelt administration came in with a Democratic control of the Congress an investigation into the causes of the crash was initiated and headed by a no nonsense former US Attorney named Ferdinand Pecora. His committee had subpoena powers and he actually called the heads of the top investment houses and banks to testify. “In 1932 through 1934 the Senate Banking Committee, led by its Chief Counsel Ferdinand Pecora, ferreted out the deeper fraud and corruption that led to the Crash of 1929 and the Great Depression. The Pecora Committee's findings helped change the political mood, and laid the groundwork for the sweeping financial reforms of Roosevelt's New Deal. Roosevelt himself often conferred with Pecora, encouraged him, and depended on Pecora's work to build the public support for reform. He appointed Pecora to one of the newly created results of his handiwork, the Securities and Exchange Commission, though Pecora was disappointed not to be its chairman” A Real Pecora Commission, Robert Kutter http://www.huffingtonpost.com/news
By all accounts Ferdinand Pecora was relentless in his search for truth. Nevertheless despite Pecora’s thoroughness and diligence none of the Wall Street biggies were indicted, arrested or went to jail; a pattern that prevails in this country to this day. However the findings and recommendations of the Pecora Commission led to the formation of many “New Deal” policies and legislation to supposedly prevent such massive fraud and criminality from occurring again. Due to Pecora’s work the SEC was created, legislation like Glass-Steagall was passed and the power of Wall Street was put in check; at least for a time.
But vampires and Kleptocrats never sleep, they bided their time until they felt it was ripe to undue Roosevelt’s New Deal legacy. Under Bill Clinton the Glass-Steagall Act was repealed, proposed government regulation of derivatives was aggressively squashed and the banking system was deregulated, setting the stage for our current tsunami of fraud and criminality. Once this was done it was merely a matter of time before the con artists, shysters and money changers revised their Roaring ‘20's speculation/debt play book merging it with the Savings and Loan and Enron templates and the Technology pump and dump scams to create a global economic meltdown. This was done deliberately so they could steal our assets through rampant speculation , over leveraged casino capitalism, global Ponzi schemes, fraud, phony bookkeeping and accounting methods all countenanced by the very federal agencies whose job it is to monitor them and enforce the laws against this sort of thing.
Notice the corporate media didn’t play up the findings of the Financial Crisis Inquiry Commission’s recently completed investigation into the US financial implosion. It fact it barely made a ripple in the news cycle. Notice also there have been no indictments, arrests or convictions whatsoever !? This is consistent with prior white washes and investigation where the blue bloods of Wall Street got off Scott free. Crime does pay in this country if its considered white collar and the perps are rich and well connected?
“Shouldn’t someone go to jail? Determining criminal intent is always difficult. Corporate law is a thicket of exemptions and clever distinctions designed to shield the big boys at the top. If the feds got serious, they would apply the same techniques used against Mafia dons. First ‘squeeze’ lesser players down below—traders, salesmen, accountants—then ‘turn’ them into government witnesses. Build a chain of evidence against those who knew the score and gave the orders. What did the titans know and when did they know it? If President Obama wanted to address the random rage accumulating around the country, this could be his issue (Republicans are freaked out by any suggestion that capitalists did anything wrong). Instead of ignoring the FCIC report, the president should embrace its content and demand an aggressive follow-up by federal prosecutors and regulatory agencies.
The issue at stake here is far more threatening than smug elites seem to understand. Nothing erodes the authority and legitimacy of government more severely than a spreading awareness of unequal justice. The feds send hapless drug mules to prison for twenty years. For billion-dollar swindles, they won’t even call a grand jury. This corrosive contradiction can become a national disease. Americans are learning from these events—another investigation with shocking evidence, but not much happens afterward. This will sound farfetched, I know, but this is a road that leads eventually to Cairo.” FCIC Investigation Turns a Blind Eye To Wall Street Fraud by William Greider http://www.thenation.com/article/158274/fcic-report-turns-blind-eye-wall-street-fraud
So its business as usual on Wall Street and the District of Criminals. The beat goes on as the psychopathic oligopoly and their lackeys in Washington continue to: rob, steal, plunder and wage ever more wars against humanity seemingly with impunity. There is anger percolating throughout the world. We saw it in Europe, the “Middle East” and here in the US in Wisconsin and Ohio. It’s only a matter of time before more people wake up and demand the real criminals, terrorists and warmongers be held accountable before the bar of justice.