Archive for April 24th, 2010
William Black was a guest on Bill Moyers Journal yesterday. The conversation was lively and informative, including detailed discussion regarding “liar’s loans” (In a liar’s loan, the mortgage company doesn’t require any verified information from the borrower about the borrower’s income, employment, job history or assets).
Black indicates that even after all that has come to light regarding the financial collapse, our politicians refuse to use the “F word,” fraud. Why? Because too many politicians (and businesses) simply don’t believe in fraud. That is the hallmark of free market fundamentalism. To make matters worse, Barack Obama refuses to utter the word “fraud” from his bully pulpit. Nor does Eric Holder or anyone from the Obama Administration:
WILLIAM K. BLACK They can’t even get themselves to use the word “fraud.”
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?
But can’t we insist that suspect businesses be audited to determining whether they are committing fraud? Not based on a long sordid track record regarding prestigious accounting firms:
BILL MOYERS: Isn’t the accounting firm supposed to report this, once they learn from somebody like him that there’s fraud going on?
WILLIAM K. BLACK Yes, they’re supposed to be the most important gatekeeper. They’re supposed to be independent. They’re supposed to be ultra-professional. But they have an enormous problem, and it’s compensation. And that is, the way you rise to power within one of these big four accounting firms is by being a rainmaker, bringing in the big clients.
And so, every single one of these major frauds we call control frauds in the financial sphere has been– their weapon of choice has been accounting. And every single one, for many years, was able to get what we call clean opinions from one of the most prestigious audit firms in the world, while they were massively fraudulent and deeply insolvent.
BILL MOYERS: I read an essay last night where you describe what you call a criminogenic environment. What is a criminogenic environment?
According to this BBC report, an endless supply of rubbish from the Pacific is filling up what should be a pristine Hawaiian beach. The Pacific Ocean is arguably the world’s biggest garbage dump.
I caught this video on the Daily Dish. It is a compilation of excerpts from numerous infomercials. This excellent editing of a string of disasters that suggests the need for one more infomercial offering this bit of free advice: Slow down; quit being such materialists; simplify your life and quit acting so recklessly. Excellent humor and anthropology, “kickintheheadcomic“!
I suspect we’ll soon be hearing a new soundtrack on this clever video, unless the creator has his use rights to the Beatle’s “Help” nailed down . . .
Are we wrecking our teenagers by over-protecting them? That is the conclusion of Dr. Joe Allen. Newsweek sums up his book as follows:
Allen has concluded that our urge to protect teenagers from real life – because we don’t think they’re ready yet – has tragically backfired. By insulating them from adult-like work, adult social relationships, and adult consequences, we have only delayed their development. We have made it harder for them to grow up. Maybe even made it impossible to grow up on time.
A new $20 million 15,000 square foot exhibit has been built around a central question: “What does it mean to be human?” says paleoanthropologist Rick Potts, director of the Smithsonian’s Human Origins Program and curator of the project. It all makes good sense, which means that it is about to be attacked by a huge numbers of people who dread the idea that they are human animals. If only these anti-science types would learn to take deep breaths to follow the evidence wherever it leads. They would find that we humans are part of an immense and intricate tree of life. what possible concocted story could be more amazing than that?