William K. Black: It’s time for real economic reform

We are a nation in severe crisis. According to William K. Black, a white-collar criminologist, President Obama doesn't deserve any more of our patience:

The Obama administration promoted Bush's architects of the financial disaster and demands that we hail them as heroes. President Bush was ridiculed for saying: "Brownie, you're doing a heck of a job." FEMA administrator Michael Brown stood by while Hurricane Katrina reduced a single large city to ruin. Geithner and Bernanke stood by while scores of large cities were devastated.
Black offer much more than criticism. He offers ten opportunities for digging us out of this mess. It will be difficult to attain any of these while the banks own Congress, but we need to dig deeply an somehow find the political will. Here are two of Black's points that stand out to me:
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 . . . End "too big to fail." These banks are "systemically dangerous institutions" (SDIs). They should not be allowed to grow. They should be shrunk to the point that they no longer pose systemic risk, and they should be subject to vigorous regulation while shrinking. They are too big to manage and too big to regulate. They are ticking time bombs that will cause recurrent global crises as long as they are SDIs.
Here are some of Black's other suggestions. I agree with all of them whole-heartedly: - We need to provide the FBI with 1,000 more specialized white-collar crime investigators. - No more executive compensation looting. - Kill TARP and PPIP. ("Use the funds to help honest homeowners that would otherwise lose their homes because of predatory loan terms.") - Make the Federal Reserve System public. - Defeat any proposal to make the Fed the "Uberregulator." - Create a robust "Consumer Financial Product Agency. - End the waste of long-term unemployment (Instead, of paying them to do nothing, pay them to do public works) Consider, also, Black's Five Fatal Flaws of Finance.

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Bank Regulator William K. Black: The best way to rob a bank is to own one.

I’ve often had the thought that our massive meltdown could be figured out if we could only recruit some intelligent and well-motivated people to gather and analyze the evidence. But who would those people be? Who could serve as the template the type of character we seek out in such people? Too bad we don't have 1,000 people like William K. Black. Black is the former senior regulator who cracked down on financial institutions during the savings and loan crisis of the 1980s, pointing fingers at five congressmen including John McCain. Black went about his work with such vigor that he even drew a death threat from Charles Keating. Have you ever gotten excited listening to anyone talking about the economy? In this breath-taking interview with Bill Moyers, Black offers his own carefully studied analysis regarding the "bailout." This is not the intentionally abstruse financial jargon that you usually hear when pundits discuss the meltdown. The theme of the Black’s interview is this: "The best way to rob a bank is to own one," which is also the title to a book he wrote in 2005. Black teaches economics and law at the University of Missouri — Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. This video is required viewing for anyone who is convinced that we are not getting the straight scoop from the corporate media or from our government.

Continue ReadingBank Regulator William K. Black: The best way to rob a bank is to own one.