(archived from February 19, 2011)
by Scott Creighton
It's called Limited Hangout Controlled Opposition.
Cenk Uygur interviews Matt Taibbi about his new article in Rolling Stone magazine which looks at how few (one) of these criminal bankers and financial CEOs have been prosecuted for their blatant criminality over the past 12 years or so. In the end, Taibbi finally suggests that the reason no one got prosecuted as they should have was because of the “revolving door” in Washington regulatory circles. Bullshit.
Bullshit, bullshit, bullshit, bullshit, bullshit.. (and for that international flair…) bullshito
The revolving door, where people leave regulatory positions to go to work for the people and the institutions they failed to regulate, is a PERK… it is NOT the problem itself. It certainly should be against the law, but the revolving door as the answer to what happened is a sickening oversimplification of the situation and it fails to bring the larger problem to light.
These people were doing what they were told to do.
Crippling America’s economy and the economy of much of the Western world in Europe was the end-game; it was the plan. It created the narrative needed to impose IMF austerity measures on social democracies across the world. That was the plan and we ALL know that now. Making as much money as they possibly could during that game plan through whatever illegal means they could dream up, well, that’s just how Wall Street works. If you already know it’s “no holds barred”, then take advantage of the “get out of jail free” card.
One way we understand this is the fact that these processes, these derivatives schemes would ONLY work, only work, if they knew, before-hand, that they would not be held accountable for this… if they KNEW they would not be prosecuted.
These are serious Wall Street crimes which come complete with long prison terms and asset forfeitures. None of these people are going to risk those consequences in such obvious and reckless schemes without knowing full well, at the start, that they will not be held accountable in the end when the shit hit the fan. That’s why they did it. These aren’t stupid people.
They would also not set up their companies to fail monumentally like they did. Each of these institutions, Goldman Sachs, AIG, CitiGroup et al. , each of them understood that if they were forced to eat the toxic assets (worthless assets they sold to pension funds, 401ks, money market accounts, local and state government managers) that they were going to be on the hook for eventually, it would be the end of their financial institution. Hense… Too Big Too Fail and the 12 trillion dollar backdoor bailouts. But they knew this going into this process. They had to have.
Since it started with the Clinton regime, then moved through both Bush and Obama, all of the last 3 administrations are just as guilty as the banks for doing this…
AND THAT IS WHY THEY WON’T PROSECUTE, CENK.
If they start to really investigate Fuld and Blankfein, where do you think it’s going to end up? Do you think ONLY banksters will go to prison? The Clinton regime deliberately killed Glass-Steagall and then made it illegal to regulate derivatives like those used to create this mess… the same financial instruments you spoke about for 8 minutes. Then the Bush administration pushed the housing bubble by making the American dream of owning your own home more affordable (ha ha) with various programs to entice people to buy into this shit. Is this what passes for journalism at Rolling Stone these days?
Why won’t they investigate? Why didn’t the Clinton administration (ever heard of Brooksley Born?”, the Bush administration, and now the Obama administration prosecute these OBVIOUS crimes? Because they are the ones who told them to do it. Pure and simple.
Now here is the real question Matt and Cenk… why do you let these administrations off the hook? What revolving door are you guys looking to cash in on? Because what you are doing is fixing the blame on lower level regulators as if they themselves set policy.
What you are doing is giving a pass to the heads of the administration who determine what Justice does and who they go after. Or who they don’t.
What you are doing is pretending that this is a group of “bad apples” as opposed to a systemic problem relating to a political agenda. It’s similar to what the previous administration did when faced with the leaked torture assessment and then the photos from Abu Ghraib. “It’s just a few bad apples… no need to look further”
Regulations didn’t work because several of the previous (and current) administrations didn’t WANT them to work, not simply because of a few greedy regulators were looking to cash in like “pro-ball players” at the NFL draft as Matt Taibbi laughable suggests. Just like Wall Street bankers, the average regulator is a rather intelligent individual who clearly understands that deliberately failing to do one’s job and then expecting to get paid for it is a crime; a serious crime, which would land them in jail, were the fix not already in on a level much higher than theirs. A simple understanding of the free market ideological of people like Alan Greenspan and Robert Rubin will make the anti-regulatory atmosphere at the highest levels of government readily clear to anyone paying attention.
When Brooksley Born was appointed to head the regulatory commission which oversaw the financial derivatives markets, Alan Greenspan, then head of the Federal Reserve (appointed by Clinton), called her over to have lunch with him at the Fed. Famously he told her that they were probably going to “disagree on fraud”. When she asked what he meant by that he said “you probably think there should be rules against it.” When she said yes she did, he said “Well, I think the market will figure it out” .
“Greenspan was someone who didn’t believe that fraud needed to be enforced.”. “Even the notion that we should police fraudulent activity was something that he (Greenspan) didn’t think was a given” – Frontline
Curious when you consider what happened over the next 10 years, isn’t it? Curious now that you are writing about how fraud is not being prosecuted in America by these same people (Rubin, Summers, Geithner still involved in this current administration… along with the Clintons, by the way)
In 1998, when Brooksley Born was starting to look into regulating the “over the counter” derivatives markets, it was Larry Summers, acting on behalf of Robert Rubin, who contacted her and demanded she stop immediately. If you have any questions about that, you can simply ask Larry and you can probably find him in the White House. “What was it that was hidden in this market? Why did this have to be a completely dark market? That’s what had me troubled.” Brooksley Born
What was hidden, what was going to be hidden, was the instrument which would finally bring about a dramatic change in how America was run financially. We are seeing the fruits of that labor right outside in the street, right out in the open in Wisconsin. What we are seeing is the neoliberalization of America just like so many other nations we have imposed this corrupt system on in the past.
However, you failed to mention any of that in your interview, didn’t you? No, it’s just those bad apples, that revolving door, right? I don’t think so. Sometimes I wonder, had you two been around doing this work back then, would you have stood with Brooksley Born or would you have been part of the corporate media smear machine, let loose by Summers and Rubin, that called her an over-reaching executive of a po-dunk agency?
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