Legislating Greater Wall Street Theft:
The Sick Face Of Crony Capitalism
31 March 2012
By Stephen Lendman
Political Washington is Wall Street's best friend.
Whatever crooked bankers want they get. Their business
model features grand theft. Wealth's amassed through
fraudulent double-dealing.
Lawmakers facilitate their racketeering. They're
rewarded in kind. Only fleeced households, investors,
communities and nations lose out.
Their dirty game continues unobstructed. New
legislation enhances what's on the books. Another bill
will become law when Obama signs it. Wall Street's
again celebrating, and why not. Business is better
than ever, courtesy of complicit lawmakers.
At issue is the Jumpstart Our Business Startups Act
(the JOBS Act). On March 8, the House passed it
overwhelmingly 390 - 23. On March 22, Senate followed
73 - 26. Doing what he does best, Obama will sign it
into law. He'll again betray America's 99% in the
process.
When everything comes up roses for Wall Street,
ordinary people get scammed. It's the same every time
like loaded dice let the house win.
Former bank regulator/financial fraud expert Bill
Black explained what's at stake in his article
headlined, " ‘The only winning move is not to play' -
the insanity of the regulatory race to the bottom."
He called the imminent JOBS Act passage reminiscent of
the "worst anti-regulatory travesties in the financial
sphere (that) had broad, bipartisan support." Don't
they all, especially in recent decades.
He reviewed some of the worst past legislation and
congressional actions, including:
(1) the 1982 Garn-St. Germain Act that gave S & Ls a
license to steal.
(2) the 1987 Competitive Equality in Banking Act (CEBA).
Reflecting on the double-dealing chicanery behind it,
Black said his "psyche still bears the scars of this
combined onslaught. It was the political equivalent of
being on the receiving end of a B 52 Arc Light (carpet
bombing) mission in Vietnam."
(3) the 1993 "Reinventing Government" scam. It was
premised on the view that anything government does,
business does better, so let it. Deregulation went
wild.
(4) the 1995 Public Securities Litigation Reform Act (PSLRA)
made it harder for fraud victims to sue. As a result,
the financial sector became "more criminogenic." CEOs
were licensed to loot with impunity. The 1998 PSLRA
amendment was even more hostile to fraud victims.
(5) the 1999 Gramm-Leach-Bliley Act. It repealed
Glass-Steagall. The 1930s law separated commercial
from investment banks and insurers, among other
provisions curbing speculation.
(6) the 2000 Commodities Futures Modernization Act.
It's so bad, it was tucked away in an appropriations
bill near the end of Clinton's tenure. It was his
final public betrayal, and what a whopper to endorse.
It legitimized "swap agreements" and other "hybrid
instruments" at the core of today's problems. It
prevented regulatory oversight of derivatives and
leveraging. It made Wall Street a casino operating on
only the house wins rules.
Among other provisions, it contained the "Enron
Loophole." Enron Online became the first
Internet-based commodities transaction system. It
rescinded regulations in place since 1922.
Derivative scams went wild. Enron fleeced investors
and energy purchasers with impunity until its house of
cards collapsed.
Alan Greenspan endorsed derivatives at the time. He
lied calling them a way to share risks. They turned an
economic downturn into the greatest Depression for
most households. They're either impoverished,
bordering on it, or heading for it before decade's
end. A Clinton-Greenspan combo made it possible.
Black could have listed many more legislative and
deregulatory public betrayal examples, including
Obama's so-called financial reform only bankers could
love. They should. They wrote it. It assures business
as usual codified into law under a reform mantle.
Black moved on to the 2012 JOBS Act. He called it "the
product of a feeding frenzy by lobbyists who are
finally able to enact every fraud-friendly provision
they ever dreamed of making law. The only kind of
financial bill that can pass with overwhelming support
is an anti-regulatory" one.
The criminal class in Washington is bipartisan. FIRE
sector (finance, insurance and real estate) companies
are their largest contributors. Whatever they want,
they get. Through the ages, greasing palms worked like
charms. In large enough amounts, they always work.
Black said financial crises embrace "three
(bipartisan) 'de's' - deregulation, desupervision, and
de facto decriminalization." They create epidemics of
fraud. Real reform's impossible. Greater crises are
assured. Each time, looser restrictions follow.
Economies, households, and lives are destroyed for
profit.
Since the late 1970s, America "trashed a regulatory
system that was the envy of the world." Now it's a
travesty.
Black called the JOBS Act "insane on many levels. It
creates an extraordinarily criminogenic environment in
which securities fraud will become even more out of
control."
It continues a regulatory "race to the bottom. The
only winning move is not to play...." The bill's
rationale is deregulatory madness must be won.
Otherwise the City of London and/or other financial
centers will surpass us.
Its passage ignored the Financial Crisis Inquiry
Commission's (FCIC) findings. It was established to
determine the current crisis' cause. It explained the
three "de's" problem. It specifically condemned
"regulatory arbitrage." It revealed destructive
deregulatory madness.
The JOBS Act ignored expert anti-fraud input. The
best, brightest, and most honest unanimously condemned
the bill. Enacting it also bypassed others "who
designed and implemented successful means to limit the
crises, who prevented problems through effective
supervision from becoming crises, and who held"
criminal bankers accountable.
Further, people who got everything wrong earlier
designed the Act. Failure's institutionalized. So is
fraud. What succeeds gets trashed.
The unique aspect of today's crisis is that criminal
bankers most responsible got off scot-free to steal
again. They gained massive wealth and stand to gain
much more.
Earlier fraudsters were prosecuted. Not a single Wall
Street boss or top official faced charges this time.
The JOBS Act represents "the sick face of crony
capitalism."
Western-style capitalism reflects FIRE sector
dominance over industry involved in making things.
Financial giants are predators. We're prey. Parasitism
describes their business model. In other words, the
grandest of grand theft.
A system this bad can only get worse. Money power
alone matters. It's fraudulently manipulated to make
more of it at the public's expense. Jobs are destroyed
for greater profits. So are economies and peoples'
lives. They're expendable to be exploited and trashed.
The JOBS Act is "so fraud friendly that it will harm
capital formation," create greater job losses, and
raise poverty to record levels. At the same time,
large-scale white-collar crimes are whitewashed.
Instead of repudiating and prosecuting fraud, it's
encouraged.
The Act's opaqueness makes it easier than ever. We
know, said Black, "this increases fraud." Instead of
living and dying by it, Wall Street crooks thrive on
it, courtesy of political Washington.
Financial giants today are weapons of mass
destruction. Freed from regulatory constraints, they
extract wealth from households, investors, communities
and nations. They operate like locust hordes consume
vegetation with ease. Main Street feels their sting.
A Final Comment
In the 1980s, Russian comedian Yakov Smirnoff appeared
on US television. His tag line about America was
calling it "What a country!" In Soviet Russia, the
"government control(led) corporations. In America,
corporations control the government."
Profiteering is a way of life, especially on Wall
Street. "What a country" indeed, and the worst is yet
to come. Bet on it!
Stephen Lendman lives in Chicago and can be reached
at lendmanstephen@sbcglobal.net. Also visit his blog
site at sjlendman.blogspot.com and listen to
cutting-edge discussions with distinguished guests on
the Progressive Radio News Hour on the Progressive
Radio Network Thursdays at 10AM US Central time and
Saturdays and Sundays at noon. All programs are
archived for easy listening. http://www.progressiveradionetwork.com/the-progressive-news-hour/.
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