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article imageOp-Ed: The GFC, Wall Street vermin and how corruption is the norm

By Paul Wallis     Nov 7, 2014 in Business
Washington D.c. - You’ll know some of the story about the Great Financial Crisis. The shoddy subprime mortgages, the “too big to fail” clichés, etc. are now part of history. What you may not know is that Washington actively supported massive criminal fraud.
In an interview with Rolling Stone’s leading business and financial journalist Matt Taibbi, a lady called Alayne Fleischmann lifts the sewer cover on what really happened. It’s a truly horrifying saga of major banks and the Justice Department doing everything they could to make sure the truth never came out. Billions of dollars were paid to hush everything up.
Put it this way- If you never read another thing in your life, read this story.
I’m not here to rehash Matt Taibbi’s interview or Alayne Fleischmann’s information about JP Morgan Chase and the desperate efforts to bury critical information by everyone, including the regulators. The reason for this article is to explore the culture of the GFC, and the disease called Washington which made it so incredibly easy for the banks and Wall Street to effectively destroy the US economy and annihilate the middle class.
The sale of “misrepresented” securities is like selling rocks and calling them diamonds. It’s fraud, pure and simple. In the case of the mortgage securities, it was obvious fraud. I wrote a lot of articles at the time, and everybody had a range of views, notably political views.
The political theory of deregulation is bad enough. It’s been an absolute disaster around the world. It’s always been a virtual gimme for corporate crime in all its forms. Deregulation shamelessly allowed Bernie Madoff, Enron and a host of other famous failures to damage investors.
This happened during a series of transactions which provided a virtual map of breaches of law, policies and even the basic tenets of rational thinking. The banks took this enormous load of subprime crap and foisted it on the capital market.
The sacred “investor society”, which votes GOP and thinks the Post Office is a form of communism, got taken to the cleaners. They then got themselves spun dry by their duly elected morons of both political shades. People lost their homes, even when they did pay their mortgages. It was one long series of injustices.
A total non-coincidence - The only people who took no damage at all were Wall Street, most of the corporate perpetrators, and their management. The rest of the world, that’s 7 billion people, took massive losses on their superannuation, investments, and everything else. Governments around the world congratulated themselves that they handled the crisis so well.
However, there’s another angle, which didn’t occur to anyone – When regulators are stooges for the “benefits” of deregulation to fraudsters. Most political appointees to statutory offices would be quite happy to crucify Christ a few more times if the money was right. Trashing the US economy was arguably simpler, requiring more phone calls and fewer nails.
The Department of Justice, which is the Thinking Man’s Statutory Joke, spent a lot of time not doing its job at all. The SEC, another hilarious, deformed attempt at total regulatory failure, apparently grovelled along with the deregulators. The FBI had its resources for investigating the subprimes actually reduced by “management”, when it was alleged that organized crime might be involved in the sale of the mortgages as securities.
This is corruption of a different kind – Corruption backed by “discretionary law”. A regulator can “decide to settle”, or “decide not to prosecute” practically anything. Any amount of criminal practices can effectively be written off by fines. This in fact is the usual way in which serial corporate offenders get away with marketing dangerous pharmaceuticals, some of which actually kill people.
For example -The mistakes in the US hospital system kill at a conservative estimate the equivalent of the casualties of the entire Vietnam War every year. Therefore, politicians and regulators refuse to do anything at all about the health system, on principle. If there’s a systemic problem, there’s a systemic solution, and people can keep right on dying. If the people complain, the people are the problem, not the issues.
Like crime, poverty, and mental illness, nothing is so important it can’t be denied, ignored, or simply forgotten. Regulators who don’t carry out studies on GMOs, drugs, food or anything else and approve them for consumption can’t be considered much more than stooges. Obviously, being stooges pays well, and better still, the other corrupt areas of government don’t investigate who gets paid for what very efficiently either.
Al Capone was probably the last person ever to have his income seriously evaluated like that. Wall Street is never checked for any kind of criminal activity, ever. Wall Street still “breaks laws like corn flakes”. Sure, you can have hysteria over micro seconds of trading advantages, but not over trillions of dollars of systemic fraud.
When it comes to financial issues, there are no laws. That’s what the GFC was about, and that’s what Washington’s sewer is still about. The American economy was effectively disembowelled because people were allowed to get away with it.
It’s not much of a surprise to see that destroying America only rated a few billion in wrist-slapping exercises. It’ll be even less of a surprise when the next tonnage of corporate “genius” hits the fan and does even more damage than the GFC.
This is the pattern –
• Ignore actual crime in any form for as long as possible, even when it’s common knowledge
• Ignore the damage done to the nation, the public, or anyone other than your sainted selves.
• If necessary, hold an investigation as totally useless as the JFK investigation and use it to produce as much misleading crap as possible.
• Be seen to be doing your job while not doing anything at all, and eventually not doing anything at all becomes your job.
This farcical situation has now been going on for years. Nobody has made the slightest attempt to fix anything since the GFC. The regulators who did nothing are still there, still doing nothing. Wall Street is still a herd of peasants with psychoses, making money to compensate for its evolutionary failures and eunuch-like culture.
A hugely over-valued market simply means a massive crash. One day, it’ll be a crash too far. Too big to fail isn’t the problem. It’s “too big to get up again” that’ll be the killer.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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