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William K. Black & 169 Economists Endorse Bernie Sanders’ Plan To Reform Wall St. And Rein In Greed
"I did not know the bank was being robbed because I was engaged in my sworn duty as a police officer."
170 Economists Endorse Bernie Sanders’ Plan To Reform Wall St. And Rein In Greed
By Jason Easley on Thu, Jan 14th, 2016 at 2:23 pm
170 of the nation’s top economists have released a letter endorsing Democratic presidential candidate Bernie Sanders’s plan to reform Wall Street.
A letter signed by 170 economists including former Labor Secretary Robert Reich, University of Texas Professor James K. Galbraith, Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC., Brad Miller, former U.S. Congressman from North Carolina, and William K. Black, University of Missouri-Kansas City endorsed the Sanders plan to reform Wall Street.
The economists wrote:
Both campaigns are rolling out endorsements on a daily basis, but the anger over Wall Street crashing the US economy and walking away with a slap on the wrist is one of the main drivers behind the popularity of Sen. Sanders.
CONTINUED...
http://www.politicususa.com/2016/01/14/170-economists-bernie-sanders-plan-reform-wall-st-rein-greed.html
By Jason Easley on Thu, Jan 14th, 2016 at 2:23 pm
170 of the nation’s top economists have released a letter endorsing Democratic presidential candidate Bernie Sanders’s plan to reform Wall Street.
A letter signed by 170 economists including former Labor Secretary Robert Reich, University of Texas Professor James K. Galbraith, Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC., Brad Miller, former U.S. Congressman from North Carolina, and William K. Black, University of Missouri-Kansas City endorsed the Sanders plan to reform Wall Street.
The economists wrote:
In our view, Sanders’ plan for comprehensive financial reform is critical for avoiding another ‘too-big-to-fail’ financial crisis. The Senator is correct that the biggest banks must be broken up and that a new 21st Century Glass-Steagall Act, separating investment from commercial banking, must be enacted.
Wall Street’s largest banks are now far bigger than they were before the crisis, and they still have every incentive to take excessive risks. No major Wall Street executive has been indicted for the fraudulent behavior that led up to the 2008 crash, and fines imposed on the banks have been only a fraction of the banks’ potential gains. In addition, the banks and their lobbyists have succeeded in watering down the Dodd-Frank reform legislation, and the financial institutions that pose the greatest risk to our economy have still not devised sufficient “living wills” for winding down their operations in the event of another crisis.
Secretary Hillary Clinton’s more modest proposals do not go far enough. They call for a bit more oversight and a few new charges on shadow banking activity, but they leave intact the titanic financial conglomerates that practice most shadow banking. As a result, her plan does not adequately reduce the serious risks our financial system poses to the American economy and to individual Americans. Given the size and political power of Wall Street, her proposals would only invite more dilution and finagle.
The only way to contain Wall Street’s excesses is with reforms sufficiently bold and public they can’t be watered down. That’s why we support Senator Sanders’s plans for busting up the biggest banks and resurrecting a modernized version of Glass-Steagall.
Both campaigns are rolling out endorsements on a daily basis, but the anger over Wall Street crashing the US economy and walking away with a slap on the wrist is one of the main drivers behind the popularity of Sen. Sanders.
CONTINUED...
http://www.politicususa.com/2016/01/14/170-economists-bernie-sanders-plan-reform-wall-st-rein-greed.html
For those new to the subject of forensic economics: Those 170 economists are a Who's Who of Integrity.
28 replies
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= new reply since forum marked as read
The Colossus
While Wall Street-on-the-Potomac may not notice, a future AG just might.
It took me 20 years after the S&L debacle to learn that a famous non-economist had described the Gresham’s dynamic centuries before Akerlof’s article. This acute observer was Irish.
On February 3, 2015, the U.S. Department of Justice (DOJ) announced a settlement of well over $1 billion with the credit rating agency, S&P. DOJ’s civil complaint alleged that S&P engaged in fraud by inflating credit ratings on toxic housing derivatives in order to keep the business of the issuers of those derivatives (who generated a successful Gresham’s dynamic by setting the credit rating agencies in competition with each other for laxity.
SOURCE: http://neweconomicperspectives.org/2015/02/oral-testimony-william-k-black.html
[font color="green"]The Lilliputians look upon fraud as a greater crime than theft. For, they allege, care and vigilance, with a very common understanding, can protect a man’s goods from thieves, but honesty hath no fence against superior cunning. . . . (W)here fraud is permitted or connived at, or hath no law to punish it, the honest dealer is always undone, and the knave gets the advantage (Swift, J., Gulliver’s Travels (1726)).[/font color]
On February 3, 2015, the U.S. Department of Justice (DOJ) announced a settlement of well over $1 billion with the credit rating agency, S&P. DOJ’s civil complaint alleged that S&P engaged in fraud by inflating credit ratings on toxic housing derivatives in order to keep the business of the issuers of those derivatives (who generated a successful Gresham’s dynamic by setting the credit rating agencies in competition with each other for laxity.
SOURCE: http://neweconomicperspectives.org/2015/02/oral-testimony-william-k-black.html
While Wall Street-on-the-Potomac may not notice, a future AG just might.
The Lilliputians look upon fraud as a greater crime than theft. For, they allege, care and vigilance, with a very common understanding, can protect a man’s goods from thieves, but honesty hath no fence against superior cunning. . . . (W)here fraud is permitted or connived at, or hath no law to punish it, the honest dealer is always undone, and the knave gets the advantage (Swift, J., Gulliver’s Travels (1726)).
Great reference, Octafish.
The Wall Street settlements and the new aristocracy
wsws.org, 2 April 2014
Last week, Bank of America became the latest major financial institution to announce a multi-billion-dollar settlement with US regulators of charges related to the 2008 financial meltdown. In a settlement worked out with the Federal Housing Finance Agency, the bank agreed to pay $5.83 billion in fines and buy back $3.2 billion in mortgage-backed securities from the government-sponsored mortgage finance companies Fannie Mae and Freddie Mac, to whom it sold the toxic assets in the run-up to the Wall Street crash. The settlement involves the largest fine levied by a single federal regulator in US history.
The agreement adds to the more than $100 billion in fines that have been levied by US regulators on major American and global banks since the financial crisis, more than half of which has been imposed over the past year.
The record size of the settlements points to the pervasiveness and scale of the criminality of the banks and their top officials. And yet, not a single leading bank executive has been criminally charged.
This is not for lack of evidence. The 2011 reports by the Senate Permanent Subcommittee on Investigations and the Financial Crisis Inquiry Commission document in considerable detail the fact that the 2008 crash was triggered by criminal wrongdoing by bank executives. Carl Levin, the chairman of the Senate Permanent Subcommittee on Investigations said that the committee had found “a financial snake pit rife with greed, conflicts of interest and wrongdoing.”
The most egregious crimes by Wall Street and international banks that have led to financial settlements with US regulators include the following:
The settlements themselves were worked out between the banks and their regulators so as to have the maximum public relations effect, creating the appearance that the banks were being held accountable while minimizing the financial impact on the companies. The banks write off the fines—many of which are tax deductible—as part of the “cost of doing business.”
Not only have no top bankers been prosecuted, no major US banks have been broken up or nationalized. The big banks have grown even bigger and more powerful and have recovered their previous levels of profitability. Even taking into account the settlements with regulators, the six largest US banks made $76 billion in profits last year, just under the record set in 2006 and eclipsing every other year since 2008.
Wall Street pay, too, has hit record levels. The average bonus payout for Wall Street employees grew by 15 percent in 2013, reaching its highest level since the crash. Last week, both Bank of America and Morgan Stanley announced they were nearly doubling the pay of their respective chief executives for 2013.
SNIP...
The refusal of the government of the United States or that of any other major industrialized country to prosecute the bankers whose illegal operations triggered the crash of 2008 and subsequent global recession, or take any action against the banks that they head, demonstrates that society is once again dominated by a parasitic elite that, like the aristocrats of old, is above the law.
CONTINUED...
http://www.wsws.org/en/articles/2014/04/02/pers-a02.html
wsws.org, 2 April 2014
Last week, Bank of America became the latest major financial institution to announce a multi-billion-dollar settlement with US regulators of charges related to the 2008 financial meltdown. In a settlement worked out with the Federal Housing Finance Agency, the bank agreed to pay $5.83 billion in fines and buy back $3.2 billion in mortgage-backed securities from the government-sponsored mortgage finance companies Fannie Mae and Freddie Mac, to whom it sold the toxic assets in the run-up to the Wall Street crash. The settlement involves the largest fine levied by a single federal regulator in US history.
The agreement adds to the more than $100 billion in fines that have been levied by US regulators on major American and global banks since the financial crisis, more than half of which has been imposed over the past year.
The record size of the settlements points to the pervasiveness and scale of the criminality of the banks and their top officials. And yet, not a single leading bank executive has been criminally charged.
This is not for lack of evidence. The 2011 reports by the Senate Permanent Subcommittee on Investigations and the Financial Crisis Inquiry Commission document in considerable detail the fact that the 2008 crash was triggered by criminal wrongdoing by bank executives. Carl Levin, the chairman of the Senate Permanent Subcommittee on Investigations said that the committee had found “a financial snake pit rife with greed, conflicts of interest and wrongdoing.”
The most egregious crimes by Wall Street and international banks that have led to financial settlements with US regulators include the following:
* Goldman Sachs, Deutsche Bank, JPMorgan Chase and other banks sold mortgage-backed securities they knew to be virtually worthless, helping to trigger the 2008 crash. Even as the banks were selling these securities to investors, they were making huge profits by betting against the same securities, without telling those to whom they were palming off the securities.
* Major US banks, including Citigroup, Wells Fargo and Bank of America, illegally processed and even forged home mortgage documents in order to more quickly foreclose on the homes of families that had fallen behind on their mortgage payments. The number of people illegally foreclosed on will never be known because the Obama administration put a stop to the tally, but the figure is likely in the millions.
* Nearly all of the major US and international banks manipulated the London Interbank Offered Rate (Libor), the benchmark global interest rate used to set rates on some $350 trillion in financial assets, including mortgages, credit cards, student loans and bonds. By falsely reporting the interest they paid for loans from other banks, these institutions concealed their losses and increased their profits—at the expense of individual retirees, home and car owners, pension funds and municipalities all over the world.
* Major banks, including JPMorgan and UBS, were key partners in the $65 billion Ponzi scheme operated by Bernard Madoff. Earlier this year, JPMorgan, Madoff’s main banker, agreed to pay $2 billion to settle charges that it knowingly profited from Madoff’s scam. The deal shielded JPMorgan and its CEO, Jamie Dimon, from criminal charges through a “deferred prosecution” provision.
The settlements themselves were worked out between the banks and their regulators so as to have the maximum public relations effect, creating the appearance that the banks were being held accountable while minimizing the financial impact on the companies. The banks write off the fines—many of which are tax deductible—as part of the “cost of doing business.”
Not only have no top bankers been prosecuted, no major US banks have been broken up or nationalized. The big banks have grown even bigger and more powerful and have recovered their previous levels of profitability. Even taking into account the settlements with regulators, the six largest US banks made $76 billion in profits last year, just under the record set in 2006 and eclipsing every other year since 2008.
Wall Street pay, too, has hit record levels. The average bonus payout for Wall Street employees grew by 15 percent in 2013, reaching its highest level since the crash. Last week, both Bank of America and Morgan Stanley announced they were nearly doubling the pay of their respective chief executives for 2013.
SNIP...
The refusal of the government of the United States or that of any other major industrialized country to prosecute the bankers whose illegal operations triggered the crash of 2008 and subsequent global recession, or take any action against the banks that they head, demonstrates that society is once again dominated by a parasitic elite that, like the aristocrats of old, is above the law.
CONTINUED...
http://www.wsws.org/en/articles/2014/04/02/pers-a02.html
Millions of Americans lost their homes during the Wall Street scam of 2008, but they are just paupers, peons and useless eaters to those who really matter, the monied.
