Newshoggers Archive: Corporatocracy 101 Part III

Commentary By Ron Beasley

Barack Obama ran his campaign on the platform of change but by the time the election rolled around a year ago he had already been bought and paid for by Wall Street and the Financial Industry. James Lieber explains:

We've Bailed out the Banks. When Do We Go After the Crooks Behind our Financial Collapse?

When Barack Obama donned the crusader's mantle during the 2008 presidential campaign, his Web-savvy campaign team created KeatingEconomics.com and pushed it on millions of voters. The main video showed the Ichabod Crane�like Charles Keating�the wealthy, politically connected poster child of the '80s savings-and-loan scandal�in handcuffs.

The Obama video portrayed John McCain as Keating's stooge and likened the S&L crash to the 2008 Wall Street
meltdown, except that the current crisis is global and its bad guys
bigger and badder. Today's corporate villains were flashed on the
screen, among them AIG, Bear Stearns, Lehman Brothers, Fannie Mae, and Freddie Mac. The opening narrator was Bill Black, a Ph.D. criminologist and lead lawyer at the Office of Thrift Supervision,
who helped steer the brilliant federal effort that cleaned up the
S&L industry and won more than 1,000 felony convictions of senior
insiders while recovering millions of their ill-gotten dollars.

Those watching the compelling attack ad (still online) had every
reason to believe that Obama's approach would be just as hard-edged,
and that felon-busting G-men would rout the crooks and recover our
money.

This was not to be.

As it stands now, there is only one federal prosecution related to
the credit crash and bailout cycle, and it was begun by the Bush
administration's Justice Department in June 2008.

So what happened?

Black says that Obama's current efforts are doomed to fail�and, in a
twist, it's for lack of trying. "There is not a single successful
regulator giving him advice," says Black. Obama's is a fresh face, but
those of his crew aren't. Black pointedly views Treasury Secretary Tim Geithner
and SEC Chair Mary Schapiro as flops in the prelude to the crisis, who
flacked for the financial industry's "self-regulation." Some of Obama's
appointees have a history as ardent advocates for financial crooks and
active foes of regulation. Because neither the Obama team nor its
proposed reforms pack the requisite punch, Black predicts, "There will
be far more catastrophic losses." That would be on top of the trillions
of dollars already lost.

[.....]

So, where is the justice in the current crisis? Why have there
been so few prosecutions and only feeble attempts, at best, to claw the
money back? One reason may be that, in such infamous cases as the
Lehman Brothers collapse and Bank of America's absorption of Merrill Lynch,
the Fed and the Treasury were intimately involved with the financial
elite's deal making at the time. It's difficult to prosecute others for
securities fraud if you condoned the deals to begin with.

With many economists telling the administration that the two big to fail banks should be broken up and that the Glass-Steagall should be reinstated. With the financial industry fully in charge the Obama administration has taken a different and more sinister path.

Instead, the new administration is putting its energy into creating
what it believes will be a meltdown-proof new system of elite
"too-big-to-fail" banks, regulated by a beefed-up Federal Reserve.

Even the business establishment's Wall Street Journal
used the word "oligopoly" when it noted this summer that the Obama
administration, "after saving the banks, is now planning regulatory
changes that could establish an elite group of U.S. institutions with
large investment-banking activities" that will be "hard to join and
compete against."

Update:

Great comment from tr at the Corporatocracy 101 post: