The banks and our government continue to cover up the fraud
By Chip Parker, Jacksonville Consumer Attorney on Apr 5, 2009 in Mortgage Reform, Uncategorized
In a fascinating interview, William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, describes to Bill Moyers the greatest fraud in the history of our country – the collapse of the American Economy.
Although my Mortgage Law Network colleagues and I have been closely following the unwinding of out financial institutions, it sickens me to hear someone as well respected as Mr. Black so adeptly describe the abject fraud that has plagued the banking industry for more than a decade.
As he explains, the “subprime meltdown” was actually planned in the boardrooms and offices of bank CEOs. According to Black:
Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you’re a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there’s going to be a disaster down the road.
In the interview, Mr. Black spares neither the Bush Administration nor the Obama Administration. Bush is guilty of understaffing federal regulatory agencies in charge of overseeing banking activity, and Obama has failed to remove from key government and banking positions the very people who caused the collapse.
Although this current financial crisis is 100 times as great as the S&L crisis of the mid-80’s, there is only 1/20th of the regulators in place to investigate this scandal.
This interview is an indictment of our bankers and politicians and should be seen by anyone with an interest in the future of our country.
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