Monday, September 5, 2011

The Appearance of Elite Collusion Against Democracy

Apparent fraud brought us the financial crash of 2008 and resultant, on-going tsunami of (permanent?) unemployment: apparent fraud throughout the whole system of elite rule, which was characterized by government agencies concealing information to prevent open democratic debate, rosy scenarios, conflicts of interest, and failure to hold anyone responsible for his actions. Will those leaders stay under this cloud of apparent guilt for the rest of their lives, staining the name of democracy, or will they have their day in court?

The shocking and sobering expose of corporate-government financial collusion to enrich the rich by stealing from all the rest of us offered by Gretchen Morgenson and Joshua Rosner in Reckless Endangerment concludes with the following assessment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010:

It did not insist that large and unmanageable institutions be cut down to size to alleviate their threats to taxpayers in the future. Nor did it increase the accountability of those running institutions that will need government assistance in the future.

Therefore, despite this presumed reform of the corrupt U.S. financial system, will, they ask, a debacle like the credit crisis of 2008 ever happen again? Their answer: Most certainly, because Congress decided against fixing the problem of too-big-to-fail institutions when it had its chance. [304-305]

Congress failed the American people. That is the outside peel of the infinitely-layered onion of elite corruption.

As for why Congress failed, peeling back the second layer of the onion makes that question is easy to answer: the foxes still guard the henhouse. As the authors make painfully clear, many of the key individuals in charge of bending and breaking the rules, of looking the other way and of carefully planning and implementing fraudthose there at the creation of economic ruin for millions of Americansremain either in power officially or active behind the scenes. No real prospect of bringing these men to justice is visible on the horizon.

Ripping one more layer off this rotten political onion, the problem goes well beyond the handful of corrupt, short-sighted, and arrogant politicians, Wall Street executives, and mortgage company managers named in Reckless Endangerment. As the authors make clear, the real rot was systemic: the collusion not just of individuals but of the institutions at the core of the system, including Wall Street, mortgage companies, rating agencies, the privileged semi-governmental Fannie Mae, Congress, the White House, both the Democratic and Republican branches of the monopolistic/elitist political party that runs the whole show, and most shockingly even the actual regulatory agencies designed to prevent such corrupt and apparently criminal governance.

From all sides, the leaders stood shoulder-to-shoulder bulldozing aside every courageous, far-sighted, and patriotic civil servant who warned of the coming disaster. Whatever other lesson one takes away from the financial collapse of 2008, we should all remember this one: it was no surprise. It resulted from the willful denial of truth and a literally incredible inability on the part of everyone who was profiting to remember the warnings of the very recent past (the original Depression, the S&L scandal of the late 1980s, the Long-Term Capital Management scandal, the 2001 Enron scandal, the 2001 crash of the CDO [collateralized debt obligation] market, the 2002 WorldCom scandal) in the interest of maximizing personal profit. And who can blame the thieves? After all, we let them keep what they stole, and it seems that no one wants to know how many layers of the onion are rotten.

It is hard to imagine how faith in democracy in America can be restored unless those members of the elite under the cloud of a prima facie case of criminal behavior can have their day in court to make the case to the American people that they are in fact not guilty. If they by some miracle do not deserve to be jailed, they have the right to clear their names.

Far more important, the American people deserve closure on what must be one of the most egregious betrayals of the American people by a rapacious gang of the ruling elite in American historyor perhaps not. Perhaps if the Geithners, the Raines, the Greenspans, the Blankfeins, the Bensingers, the Weills, the Lewises, the Paulsons, the Gramms, the Leaches, the Blileyes, the Franks, the Johnsons, the Clintons had their day in court, they would explain how they all had our best interests at heart.

The Appearance of Fraud

Republican member of the House of Representatives Darrell Issa has been trying to protect Goldman Sachs from being investigated while pouring his wealth into Goldman accounts. If he thinks Goldman is a valuable and upright American institution, then why is he afraid of an investigation that could exonerate Goldman and restore its tattered reputation?

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