More Bank Fraud

The latest bank scandal, concerning Belgium's Dexia, suggests that Europeans learned nothing from the 2008 financial crisis brought to them by the U.S., and now it's our turn to get the favor returned.

You may not care about every little example of criminal collusion between rich bankers and politicians who conveniently (for their careers) govern for the good of those same rich bankers, the whole group carefully practicing joint fraud for profit and using taxpayer funds to pay themselves back whenever they gamble wrong and lose money.

No doubt even that one sentence has made your eyes glaze over. So stop reading if you don’t really want to know the tawdry details of the latest government bailout of a bank – Belgium’s Dexia. Just realize this: Dexia is spelled A.I.G, and when A.I.G. collapsed in 2008 and was be bailed out by U.S. taxpayers (courtesy of Bush and Obama), the end result was some 10,000,000 unemployed Americans and a pile of foreclosures so big that those houses are still sitting empty and rotting. Unless you were on the moon for the last three years, you already know this story and can guess where we are, once again, headed, so I will not bore you with the details about Dexia.

The bottom line is that Europe evidently learned nothing from watching U.S. politician-banker complicity in fraud at popular expense in 2008, even though the resultant financial crisis hit them. Now it is the turn of the U.S. to be hit by European politician-banker complicity in fraud:

• Bankers are still committing financial fraud;
• Politicians are still covering up this fraud even when reported by government regulators;
• When the bills come due at these gambling firms…ah…“banks,” governments are still handing taxpayer funds to the banks and allowing the criminals to walk away with their pockets stuffed full of what amounts to stolen cash.

So here we go again. You may wish to stockpile some canned food, buy some non-Monsanto vegetable seeds, and start building a greenhouse. If you are a pessimist, you may wish to hire someone to dig you an old-fashioned well with a bucket (you know, the kind of well from which you can get water even if the electricity fails because, say, of social disruption and the interruption of government services).

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READINGS: For those of you who are masochists, further details are available via The New York Times, an Icelandic financial blog, the French paper Liberation, and this blog. Warning – consumption of these items during meals may cause serious gastro-intestinal upset.

On the secret bailouts Washington handed U.S. banks (beyond the well-publicized TARP bailout), see "Which Bank Is the Worst..."; for brilliant graphs showing the degree to which the rich are stealing the American Dream away from the other 99%, see "The Shocking Graphic Data...."

On the confused, corrupted, and weak-kneed effort of the 50 state attorneys general to hold Big Finance to account, see the critically important analysis by Adam Levitin, "The Sweep It Under the Rug Housing Plan." Levitin sums up the situation facing U.S. society nicely:

Who should pay? This is basic justice. Those who broke the economy should pay to fix it.  You break it, you take it. We bailed out the banks because they are indispensible to the economy as a whole, but that doesn’t mean that they shouldn’t have to pay now. $20-25 billion is a fine price tag for robosigning. But this isn’t and shouldn’t be about robosigning. Robosigning was symptom of a much larger endeavor in reckless lending, in which corner cutting was the order of the day, from MERS to securitization paper work to no-doc loans.  All of this was done to maximize profits and to enable a housing bubble that was hugely profitable to a limited number of financial institutions and with extraordinary collateral damage.  Simply put, there needs to be accountability for blowing up the economy.