The U.S. Presidential election campaign offers a choice between a candidate of the status quo, and a candidate who represents a leap in the dark. Here are three good articles about why voters might risk a leap in the dark.
William K. Blank is professor of economics and law at the University of Missouri at Kansas City, a former bank regulator and author of The Best Way to Rob a Bank Is to Own One(which I haven’t read).
In this TED talk, he explains how crooked bankers enrich themselves through what he calls “control fraud”. The method is as follows:
Make a lot of loans to people you know can’t pay you bank.
Conceal the bogus nature of the loans through fraudulent appraisals.
Collect high interest rates (for a while)
Report record profits (for a while)
Collect an enormous salary and enormous bonuses (for a while)
Escape scot-free with your riches when the crash comes.
There are two other elements that he doesn’t mention in this particular talk.
Convert the loans into financial securities and sell them to suckers
Go to Congress and the Federal Reserve Board to be bailed out when the crash comes.
Black said all this has been facilitated for the past 20 years by the Clinton, Bush II and Obama administrations, and by the Federal Reserve Board during that period. Everything is in place for another crash as big as what came before.
It seems obvious to me that we Americans need to (1) break up the “too big to fail” banks (those whose assets exceed a certain set percentage of Gross Domestic Product, (2) refuse to insure deposits that are used for risky investment and (3) prosecute financial fraud, as was done in the Bush I administration following the savings and loan crash.
The Big Lie That Haunts the Post-Crash Economy by Dean Stockman for The New Republic. The “big lie” is that “everyone” is to blame for the crash of the housing bubble, when in fact the bubble was mainly due to crooked financiers.
