Sunday, December 23, 2012

Grand Bargain or The Great Betrayal?

I was recently surprised to find that William K Black, a man that I learned of back in 2009 during the depth of the banking crises had written an article in the left-leaning Huffington Post saying that cutting back government spending and  unraveling the safety net is a terrible thing. It appears that Black, a Democrat is unhappy about the goal of addressing the budget through a so-called "Grand Bargain", he sees this as more of a betrayal of the people.

On April 3, 2009, Black appeared on Bill Moyers Journal on PBS and provided critical commentary on the U.S. banking crisis. In the interview with Moyer, Black asserted that the banking crisis in the United States that started in late 2008 is a big Ponzi scheme; that the "liar loans" and other financial tricks were essentially illegal frauds; and that the triple-A ratings given to these loans was part of a criminal cover-up. He said that the "Prompt corrective Action Law" passed after the Savings and loan crisis mandated that ailing banks should be put into receivership. Black said that trying to hide how bad the situation is will simply prolong the problem, as happened in Japan's lost decade. Black also stated that Timothy Geithner is engaged in a cover-up and that the Obama administration does not want people to understand what went wrong or how bad the banking situation is today.

In the recent Huffington Post article, Black writes, Wall Street's greatest desire is privatizing Social Security. Wall Street stands to make scores of billions of dollars annually in additional fees should it ever buy enough politicians to privatize Social Security. The Republican Party's greatest goal is unraveling the safety net. They always wish to attack the most successful and popular programs introduced by the Democratic Party. Their problem is that they know it is toxic for Republican candidates to try to destroy the safety net. Only Democrats, through a "Great Betrayal", can give Republicans the political cover they need to unravel the safety net.

He goes on to say, The safety net is so popular with the American people because it consists of superb programs that constantly put the lie to Republican memes that the government is incapable of success.   Obama is telling the media that the Great Betrayal is his first, and overarching, priority should he be re-elected. We are forewarned and we must act now to make clear that we will block the Great Betrayal and crush at the polls any member of Congress who supports it. Do not concede the phrase "grand bargain" to the proponents of the betrayal. We went on to say that it is essential to call a plague by its real name if one is to resist it.

In 2009 Black was one of the very few really informed as to the facts. A lawyer, academic, author, and a former bank regulator, his expertise is in white-collar crime, public finance, regulation, law, and economics. He developed the concept of "control fraud", in which a business or national executive uses the entity he or she controls as a "weapon" to commit fraud.  I found it interesting that Black and I interpret what is going on with the Fiscal Cliff debate in Washington and the solution from totally different perspectives. His flaw may be that "government is the answer", my flaw hoping that the Republicans care more about the American people than their own self-interest. In the end, Black and I agree on one thing, the government, and financial system is corrupt.

If you are up for more please read my prior post;

No comments:

Post a Comment