Guest post by John Titus, writer and producer of Bailout For The Daily Bail.
Prosecution Of Banking Fraud Should Not Be A Left Vs. Right Issue
With the federal government doling out corporate welfare by the trillions, which ensures that the frauds perpetrated on Main Street in the bright light of day continue unabated, you’d have expected rabid packs of Democrats to burst from the chutes of federal power baying like beagles about the corruption that’s being systematically worked on the People.
It hasn’t happened. Deep Throat is a Republican cabal. Go figure.
This Crisis Is Worse Than The Great Depression
The first thing to understand about the raging global financial crisis is that it isn’t a financial crisis. It’s a legal crisis: the criminals who’ve done the damage have been rewarded for their fraud rather than prosecuted. We know this from the black letter of transcripts taken from congressional hearings, court depositions, government reports, what have you. A more interesting source of information lies in the personal accounts from government Insiders, which pretty much means, as we shall see, but for reasons that aren’t clear: Republicans.
The second thing to know is that the first thing guarantees that the crisis will exceed the Great Depression in severity. When unconstrained by prison walls, criminal enterprises, which operate on enormous profit margins will grow, quickly. As Catherine Austin Fitts says (see below), “crime that pays is crime that stays.” But given the sheer scale of the damage already inflicted (conservatively, $13 trillion), much growth from this point forward is going to spell the death of the entire economy.
The difference between then and now lies in the government’s response to the crisis.
The U.S. responded to the Great Depression by convening the Pecora Commission, rooting out the facts about the causes of the crisis, jailing criminals, and passing practical, common-sense legislation that forbade banking practices like commingling people’s savings with cash from casino operations.
The U.S. has responded to the current crisis by rewarding the casino banks with bailouts when their bets blew up, and then counseling them on how to avoid criminal prosecution when the settled dust reveals their flagrant legal violations. Indeed, the DOJ goes out of its way to accommodate the bloated parasites: the head of the DOJ’s criminal division, Lanny Breuer, recently traveled to Manhattan to instruct the white collar criminal defense bar on what threats to include on their PowerPoint slides before the DOJ to ward off prosecution.
Observe the dynamic at work here: the TBTF banks used the bailout money to acquire other banks and expand their fraudulent gambling operations, and then the DOJ tells the banks to use their massive size as means to avoid prosecution. This will not end well for the bankers and their government agents, who parrot the term “systemic” in hermetically sealed tragicomic oblivion, clueless about what happens to positive feedback loop systems like theirs.
The following chart of money velocity since the Great Depression dramatically illustrates the outcome:
Diagnosis: Stage 3 Federal Cancer
Sadly, this system is our problem, and its diagnosis is bleak.
Any number of people have measured the damage, and the numbers are huge red warning signs. Dennis Kelleher admits he pulled punches when he came up with $13 trillion.
We know the problem lies in Washington, D.C.
When you know these things about the federal government, you can bet the house that the cancer thrives in Washington, D.C. And you’d win, too, except that the federal government runs the casino at the criminals’ instructions.
The Cancer Says It’s All Good
Predictably, this rigged casino is Exhibit #1 in Fed Chairman Ben Bernanke’s case that the economy is recovering. But like every fraud, it can’t withstand scrutiny: 88% of the gains among the 500 S&P stocks this year come from 10 companies—seven of which (Bank of America, AIG, Goldman, Wells Fargo, JP Morgan, Citigroup, and GE) have received in excess of $10 trillion in bailout money.
That’s all you need to know about the recovery: it mostly consists of companies getting bailouts to produce one product, namely, fraudulent financial paper. The entire recovery—a recursion algorithm of fraud and bailouts—is a Ponzi scheme disguised by the veil of financial jargon, now threadbare, which remains impenetrable only to the media.
Why Aren’t Democratic Insiders Sounding The Alarm?
With the federal government doling out corporate welfare by the trillions to ensure that frauds are perpetrated up and down Main Street in the bright light of day, you’d have expected rabid packs of Democrats to burst from the chutes of federal power baying like beagles about the corruption that is being systematically worked on the People.
Nothing like that has even remotely happened, despite the fact that the 3-headed corporate welfare Godzilla (Hank Paulson, Ben Bernanke, and Tim Geithner) is a Republican.
In fact, until this year, not a single Democratic Insider other than Bill Black (who worked for Edwin Gray, a personal freind of the Reagans and a Republican) and James Galbraith (whose anti-fraud screeds, though commendable, lack specificity) broke ranks to so much as suggest criminality within what has historically stood as the Party’s archenemy, the financial Establishment. Finally, with the recent publication of Neil Barofsky’s Bailout and Jeff Connaugton’s Why Wall Street Always Wins earlier this year, Democrats can now point to a grand total of two (2) insiders who’ve taken on the powers that be by spilling the beans on the machinations of D.C.
When you get down to it, the only serious whistleblowers on the incestuous Wall Street-Washington orgy of criminal fraud over the last two decades have all come from the Republican Party.
The roster of Republican Insiders who tell the truth has grown a lot longer than most would’ve guessed back in 2008.