US Financial Collaps Driven by 'Fraud'

Is anyone surprised?

Bill Moyers recently interviewed William K. Black, a professor of economics and law with the University of Missouri, about our current economic disaster. What Black alleged should come as no surprise to anyone paying the least bit of attention.

[Black] alleged that American banks and credit agencies conspired to create a system in which so-called "liars loans" could receive AAA ratings and zero oversight, amounting to a massive "fraud" at the epicenter of US finance.

But worse still, said Black, Timothy Geithner, President Barack Obama's Secretary of the Treasury, is currently engaged in a cover-up to keep the truth of America's financial insolvency from its citizens.

Wow, this sounds really bad. And if true, it is bad, or is it?

Maybe we need to keep digging. Here is more of what Professor Black has to say:

What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I'm quoting Fitch, the smallest of the rating agencies, "the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined."

He equated the entire US financial system to a giant "ponzi scheme" and charged Treasury Secretary Timothy Geithner, like Secretary Henry Paulson before him, of "covering up" the truth.

Yikes!

Why would an administration committed to change appear to be giving us more of the same?

"Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?" asked Moyers.

"Absolutely, because they are scared to death," he said. "All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, 'We just can't let the big banks fail.' That's wrong."

Ultimately, said Black, the financial downfall of the United States in the wake of the Bush years is due to "the most elite institutions in America engaging in or facilitating fraud."

"When will Americans wake up and hold the real criminals - Banksters - accountable for their actions, and pressure the government to enact systemic changes to prevent future abuses?"

So there you have it. During the Reagan administration we saw the beginning of deregulation -- or more plainly, the beginning of the end.

During the George W. Bush administration the crooks had the keys to the bank. The whole lot of them should be in jail, not receiving billion dollar bailouts.

Now, about the Obama administration. Maybe they are trying to "protect" us ... but in the same way they are "protecting" us by not releasing the torture photos?

Maybe it's time to level with the American people, and make the bad guys pay for their crimes. What do you think?

The full interview can be viewed on-line.