In 2004, the FBI warned about an epidemic of mortgage fraud. But the Bush Administration didn’t heed the warning. The credit rating agencies handed out triple-A ratings to mortgage security bond issuers without ever taking a look at a single loan backing the debt. Treasury Secretary Timothy Geithner — the “failed legacy regulator” — is engaging in a $2 trillion taxpayer-backed enterprise to cover up the simple fact that our major banks are insolvent.
Those are just a few of the assertions former S&L regulator William Black shares with Bill Moyers in a gripping 28-minute interview tearing through Twitter (h/t MicrocapTwits). Black damns the hands-off policies of the Bush Administration but minces no words when it comes to President Obama, whom he backed in the election. His policies are “substantively bad” and “violate the law.”
It’s a compelling interview, to say the least. But what makes it truly irresistible is Black’s plain English explanations of the crisis. He avoids jargon and speaks in terms that anyone can understand. He doesn’t indulge in any screed or name-calling. His command and interpretation of the facts speak for themselves; it is a mature and devastating piece of analysis that essentially argues that the CEOs at major lending institutions perpetrated a Ponzi scheme on a mind-boggling scale. Bernie Madoff, by contrast, is a piker.
Black’s disarms as he explains outrageous uses of taxpayer money — like AIG deploying $5 billion in bailout funds to repay UBS. UBS, Black reminds us, is not only a satisfied AIG counterparty but also a scofflaw recently forced to fork over a $780 million fine to avoid prosecution for helping US citizens dodge taxes. In other words, the taxpayer paid the penalty for UBS and never even got a “danke schoen.”
Forego the popcorn as you watch this video. You may choke. (Bill Moyers Journal: William Black on the Bust)
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