Bill Black: More Proof of Obama Policy of Covering Up for Elite Financial Criminals

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from “New Economic Perspectives .

The New York Times published a column by its leading financial experts, Gretchen Morgenson and Louise Story, on November 22, 2011 which contains a spectacular charge against the Obama administration’s financial regulatory leaders. I have waited for the rebuttal, but it is now clear that the administration does not contest the charge.

The specific example that prompted the NYT article (“Financial Finger-Pointing Turns to Regulators”) was a civil action against a former executive of IndyMac. IndyMac was supposed to be regulated by the Office of Thrift Supervision (OTS). OTS was the worst of the federal financial regulators – which is a large statement. It was so bad that the Dodd-Frank Act killed it. I used to work for OTS. One of the things I did to make myself unemployable during the S&L debacle was to testify before Congress against the head of our agency, Danny Wall, and our head of supervision, Darrell Dochow. Wall resigned in disgrace and Dochow was demoted and sent back to run the obscure office he had once run in Seattle.

Ms. Story and Ms. Morgenson’s column discusses how an IndyMac manager is defending himself against suit by arguing that Dochow told him to file false financial statements. OTS’ senior leaders knew from my book exactly what they were getting when they promoted Dochow and made him the top (anti) regulator for all the top S&L originators of fraudulent liar’s loans.

This column addresses a more general point, the charge that Obama’s financial regulatory leaders actively oppose the prosecution of elite financial criminals and the regulators who conspired with them (to use the term the article quotes Professor Kane as insisting upon).

“Any financial crisis case that named a regulator probably would turn into a huge political battle, because it would question many of the nontransparent acts that bank regulators take while trying to save banks, said Denise Voigt Crawford, former commissioner of the Texas securities board and now a law professor at Texas Tech University.

In any prosecution of bank regulators, she said, “you’d have the Justice Department in a fight with the policy goals of the Department of Treasury. Particularly in this environment, you know the banking regulators would fight it tooth and nail.”

Some longtime lawyers go further and say the overall scarcity of cases related to the financial crisis might be in part because regulators want to avoid scrutiny of their own kind.

“It’s not just one 30-year-old wunderkind who was responsible for the financial crisis,” said Dennis C. Vacco, who was the New York State attorney general in the 1990s and now is a lawyer at Lippes Mathias Wexler & Friedman. “Once you start pulling the string through in these complex cases, you might be surprised what you find at the other end.”

Mr. Vacco continued: “What’s at the end of the string? The defense may be that ‘at the highest echelons of the financial institutions, we were in regular contact with the government.’”

These charges are exceptionally severe. Senior former regulators are willing to be quoted by name asserting that Obama’s (not Bush’s) financial regulatory leaders are blocking lawsuits against fraudulent financial elites and their anti-regulatory co-conspirators because they fear embarrassment. That would be a disgraceful policy. Indeed, it is hard to think of a worse reason for granting the elite white-collar criminals that caused the crisis and the Great Recession immunity from prosecution. The fact that Obama has no response rebutting this grave charge against his administration’s integrity sounds loud, but not proud.

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      1. monkeybreath

        the president is not done,he has just begun. look at the fools running against him non will stand up to scrutiny. i will argue that this collection of republican misfits has been to designed to give Oblabla a second term since he is giving the establishment what they want. remember the fox news anti clinton crusade even as he was signing off on all the deregulatory bills that caused the conservative heritage foundation to call clinton the greatest deregulator ever. its kabuki time in america

        1. Lambert Strether

          The R clown show wouldn’t be permitted to continue if the dominant factions in the 1% had not already settled on Obama. (This doesn’t imply that long tail events don’t happen in politics; of course they do. 2012, in fact, could end up being quite volatile.) It was the same in 2008, actually. One has only to compare Rove’s 2004 campaign against Kerry with the 2008 campaign against Obama to see that McCain wasn’t really serious. Of course, everybody who mattered, R or D, collected large fees and increased or retained power, so, no harm, no foul. Hate to be cynical…

          1. KnotRP

            I think the Blue/Red team is going to produce a back up candidate out of the Red pool, just to hedge it’s bets.
            You can have any color you like (as long as we supply them).

            I just don’t know that this is going to be a normal
            pedestrian year or election season….sometimes things
            go non-linear in unexpected ways.

          2. Goin' South

            I think that anybody predicting electoral outcomes this year is way smarter than I am. I just listened to a REPUBLICAN 2nd place finisher exalting how the “status quo” was afraid of his “movement.” Not long after, his supporters were including the word “revolution” as part of a longer chant.

            As an abstentionist Anarchist, I see very hopeful signs in this election year. The State is being challenged on so many fronts, most importantly on MIC, that it’s hard to see how the status quo remains. Paul actually talked about the trade-off between Social Security and Empire tonight.

            On the second front, Newt-fucking-Gingrich, along with Texan oil boy, Rick Perry, are attacking the “Venture Capitalist” Romney.

            Place yourself back even 5 years. Could you have predicted that the 2012 American Presidential campaign would focus on debates about MIC and Capitalism? And in the Republican Party?

            If Paul runs as a 3rd party candidate, American electoral politics will be destroyed by the dissonance between the Constitutional solution and the popular choice.

            This year has the potential to be an Anarchist’s dream.

          3. Aquifer

            “One has only to compare Rove’s 2004 campaign against Kerry with the 2008 campaign against Obama to see that McCain wasn’t really serious.”

            Of course one could argue that old poker face, “I’ll fight the war better than you” Kerry was as much of a cipher as McCain. Though there are charges about irreg. in the Ohio vote in ’04 (reminiscent of Fla ’00), supposedly Bush actually got a higher number of the pop. vote which, I do believe, he did not in ’00 …

            TPTB wanted Bush in ’00 and ’04 and Obama in ’08. As long is it is a Dem or a Rep, from TPTB’s perspective, they are interchangeable as the need arises. What TPTB do NOT want is a 3rd party – that is, not until it, too, is sufficiently bought and paid for ….

            You want a change? No way around it – have to go 3rd Party …

        2. AlanK

          your analysis sounds true to me. They WANT (just as they wantED) Obama. He confuses and quiets the critics. He’s the best of all worlds for the oligarchs. His fans follow like sheep; they have gotten so used to our racism and distorted world view that they would close their ears and eyes a thousand Realities, just to be able to say, “We have a black president in the US!” That, my friend, is pathetic.

      2. nonclassical

        I took an entire district to Obama vs. Hillary, who was bought and sold-this is what we GET?? No more Bushbama…no transparency, oversight, accountability,
        for election fraud, war fraud, economic fraud…and Wikileaks shows he cut a deal with Bush-Cheney to NOT do so…

    1. sgt_doom

      Sadly, sleeper’s comment is on target.

      While I appreciate and venerate all of the insightful articles from Mr. Black, corporate criminologist and forensic economist extraordinaire, truth to tell what slight difference there is between Romney of Wall Street, the private bankster, and Obama of Wall Street, who has appointed all those private banksters.

      When fully realizes just how nonexistent any media is today in America, and just how truly dumbed down America has become, when someone like Mitt Romney, whose wealth derives completely from the creation of debt and destruction of jobs (Bain Capital = private equity leveraged buyout, asset stripping, dividend recaps, pumps and dumps, etc.), who any sane person woul think wouldn’t dare show his face in public, yet today is running for the presidency!

      At one time I would declare this to be unbelievable; today it is just par for the course.

      1. KnotRP

        Maybe OWS should stop bothering with pointless police confrontations and tent camping in public spaces, and
        instead figure out an OWS President/VP ticket worth getting
        write-in qualified in all 50 states? Bill Black would
        be worthy of a write-in vote, given the vote will otherwise be wasted on Red/Blue, but it sure would be nice if it actually counted. If the party system is
        damaged beyond repair, maybe the focus should be on working around the damage?

          1. Blunt

            So are Jill Stein and Rocky Anderson. Thinking in terms of three is just a lsight bit different in thinking of two.

            We have two parties because at the beginning there were Republicans and Federalists. Each represented two different types of wealth: 1) agaraian 2) merchant/industrial.

            That moved things along nicely until by 1826 and JQ Adams you had the son of the Federalist president being elected as a Republican with the competition from a couple of agrarians Jackson and Clay.

            Then the Democrats from the party of Jefferson for a term unopposed until the banksters of the time managed to invent the Whigs in opposition to King Andrew I and the agrarians.

            Eventually the Whigs declined and the Republicans were reinvented as a party of banks, railroads, industry & merchants over against the Democrats who were still agrarian.

            There are two parties as there are often two types of wealthy (historically) in USA that often clash. Until one gets subsumed into the other. Then one party temporarily disappears until the elites start battling yet again over what sorts of wealth to privilege.

            Currently we have one of those periods where the parties merge and support the only privilege there is pirate finance and every other form of wealth takes third place and the “people” take very little indeed.

            Actually the best hope seems to me to me multiple political parties that divide the vote unmercifully. I’d like at least five and probably more like ten parties to exist viably and have anywhere from 20-200 Members of Congress each and the Senate to be divided with no party over about 30 votes, 5-10 parties.

            I imagine that would be the perfect scenario for dividing and conquering the 1%. The more the merrier. The more chaotic and in need of coalition the legislative and executive and judiciary branches are divided the better off for those of us who haven’t much wealth at all.

            Just look at the history. The turning point of the past century was when Gompers, although jailed drew huge numbers of votes and that was crushed by the red raids and his own incarceration followed by the “prosperity” created by Wall Street to cover their own taking of the country.

            The morons today are too greedy and vicious to even feel the need to hide their cupidity and crassness.

          2. bmeisen

            I disagree that wealth distribution is a primary determiner of political party counts in the USA. Parties are not established by the Constitution. Technically there is no need for them. Electoral mechanics – more precisely how winners are determined – are the key. Almost all federal elections are won by the candidate with the simple plurality, aka the first past the post. A salient consequence of this arrangement is the 2-party system.

          3. Javelin

            Your history is a little off. There was no Republican party at the begining. Jefferson & Madison formed the Democratic-Republican party in the early 1800’s. It morphed into the pro-slavery Democratic party of the 19th & 20th century. The Republican party was formed by abolitionists in the mid 1800’s in response to the actions of the pro-slavery Democrats.

  1. LeonovaBalletRusse

    William K. Black for Secretary of the Treasury, immediately!

    Why has this great patriot and impeccable Critical Mind not yet a full professor *with bells on* at UMissouriKC? Are their timid academics awaiting the outside offer to tell them the worth of William K. Black to their university and the free world?

    LEON BOTSTEIN, are you listening? Make it a twofer with INET: “The FINAL battle is SWIFT and the lead loses.”

    (see “INNOVATION: The Attacker’s Advantage” [New York, Summit Books, 1986).

    William K. Black 2012: JUSTICE FOR ALL

    1. two beers

      Nice sentiment, but there is no political mechanism no appoint honest and qualified regulators. We live in a financial oligarchy, not a democracy.

      I just finished “Econned,” and my only complaint is with the subtitle: How Unenlightened Self-interest Undermined Democracy And Corrupted Capitalism.

      Capitalism is inherently corrupt; only strong and enforced regulation keeps its worst effects at bay.

      Capitalism and democracy are opposing systems. They are incompatible, in the long run, because wealth will always seek to assert, retain, and augment its power.

      “Unenlightened self-interest” is a distracting tautology, and detracts from the message of the book. Otherwise, I greatly appreciate the book.

      1. F. Beard

        Capitalism is inherently corrupt; two beers

        No it is not unless your definition of “captialism” includes a state supported/enforced private money monopoly.

        I notice the Commies missed the problem too since they had central banks.

          1. F. Beard

            Professor Steve Keen also advocates a universal bailout and leverage restrictions on the banks. Is he a foolish utopian?

            And on this Progressive/liberal site is abolishing the oppression of the poor considered “utopian”?

            Elitest much?

            I see why the population is disgusted with the Left. Some help you are.

        1. two beers

          “Those with the gold make the rules.”

          The wealthy will only submit to controls on their political power when they have a reason to be fearful, or when it’s in their own self-interest to do so.

          1. nowhereman

            NDAA need I say more. If you don’t recognize the current form of government, you are truly lost.

          2. nowhereman

            Indian Jones;
            It is as you demonstrate so adequately, a total lack of understanding which passes for “common” knowledge as taught by the education system and media hype.
            This country has no hope as long as people like you “think” you understand the reality of our current system.
            Did you watch the video? Did you understand it? Are you a moron?

        2. Soullite

          Capitalism is as Capitalism does. You can argue that in theory, it doesn’t have to be corrupt, but that’s a supposition on your part. The Capitalism we all experience and see in the real world is the only one that matters.

        3. JD

          The “commies”, who put Government over The People were as close to Democracy as you Capitalists who claim (still) that your Market murder is better than Government murder.

          Rights come directly to The People. When you set The Market over The People you get the same result as the “commies” gave The People.

          Or, if We put the Government, the Empire, the Market, the Monarchy, the Church, (anything) ahead of “the General Welfare” of “We, the People”, We will always lose.

          1. Indian Jones

            “When you set The Market over The People you get the same result as the “commies” gave The People.”

            The first objection to this that comes to mind: Capitalism makes you stupid. It’s a much more effective religion.

      2. LeonovaBalletRusse

        See ZH today, sizzlin. It’s about going local for C.21. The wheel doth turn. The paradigm for performance of the mature open economy and open democracy has been perfected at by the Open Society Institute-to-Open Society Foundations, doing good works on the ground while you weren’t looking:

        “O Fortuna!” we are well on the road to our dream again: “America: leader of the free world” — leading through the open, self-critical minds of our leading citizens: William K. Black, George Soros, Susan Webber/Yves Smith.

        Freedom of speech and of the press is the sine qua non of democracy. With many thanks to Yves/Susan and other patriots, our time finally has come. Can we bear the excitement of being *citizens making history together*?

        1. ex-PFC Chuck

          . . leading through the open, self-critical minds of our leading citizens: William K. Black, George Soros, Susan Webber/Yves Smith.

          Don’t forget Larry Lessig, author of the recently published (October, 2011) Republic, Lost: How Money Corrupts Congress – and a Plan to Stop It. This is the “Must Read” of our time. His development and nuanced analysis of what he calls “Dependence Corruption” takes up the first three quarters of the book and is masterful. In the last portion he formulates several alternative ways to defeat it, but readily admits that odds are against all of them. In the presentation of his last, and preferred alternative, a Constitutional Convention, he went a long way to assuaging my fears that such a body might get out of control and throw out the good with the bad. He closes with the passionate admonition that we can’t give up.

          1. LeonovaBalletRusse

            ex-PFC, there are so many great citizen-patriots among us, perhaps just lately coming together. My short list here is exceedingly short, I realize, and I have a much longer one. I have no doubt that all of the names of our freedom-loving leaders will be revealed in time, as We the People show what it means to live freely, with daring, in “The land of the free and the home of the brave.”

  2. Frank Speaking

    “…but it is now clear that the administration does not contest the charge.”

    it is horse race season and everyone is suitably diverted wondering if they will be on the street next month, if there is anything for supper tonight, or if there will be enough gas in the car tomorrow to get little Suzy to the ER if her fever doesn’t break tonight.

    everyone is on their best behavior not to provoke the head of the household who is still on the traditional holiday bender.

  3. off_leash

    I look for the Republican candidate to use this issue as a weapon during the campaign. When Obama is behind in the polls in the weeks leading up to the election, you can bet there will be a whole slew of indictments. Once the election is over the cases will slowly die of neglect regardless of who wins.

  4. Hugh

    All this is a feature not a bug. The regulators were selected by the politicians precisely for their willingness to bend over backwards for the banks and for their lack of interest in regulating. Now the politicians who are owned by the banksters are covering up these arrangements not to avoid embarrassing the regulators, or even themselves, but to protect the banksters.

  5. F. Beard

    Banking is INHERENTLY dishonest and unstable. Reducing the risk would mean fewer loans for the poor (ie “red-lining”).

    Progressives just won’t let go of the magic of “credit” whereby they think they borrow from the future (impossible) but instead steal from the poor and other non-borrowers today.

  6. omnivore

    The Nov. Morgenson and Story articles has 101 comments on the NYT site. Yesterday’s story on security at the hospital where Beyonce gave birth has well over 400 comments. There doesn’t have to be much of a cover up because no one is watching and no one cares (except the frustrated folks who hang out at this and similar blogs). Inaction alone will get the administration the results it wants.

    1. ECON

      You have it right-on! The channel changer takes you away from reality and substantive to the carnival-circus that passes for “the news”.

  7. Frank in midtown

    The marketplace of ideas seems to be yelling jobs, jobs, jobs. That means in“the Justice Department in a fight with the policy goals of the Department of Treasury” that the Treasury wins. Keep working on getting the marketplace of ideas to yell enforcement, enforcement, enforcement and maybe we will see some shift toward the Justice Department.

    1. DachsieLady

      Thank you for mentioning enforcement. That is THE big missing ingredient in all of our laws. If there is any enforcment at all, it is selective corrupt enforcement.

  8. Westcoastliberal

    I have the utmost respect for Prof Black, but c’mon guys & gals, Geithner has as much as admitted why there have been no indictments or prosecutions of the big fish…“While we are confident that the steps we have laid out follow the right path, haste would be counterproductive – possibly destabilizing the housing finance market or even disrupting the broader recovery.” In other words, the economy is still very fragile and even one major fraud charge could collapse it.

    1. LeonovaBalletRusse

      Westcoast, who was it that tried to warn Louis XVI and Marie Antoinette? Who was it that tried to warn Nicholas and Alexandra? Did they pay heed?

    2. Frank Speaking

      “…could collapse it…”


      if this ain’t collapse I don’t know WTF is!!!!!

      Now you are going to add INSULT to injury?

      At times like this we turn to Lewis Carroll—”The Queen had only one way of settling all difficulties, great or small. ‘Off with his head!’ she said, without even looking round.”

      Off with their heads in FFFFing deed!

    3. JEHR

      No, you have that backwards: no prosecutions will collapse the economy. What’s the economy doing right now?

    4. Francois T

      “In other words, the economy is still very fragile and even one major fraud charge could collapse it.”

      This statement is so phony, it is a total insult to common sense. Like an immense country such as the USA would suffer a collapse of its economy because one of several banksters would see justice…FMP!!

      Geithner is there strictly to protect the banksters while making sure Obama will do the “right things” for them, the rest of us be damned.

  9. Malcolm MacLeod,MD

    We have all realized for some time that our government is
    corrupt and largely controlled by financial and corporate
    interests. The problem remains that we see no solutions
    for the near future. The government will not self-correct.

    1. two beers

      Of course the government will not self-correct. The oligarchs and their servants in govt are having too much fun rampaging and pillaging through the collapse of western democracy. The system is broken beyond repair; there are no band-aids or fixes.

      It’s too late to restore Glass-Steagall, for example, or tostart regulating derivatives. The damage is done, and can’t simply be reversed by prosecuting the fraudulent banksters (of course, they should be prosecuted, anyways. but they won’t be).

      The system races towards collapse under the weight of its own moral hazard. What will happen after deserves consideration…

        1. Invient

          Self-correction implies the intent of the system to fix itself, I.e. a intended action usually a reaction to a balance of negative and positive feedbacks.

          It is hard to argue a system self-correcting by collapse. I know of no system designed to intentionally terminate.

          1. Indian Jones

            “I know of no system designed to intentionally terminate.”

            Jesus! You never heard of a bomb?

  10. Up the Ante

    “Senior former regulators are willing to be quoted by name asserting that Obama’s (not Bush’s) financial regulatory leaders are blocking lawsuits against fraudulent financial elites and their anti-regulatory co-conspirators ..”

    And Mr. Black, surely you have some comment on why those leaders did not initiate lawsuits during Bush’s final years ?

    “The fact that Obama has no response rebutting this grave charge against his administration’s integrity sounds loud, but not proud. ”

    Loud, yet drowned out by the noisefest arising from Louis Freeh’s camp as he defends Corzine, one of THE principal authors of Sarbanes-Oxley.

    Surely we do more than bait ?

    1. LeonovaBalletRusse

      Up, place Louis Freeh within the Bush Dynasty frame in:
      “AMERICAN DYNASTY: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush” by Kevin Phillips, who left in time (New York, VIKING, 2004). Search the Index, read also the Appendices, and connect the dots to the Grifter Conspirators for Asset-Stripping of Americans through energy manipulation (Enron), the S&L scandal, and “endless war.”

      Just out: “Gitmo: Then and Now” by Larry Siems at

      see YouTube for the reports of Architects and Physicists on what really happened on 9/11. (many sites, such as

      Cry Treason! File “The Tyrannicide Brief” to free ourselves from tyranny.

      1. Up the Ante

        There seems to be some reticence in calling out specific individuals involved in obvious frauds during Bush’s terms.

        “.. on what really happened on 9/11. ”

        Has Leonova ever looked into the Joint Surveillance System? It’s about air traffic control and air defense of U.S. territory.

        Perhaps if Leonova or another asks questions about it I’ll clue you in.

        Otherwise, yup, more baitin’s going on.

        1. LeonovaBalletRusse


          “TOP SECRET AMERICA: The Rise of the New American Security State by Dana Priest and William M. Arkin (New York, Little, Brown and Company, 2011).

          1. Up the Ante

            Is Leonova really trying to tell me you have no interest in the Joint Surveillance System ?

            It’s the smoking gun.

            With DCSnet, yes, security state.

      2. Jeff

        Don’t forget Russ Baker’s “Family of Secrets”. It traces the Bush dynasty back to to Poppy Bush’s daddy and on through W. Heavily footnoted and unimpeachable references.

    2. Up the Ante

      more Freeh antics, courtesy of,

      MF Global Holdings Trustee Freeh Seeks Priority for Creditors

      By Tiffany Kary
      Jan. 10 (Bloomberg) — MF Global Holdings Ltd.’s Chapter 11
      Trustee Louis Freeh is seeking to enforce the rights of
      creditors, saying they shouldn’t have their funds diverted to customers of the firm’s failed broker-dealer unit, according to court papers filed yesterday in New York.

      Talk about stepping on the farmers’ toes. They don’t forget.

  11. Historicaecon

    I hate to use the word conspiracy, but what else can this be? It would almost be comforting to find out that the collusion between financial elites and federal regulators was a deliberate plot for self enrichment. That would suggest, at least, that IF the system functioned correctly we might have better outcomes. If it is not a conspiracy, then the system itself is broken and good outcomes won’t be possible without the kind of reforms that look increasingly unlikely. Some serious thinking needs to be done about alternatives. That thinking needs to be preserved and institutionalized so that when another crisis comes there is a fully developed alternative to this nonsense.

    1. Indian Jones

      Good to see your inoculation is wearing off. Another interpretation: “The system” always had to exclude it’s victims & now it is easier to do so.

      The conspirators used to be more loosely affiliated. The circle shrinks. What is your radius for “conspiracy”?

        1. LeonovaBalletRusse

          Indian, my comment re “welcome to America was meant for Historica…”

          Mystery solved.

          1. Rex

            You said, “Welcome to reality, Indian Jones.”

            How can that be interpreted as, “meant for Historica”?

            I couldn’t figure out what you guys were on about, anyway, but that last strangeness was too much to pass up.

  12. brian

    it has always been about Obama wanting to join the club

    from jesse

    “Anyone who has seriously studied applied macroeconomics knows that crony capitalists hate free markets, with all the fairness and transparency that they imply. Competition is a serious drag on enormous profits and introduces significant uncertainty and risk.

    As soon as the game is underway, successful capitalists are constantly pushing the envelope of the rules, seeking to establish rents, monopolies, unfair advantages, and debt traps to snare the bulk of the players and stifle the profit-eroding tendency of real competition.

    The ‘efficient markets’ hypothesis and the denigration of regulation serves to despoil markets of their capacity to create wealth and distribute it in a meritorious fashion.

    This is the basis of all aristocracies, which are merely the institutionalisation of privilege. Once they make it they bloody well want to change the rules to hang on to it, and take the risk out of their equation. They foster a culture of two sets of books, two sets of rules, and two systems of justice. They are given over in their personal and professional lives to the benefits of hypocrisy and cheating, with little conscience to restrain them. There is a predatory class that is nationless, without allegiance to anything, any principle, but their own greed and lust for power.

    “The wealthy, not only by private fraud but also by common laws, do every day pluck and snatch away from the people some part of their daily living. Therefore, when I consider and weigh in my mind these commonwealths which nowadays do flourish, I perceive nothing but a certain conspiracy of rich men in procuring their own commodities under the name and authority of the commonwealth.

    They invent and devise all means and crafts, first how to keep safely without fear of losing that which they have unjustly gathered together, and next how to hire and abuse the work and labor of the people for as little money and effort as possible.”

    Thomas More, Utopia

    This failing is not particular to capitalism per se, but to any human system. So why not just dispense with rules and let the market have its way? If the system is so much work to maintain and keep free of corruption, why have any system at all?

    THOMAS MORE What would you do? Cut a great road through the law to get after the Devil?

    WILLIAM ROPER I’d cut down every law in England to do that!

    THOMAS MORE Oh? And when the last law was down, and the Devil turned round on you, where would you hide, Roper, the laws all being flat?

    This country’s planted thick with laws from coast to coast, man’s laws, not God’s, and if you cut them down, and you’re just the man to do it, do you really think you could stand upright in the winds that would blow then?

    Robert Bolt, A Man For All Seasons

    Anyone who thinks human systems function naturally well without rules and enforcement has never driven on a modern motorway in rush hour. To support this theory they must believe in the natural goodness and rationality of all people when motivated by self interest, which is the biggest sucker bet in history.

    And when crime pays, it becomes prevalent. Bad behaviour that on the whole succeeds drives out the good, making it impractical. This is the lesson of the recent financial crisis.

    Good government takes hard work and constant renewal and reform. Human systems do not maintain themselves, and are almost never self-improving, but rather given to entropy, manipulation, and deterioration.

    But there are plenty of economists, authors, and editorialists who are willing to say for pay, to talk their own or someone’s book, since there is little accountability for promoting quack thoughts, as there are for quack medicines that kill.

    Merit works, but Privilege pays. And so the one continually undermines the other unless some restraint is applied. And that is the purpose of society and the law in the service of freedom.”

    1. LeonovaBalletRusse

      brian, seriously, it works just like the Boston Club in New Orleans: critics are co-opted through dynastic marriages or simple admittance into the club, if you have the power or money to cause them harm. Once in, the Chump agrees that his captors are *God’s gift*. The Stockholm syndrome at work.

      Still no women or people of color, however; and if any Jews are in, they are crypto and insecure-panting-to-be-included, just like Oreobama as he joins the Club of Lifetime Sinecure in Clover at the People’s expense.

      Oreobama thinks he’s a winner. Really. Uncle Tom lives on.

      1. Up the Ante

        I am still brought to a chuckle to this day by the political cartoon of Michelle Obama dressed in camo w/her AK-47 when he was a candidate.

        And how many times have the cartoonists taken the day ?

    2. Indian Jones

      “And that is the purpose of society and the law in the service of freedom.” Huh? The purpose of society is the regulated contest between merit and privilege in pursuit of freedom?

      Blather and bluster. The earth can only tolerate so much profit and freedom until her judgment comes.

      “[… of] these commonwealths which nowadays do flourish, I perceive nothing but a certain conspiracy of rich men in procuring their own commodities under the name and authority of the commonwealth.”
      And so, for a time, it was imagined that the bourgeois conspiracy, under the authority of capitalism, was the means of escape from this subterfuge. No longer.

    3. j.grmwd

      Thanks Brian, that passage from “A Man For All Seasons” goes straight into my list of favorite quotes.

      1. Up the Ante

        ” THOMAS MORE What would you do? Cut a great road through the law to get after the Devil? ”

        Sarb-Ox was ‘sposed to be the paved road to get at him.

        How forgetful of me, Corzine was the author of it so he can break it if he chooses ? pulling U.S. Attorneys from his hip pocket, Banana-style ?

        Indian Jones’ quote above you is as good.

  13. jsmith

    Seriously, Mr. Black, how can you expect any partially intelligent reader of your words to believe that such a savvy individual as yourself could actually be surprised? upset? angry? disappointed? by any action taken by the Obama administration at this stage of the game?

    I mean really.

    After all that’s transpired and occurred over just the last 12 years concerning illegality in this country, the seeming ability of pundits/commentators to retain the levels of outrage they oft express really begins to smack of affectation at best, shilling at worst.

    Hopefully, it’s just a case of not seeing the forest for the trees amongst the professional classes but after a certain point it begins to defie belief that anyone privy to the details of the litany of systematic crimes we as American have witnessed can somehow hold out hope for said system to rectify the situation.

    Look, Obama has just recently given himself the power to assassinate and detain American citizens witout trial and you, Mr. Black – somehow – are nonplussed that the big O is further aiding and abetting those in the criminal class by not bringing trials/pressing charges?!

    The above really points to what ails this country.

    The American propganda system is set up in order to provide for the continual amusement of the masses, to keep them constantly involved in whatever they choose to follow: football, American Idol, the Kardashians, politics, the economy etc etc.

    All as long as everyone stays within the confines of the established system and doesn’t question the foundations upon which the systems rests, you’re free to talk about whatever you’d like.

    One might think that discussions about the criminality of our leaders would be troublesome.

    But one might also think our leaders actually care about what we think.

    9/11 and the Iraq War were truly watershed moments in the US as those events fully encapsulated and foretold our new rule by an elite who would no longer be bound by traditional rules of “governing by consent”.

    Whatever laws can’t be rewritten or annulled will be ignored.

    This has been the overt MO of our rulers for the last 12 years, Mr. Black, and it really is high time that the best and brightest among us consistenly begin to address this problem.

    Not through an daily detailed examination of the outrage du jour but through a sustained discusssion for the need to end the system we and the world are suffering under.

    1. LeonovaBalletRusse

      jsmith, the public revolt against the Viet Nam war also was sudden.

      Things can change “in the blink of an eye” as has been claimed.

    2. Indian Jones

      The US didn’t start with full suffrage and it doesn’t intend to foster it, either.

      One day the excluded must be called upon but because they’ve been excluded they don’t respond. Myths and pageantry were not enough.

      The enduring capitalist party must come to an end. This neo-feudal replacement won’t suffice for those who can’t be neocons. But as you can see, the “corruption” is their power, and they won’t relinquish that.

      Capitalism was always corrupt and had no future.

        1. Indian Jones

          Capitalism is that which is practiced by capitalists, comrade.

          Y’all did a piss-poor job of stopping this monstrosity from developing. I don’t think you’ll get a second shot at your fairy-tale versions.

          1. F. Beard

            The monster was created by state supported banking which numerous famous men have warned us about and which ONLY the libertarians seem to wish to abolish.

          2. Indian Jones

            Libertarianism is the final fantasy. Despite the unacknowledged history of the conjugal relation of State and Capital, the libertarians would smash the State to liberate the ultimate potential of olympic, Randian Capitalist.

            Unadulterated manure.

            Capitalism without banking is impossible.
            Banking inside the state you can’t trust.


          3. F. Beard

            The monsters was created by a bankster-owned state. Lambert Strether

            Ah yes. Going back to Hamiliton, our first Secretary of the Treasury.

            “Of, by and for the bankers.”

            Question? Do bankers jump out of windows because of their losses or because they realize the damage they have done?

          4. F. Beard

            Despite the unacknowledged history of the conjugal relation of State and Capital, the libertarians would smash the State to liberate the ultimate potential of olympic, Randian Capitalist. Indian Jones

            The joke then is on the Randians since only government privilege (by fiat LOL!) would ever make gold a serious money candidate.

            Capitalism without banking is impossible. Indian Jones

            Not so. Common stock is a throughly sensible and ethical private money form that “shares” wealth rather than reaps it. But so long as state supported counterfeing exists, we have a “Tragedy of the Commons” situation.

            Banking inside the state you can’t trust. Indian Jones

            Yep. The gold bugs need a State to proclaim that their shiny metal is money.

            Checkmate. Indian Jones

            Of the Randians.

          5. Indian Jones

            Common stock? Nonsense.

            Not standardized & unreliable.
            Easily diluted.
            Easily counterfeited.
            Unmanagable and unregulatable.

            Spare me.

          6. F. Beard

            Common stock? Nonsense. Indian Jones

            Common stock as money requires no usury, no fractional reserves and no PMs. It is an ideal private money form that “shares” wealth and power.

            Not standardized & unreliable. Indian Jones

            Then just use the government’s fiat for all purposes, not just taxes and government fees. As for unreliable, much of the volitality of common stock (and other assets) is a result of the government enforced/backed counterfeiting cartel, the banking system. Look at housing costs, for example.

            Easily diluted. Indian Jones

            Corporations are very reluctant to dilute their stock. In fact, they use low interest rates from the counterfeiting cartel to concentate their stock with buybacks.

            Easily counterfeited. Indian Jones

            Now you’re reaching.

            Unmanagable and unregulatable. Indian Jones

            Most people would continue to use fiat for all debts IF the government’s fiat was well managed and not used, to say, bailout banks.

            Spare me. Indian Jones

            Don’t like to “share”? :)

          7. Indian Jones

            The FED is not a cartel. Lending under capitalism requires usury. Unreliability /= volatility. Preferred stock is one preferred dilution. Stock buyback is not driven by anti-dilution, it’s mostly price manipulation/insider trading.

            I’ll not choose between distributed corruption and concentrated corruption, TYVM. The Market is no substitute for Government.

          8. F. Beard

            The FED is not a cartel. IJ

            I never said it was. It is the lender of last resort that the banking cartel needs.

            Lending under capitalism requires usury. IJ

            Common stock is spent, not lent into circulation.

            Unreliability /= volatility. IJ

            Then be more explicit.

            Preferred stock is one preferred dilution. IJ

            Preferred stock is a form of (perpetual) debt where the dividend is the interest. It dilutes ownership but not control since preferred stock cannot vote.

            Stock buyback is not driven by anti-dilution, it’s mostly price manipulation/insider trading. IJ

            A quibble. Dilution = lower price; anti-dilution = higher price. Stock buybacks mask (temporarily) lack of performance with the cash or debt used to fund them.

            I’ll not choose between distributed corruption and concentrated corruption, TYVM. IJ

            Common stock is a democratic form of money. Since labor is the highest business cost then over time it should be expected that the power of labor will increase.

            The Market is no substitute for Government. IJ

            I did not say it was. We need both.

          9. Skippy


            “Since labor is the highest business cost then over time it should be expected that the power of labor will increase.” – beard.

            NO / False, even if you factor in legacy costs, its just the easiest to manipulate. BTW maybe we could use personnel instead of labor (seems the christian thing to do…eh). Anyway, flexibility-oriented legal contracts with production personnel or quasi-fixed administrative personnel (and of other indirect labor) are just the stuffies when businesses try to fix down the road costs.

            Raw materials – V, Semi-manufactured components – V, Plant rent – F, Amortization of capital goods – F, Distribution cost – F -v, Discretionary cost – Marketing – F. Energy – F -v. Hard or prolonged bargaining here, so, its stuff the personnel.

            BTW Yves debunked the overseas cheap personnel theory and I would add its the same – same within the USA, it only works relative to stock price et al and only for a short time ( self defeating in the long run – save the looters ).

            Skippy… common stock = alternative low grade currency, stop putting makeup on it. Tens of thousands, of currency’s = epidemic fraud, its in the history books… gezzz. The exchange rates alone arrgh! Its bloody ludicrous.

            PS. back ground in the actual world of business[?] beard, as fooked up as it is.

          10. F. Beard


            Well, the counterfeiting cartel, the overwhelmingly dominant source of finance has to go. It is dishonest, unethical and unstable. It killed 50-86 million in WWII alone. Will ye defend that if only the “right people” (ie. the Left) are in charge? Wasn’t that tried in the Soviet Union?

            So then, with the counterfeiting cartel abolished, how will business and industry be financed? Government subsidies (corruption prone, discriminatory and often midirected – see windmills)? Government loans (corruption prone and discriminatory)? Savings earned (time consuming) or borrowed at high interest rates (expensive)?

            But you oppose common stock as money even though it is democratic, decentralized and requires no usury and “shares” wealth and power?

            Also, you keep ignoring that the use of private currencies is OPTIONAL for the payment of private debts. Fiat could be used for private debts as well and MOST people would choose fiat for all debts IF the government did not waste it bailing out the banks, for instance.

          11. F. Beard

            common stock = alternative low grade currency, … skippy

            Like I said, most people would continue to use fiat for all debts IF the government mananged it wisely. The availabiliy of private money alternatives would encourage that wise management or do you think fiat needs captive customers? It doesn’t. Taxes must be paid in fiat; that is all the backing it needs.

          12. Skippy


            Your usage of democracy is lipstick as it should be the peoples money to start with, private issuance is not[!] a form of democracy. And it could down the road lead to even a worse set of affairs than present to day ( shudder ).

            “Like I said, most people would continue to use fiat for all debts IF the government mananged it wisely.” – Beard

            Here is the bedrock of your arguments – Government – yep sure, but, you always seem to negate the private sector has been the prevailing force in bad societal out comes, again history ( references and hard data upon request ). An informed electorate, term limits, repeal of corporate person hood, true costing of activity, dismantling of power consolidation and defining value other than profit within a society.

            Skippy… a new ethos is in order, the meaning of humanity? Maybe we should slow down till we dial that bit of data in better, methinks.

          13. Indian Jones

            The aristocracy of capital is a criminal’s concept. It’s tough to break free of these mind-f*cks; let us toast those who warned us long ago.

            Prost, comrades.

          14. F. Beard

            Your usage of democracy is lipstick as it should be the peoples money to start with, private issuance is not[!] a form of democracy skippy

            Actually, money creation was once considered a FUNDAMENTAL human right, at least in the US.

            You fail to see that any money monopoly you create (except fiat for government debts, which should be a monopoly) is a single failure point for the economy and freedom (See “666” in the Book of Revelation for confirmation in extremus). More mundane example: How on earth will the government adjust the strength of the currency? Too strong and exports suffer, too weak and imports suffer.

            Paradoxically, when Christ sets up His Kingdom, we will have the best available rulers but until then we had best trust in principled division of power and decentralization. And even after Christ sets up His Kingdom, I expect it will be quite libertarian and decentralized. No tyrant is He.

          15. F. Beard

            The aristocracy of capital is a criminal’s concept. IJ

            We ALL have capital if only our labor and skills.

            What the bankers have secured is a MONEY MONOPOLY, not a CAPITAL MONOPOLY.

            That money monopoly should be abolished so true capital can be free.

          16. Indian Jones

            Money is not Capital? Au contraire. Money is the purest form of capital, the most facile means of denying others the exercise of their will.

            Our fractured dystopia is capitalism’s vintage. Your desperate redefinition of capital will neither spare us this poison nor stop it’s brew.

            Capitalism poisons everyone.

          17. F. Beard

            Money is the purest form of capital, IJ

            What are you a gold bug too? Some Commies were, you know. Silly materialists.

            Money today is debt to a counterfeiting cartel with the FED as the head. That cartel can and should be abolished and the population (equally) bailed out of all debt to it.

          18. Indian Jones

            “the population (equally) bailed out of all debt to it.”

            Are you sure you don’t have a bankster radio buried in your noggin?

          19. Skippy

            “Paradoxically, when Christ sets up His Kingdom” – Beard

            Duoooood, its been just around the corner for yonks and the olds thought they had their man, we know how that story ended. He wrote a best seller and it is the only reason we know anything about it all!

            Skippy… some folks thought derivatives were the path to untold well being too, oh well… sigh.

          20. F. Beard

            Are you sure you don’t have a bankster radio buried in your noggin? IJ

            Pretty sure I don’t since I aim to destroy banking. But yes, a bailout of the population would fix everyone including the bankers from the bottom up.

            But imagine the anguish the bankers would feel when they were forbidden by law to leverage those huge new reserves!

          21. F. Beard

            Duoooood, its been just around the corner for yonks and the olds thought they had their man, we know how that story ended. skippy

            Dude, do you think we can have WW III and it WON’T be the END?!

            But hey, let’s not let the End come just because we can’t obey “Thou shalt not steal”. At least Troy was destroyed over a woman …

          22. Skippy


            Too – Live – is to – Steal – from something or someone.

            Deception is the strongest political force on the planet. – IOTBP.

            Skippy… or as I put it… Belief is raped on the event horizon with impunity. BTW per another comment by yourself ” you’ll put me in a camp” hay, memo to yourself… you already have… self inflicted… stop playing the victim…eh.

          23. Skippy

            @Beard par dux,

            Banks are just an extension of previous control mechanisms, what dogma – gnostic savagery they employ to justify said control is… only a matter of imagery.

            For you to espouse biblical utterance crying malfeasance at a construct of central control ( Government – banks ) is absurd, your a monotheist.

            Malachi 3:10

            Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the LORD Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.”

            It is a bold step of faith to start tithing. Cynics sometimes argue that tithing is not required in the New Testament. I actually agree, since our salvation is no longer based on works, but on faith in Jesus. But there is no escaping the truth that tithing opens the door for blessing that can not be opened without doing it. From my own personal tithing experience, I can attest that I am so overwhelmingly convinced beyond any shadow of a doubt that tithing increases blessing, that I will never live any other way.


            Ummmm? Whom is a bank now? How credit worthy are ye… spiritual FICO? Which bank should I deposit with… eh.

            Note: This is not a complete list, but aims to provide a comprehensible overview of the diversity among denominations of Christianity. As there are reported to be approximately 38,000 Christian denominations,[2] many of which cannot be verified to be significant, only those denominations with Wikipedia articles will be listed in order to ensure that all entries on this list are notable and verifiable.


            Holy crap where to deposit my toil, 38,000 branches, material disclosure[?], where did I sign a contract, availability of CDS on this CDO ( Christan debt option ).. if Gawd defaults, whom is the counter party, to whom do I owe the debt of life too? Oh my lawyer is a man of the cloth, conflict of interest?

            The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank “bench, counter”. Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths.[5]

            One of the oldest items found showing money-changing activity is a silver Greek drachm coin from ancient Hellenic colony Trapezus on the Black Sea, modern Trabzon, c. 350–325 BC, presented in the British Museum in London. The coin shows a banker’s table (trapeza) laden with coins, a pun on the name of the city. In fact, even today in Modern Greek the word Trapeza (Τράπεζα) means both a table and a bank.


            Are you getting it yet, were all banks, if you have a table, cloth and coinage, metaphorical or physical and conduct exchanges with negotiable instruments, physical or metaphysical… you steal from others in your parlance…. usury!

            Skippy… at the end of the day beard we eat – consume each other and every other thing living or inert. I offer myself up for a small bite ( all living things ) if it gets us all down the road, even if we disagree, till we know, can a pact be made till then?



          24. Indian Jones

            Too – Live – is to – Steal – from something or someone.


            at the end of the day beard we eat – consume each other and every other thing living or inert.

            Bullshit, nihilistic capitalist apologia. Leave the kid alone.

          25. Skippy

            @Indian Jones,

            “Banks are just an extension of previous control mechanisms, what dogma – gnostic savagery they employ to justify said control is… only a matter of imagery.” – skippy

            Not a very capitalistic comment… eh, so lets not paint with ideological brushes. Unless the individual makes a claim to a specific mental pigment.

            Moving onto : Nihilism is also a characteristic that has been ascribed to time periods: for example, Jean Baudrillard and others have called postmodernity a nihilistic epoch,[4] and some Christian theologians and figures of religious authority have asserted that postmodernity[5] and many aspects of modernity[3] represent a rejection of theism, and that rejection of their theistic doctrine entails nihilism.


            And there we have it[!], “rejection of their theistic doctrine entails nihilism.” WOW… too have the power… to assign such labels… arbitrarily, whence issuance is from a crack in the ground, booming voices from above, tuning in Tokyo, or stuff set on fire. All usually occurring in some extended desert hiatus, staring at objects for long periods or during a great calamity with death on the door step thingy. You know… when people are at the height of their mental ability… you know the stuff of PTSD.

            Anyway its a nice segway into:

            Certainty series:


            Certainty can be defined as either:

            perfect knowledge that has total security from error, or
            the mental state of being without doubt

            Objectively defined, certainty is total continuity and validity of all foundational inquiry, to the highest degree of precision. Something is certain only if no skepticism can occur. Philosophy (at least historical Cartesian philosophy) seeks this state.[citation needed]

            It is widely held that certainty about the real world is a failed historical enterprise (that is, beyond deductive truths, tautology, etc.).[1] This is in large part due to the power of David Hume’s problem of induction. Physicist Carlo Rovelli adds that certainty, in real life, is useless or often damaging (the idea is that “total security from error” is impossible in practice, and a complete “lack of doubt” is undesirable).[2]


            Skepticism has many definitions, but generally refers to any questioning attitude towards knowledge, facts, or opinions/beliefs stated as facts,[1] or doubt regarding claims that are taken for granted elsewhere.[2] The word may characterise a position on a single matter, as in the case of religious skepticism, which is “doubt concerning basic religious principles (such as immortality, providence, and revelation)”,[3] but philosophical skepticism is an overall approach that requires all information to be well supported by evidence.[4] Skeptics may even doubt the reliability of their own senses.[5] Classical philosophical skepticism derives from the ‘Skeptikoi’, a school who “asserted nothing”.[6] Adherents of Pyrrhonism, for instance, suspend judgment in investigations.[7]


            Belief is the psychological state in which an individual holds a proposition or premise to be true.[1]


            Anywho… I try to be all, at the same time, sans belief.

            “Leave the kid alone.” – Indian Jones

            He’s no kid, by self admission. One can engage or disengage, personal choice. Although I would point out repetitive regurgitation, dismissal of material fact, and selectively changing tack to avoid clarification – cloud the specific point of order, is a deceptive ploy and is a poor substitute for factual debate. Heck, a Higgs boson particle is an easier task to nail down. Additionally I offer myself up for small bites, where beard wants freedom[?] first and foremost, above all other considerations. Personally I’m for survival of *our species* and as many that we can bring with us. Beard and ilk want everyone on their knees, before their Gwad.. full stop. Ultimate tyranny anyone? Barf.

            No sacred cows please.

            Skippy… I would invoke “Mistakes are, after all, the foundations of truth, and if a man does not know what a thing is, it is at least an increase in knowledge if he knows what it is not.” – Carl Jung


            “Compatibility means deliberately repeating other people’s mistakes.” – David John Wheeler

          26. Skippy

            @beard and IJ,

            The fate of the other two boats was even more horrendous. They were also separated by a storm, and one boat and its inhabitants were never found. On the vessel commanded by Captain George Pollard, they ran out of dead companions to eat. On February 1, Pollard’s crew demanded that they draw straws to see which one would be sacrificed in order to feed the others. The captain resisted, but he finally realized they had no other choice. The short straw was drawn by Pollard’s seventeen-year-old cousin, Owen Coffin. The boy was shot by the man who drew the second-shortest straw, Charles Ramsdell. Pollard and Ramsdell were rescued by the whaler, Dauphin, on February 23, 1821. In all, there were five survivors from the three small boats, and seven men had been eaten.

            Okay, all this is very interesting, but what does it have to do with Herman Melville and Moby Dick? As you can imagine, the terrifying experience had a profound effect on the survivors, especially Owen Chase. He suffered severe headaches and constant nightmares, and he secretly horded food. Later the same year in which he was rescued, Chase published Narrative of the Most Extra-Ordinary and Distressing Shipwreck of the Whaleship Essex. After writing the account, Chase’s mental conditioned worsened, and he was finally institutionalized. In 1841, young Herman Melville signed onto the whaling ship, the Acushnet. During a gam – a meeting of boats at sea – Melville met William Chase, Owen’s son. William loaned Melville a copy of his father’s narrative, and the rest is history.



            Look into the court case resulting from these acts, whom presided over them, whom the ships owners were, heck the hole industrial – political – religious – geographic – slice of Americana this episode so illuminates.

            Skippy… why think, when its easier to fall into a book[s – few, cracker jack history… rats in the attic.

          27. Indian Jones

            Yes, comrade Skippy, and neither are you an apologist. However, to subvert a would-be authoritarian by normalizing theft, well, that’s perverse, wouldn’t you say?

            Don’t know where Beard said he wasn’t a kid (I don’t read all his crap). Even if he seems to have a little too much knowledge for a bright kid, he’s still got that fundamentalist retardation. Just giving him the benefit of the doubt and praying for his personal apocalypse. However, after seeing this,

            even after Christ sets up His Kingdom, I expect it will be quite libertarian and decentralized. No tyrant is He.

            I’d just just as well have him go to …

            I found it amusing you avoided rejecting “bullshit”. If only you could lay off the praise of theft, I’d be chuckling.

          28. Skippy

            “I found it amusing you avoided rejecting “bullshit”.” – IJ

            Apology’s… more often than not, are meaningless… change in behavior is what is required ( that is the direction I’m constantly moving toward ). Everything else is mental masturbation.

            Theft um, biology is funny that way. Do plants have legal recourse, ecosystems, species other than homo, da planet?

            BTW this is not *my construct* ( was born into thingy ), factual information is rare as hens teeth, time to discovery, and information asymmetry is a biatch… eh. The dead will testify to that observation methinks.

            Anywho I feel ya, that’s something in my book.

            Skippy… libertarians just have bad impulse control… see OCD, screening is helpful.

          29. Skippy

            “OK. But do you make chlorophyll?” – “You can do better, comrade Skippy.” – IJ – You do tease and profiling is fun… eh.

            1. as we disperse seed or stem… yeah. Although the reasons for this activity should be better defined.

            2. Comrade – nay… only human. Branding is for ownership rational – ology – ism – pidgin hole thangy. The data is inconclusive as yet.

            Lots of distant thunder out there, whats a body too do? Run ( preppers / nice re – branding ), put camo on, convert ( ye can always revert), put offerings on the alter, play insane, be interesting (but not threatening), multiple identity cards?

            Btw where is the manufactures instruction booklet, in poorly translated english, to assist in assembly and validate online warranty conditions[?], is there an iapp for this?

            Skippy… Terms and definitions sorely need an up grade… methinks. Comrade, Taliban, Bomb, al-Qaeda, OTHERS, non – conforming, yati da da, red flag paranoia… shezz.

      1. tom allen

        Look, we need capitalists (I am one!) just like we need the intestinal parasites that live in our guts. The problem comes when they overreach their bounds — they’re unregulated — and cause explosive diarrhea, which can in the worst case be fatal, and in the best case just tremendously embarrassing.

        That’s why we need socialists (I am one too!) to clean things up. Oy, what a mess. :-(

        1. Indian Jones

          Capitalists are parasitic; the intestinal flora is symbiotic. Your confusion is due to capitalist propaganda which has delivered us to this station.

          Can you say, Stockholm syndrome?

    3. Aquifer

      “how can you expect any partially intelligent reader of your words to believe that such a savvy individual as yourself could actually be surprised? upset? angry? disappointed? by any action taken by the Obama administration at this stage of the game?”

      You are correct, IMO, to express incredulity that any “partially intelligent reader” could be “surprised” or even “disappointed” (insofar as “disappointment” implies unmet expectations) at this stage of the game. But I would certainly hope that such would continue to be “upset” or better yet “angry” or, hopefully, “outraged”. To the extent that they are not is the extent to which there is no “hope” that something will be done. Anger CAN be impotent, but I do believe it is a necessary prerequisite to the type of action needed. I am glad Black is pissed off – we all need to be …

  14. Conscience of a Conservative

    A good reason why the best regulations promote transparency and ensure that the banks are subject to market forces and the scorn of investors. It’s just to much to ask that regulators will be vigilant today and tomorrow and the distant future.

  15. Conscience of a Conservative

    I would think that to go after a regulator in courts the standard would have to be very high, otherwise no one would ever wish to serve in that capacity(similar to the business judgment rule on corporate boards)

  16. Rastaman

    the Bush admin criminal mafia syndicate should have been arrested the FIRST DAY Obama took office…..

    now Barack, as an accomplice after the face, can join the rest of these FASCISTS at the Hague

  17. Maximilien

    “The fact that Obama has no response rebutting this grave charge against his administration’s integrity sounds loud, but not proud.”

    Unfortunately, Obama doesn’t have to rebut anything. He’s currently the strong 4/6 betting favorite to win the Presidency. He doesn’t have to do anything at all—except keep doing what he’s been doing, which is…well, nothing.

    (btw, Romney is 7/4 and Paul seems to be over-bet at a surprisingly low 14/1)

        1. Lafayette

          Move on to what? Romney?

          Don’t be a fool. A third-party hasn’t a chance in hell in the US due to districting and first-past-the-vote-counting.

          Just ask Ralph Nader.

          We have a two-party system. Period.

          So, let’s influence the system if we cannot change it. Vote progressives into the Democrat Progressive Caucus, which is 83 of the 435 representatives we vote into Congress.

          Leave the PotUS alone. He’s coasting to an election win. Nice and necessary, but not nearly sufficient.

          He needs a Congress that he can work with, or it’s four more years of gridlock in LaLaLand on the Potomac.

          1. Lafayette

            Typo: first-past-the-vote-counting.

            Should read: first-past-the-post-vote-counting (winner takes all).

  18. LeonovaBalletRusse

    Prof. Black, I’m just hearing the words of someone from UMissouriKC on “NPR News” (6:26 PME) about the Judge’s verdict about how “Muslim law” should have the same rights as “Christian” and “Jewish” law with regard to such *sacred covenants* as marriage, etc.

    The just Constitutional outcome would be now for all three of these “legal” EXCEPTIONS to the constitutional requirement (for freedom OF and FROM religion) to be considered equally illegal in the U.S.A.–although they may have the weight and force of cultural custom. Is this not so? Is it not a fact that some *religious laws* forbid equal rights for women according to our Constitution?

  19. Indian Jones

    LeonovaBalletRusse says:

    Careful, you may end up on the losing side of history.

    Indian Jones says:

    It appears that’s the better place to be.

    1. LeonovaBalletRusse

      Indian, never. It’s a fight to the death. It’s a new U.S. or organized crime forever.

      “Bush cousin presides over 9/11 suit against Cheney, Rumsfeld, Myers” by Craig McKee (12 April 2011) on

      See: “Gomorrah” as book and film.

      See today re the “Mafia bank” as the largest bank in Italy.

      1. Indian Jones

        A death-match between Organized Crime and a new US? I won’t be buying those tickets. My ironically toned point was that being on the “winning” side of history is not a prime objective – because that gets you where we are.

        Are you sure you’re slaying the right dragons?

  20. quark

    Where is.the proof..where are emails.pressing for prosecution and where are the emails refusing to prosecute and where is wikileaks when uou need them.

        1. LeonovaBalletRusse

          Tesla needs justice. Like Wallace Shawn, I can’t help my interest in “righting wrongs,” so far as possible. The genius of human creativity must live in science, music, art, and dance, to counteract the tragedy of human existence. We cannot live by bread alone. The Old World is dead. We must take our chances on the new. I want to see Giambattista Vico’s theory come true during my lifetime, for I am a poet.

          Otherwise: “Not to be born is the best for man.” (W.H. Auden: “Death’s Echo”)

          1. Indian Jones

            OoooKaaay. But what about the bullsh*t, the Rockefellers, and the psyops?

            Are you getting paid for this gig?

          2. Up the Ante

            “We cannot live by bread alone. ”

            That we surely cannot.

            What we need when we move amongst others is the surety of sane relations.

            The ‘can do’ people need to overcome this retard game of pretending others are AIDS vectors, a retarded game of sabotage.

            Reverse engineering America through retarded life choices ?


          3. F. Beard

            A good name is better than a good ointment, and the day of one’s death is better than the day of one’s birth. Ecclesiastes 7:1

          4. Up the Ante

            Ah, yes, Ecclesiastes, the logbook, diary, of a people grown weary as the signs of environmental degradation of the Mediterranean region mounted from year to year.

            Eccl. being the signpost to the future, as in Yes, we had seen it coming. And they felt powerless to change to avoid the degradation of the environment. Eccl.

          5. Indian Jones

            Very interesting, Up. Maybe as things were falling apart the priests were hammering away with their best moralisms (not denigrating it, F.)?

            Business was good.

  21. Lafayette


    Black: This column addresses a more general point, the charge that Obama’s financial regulatory leaders actively oppose the prosecution of elite financial criminals and the regulators who conspired with them (to use the term the article quotes Professor Kane as insisting upon).

    Black seems to think that just because he testified such is sufficient for guilt to be proven? Or that Morgenthern (or anyone else) publishes an article that may intimates, but cannot not prove, guilt?

    That is not the way the American court-of-justice system works. Throughout the desire to prosecute the villainy and professional negligence of oversight agencies there must be actual proof of the accusation.

    This is not easy to get and neither is it Mission Impossible. But it does take time and really digging in order to mine that nugget of gold.


    In a court of law, for conviction, a DA needs to show a smoking gun. Which, unlike Hollywood films, is not as easy (in terms of criminal investigation) as many think.

    I am still waiting for someone to ask why cannot the banks be prosecuted for transgressing the Truth in Lending Act (of 1968). I’ll be waiting on that one for some time to come, methinks.

    In such circumstances, the fall-back is always to have a regulatory power with both the means and the will to investigate and prosecute. Which we have not had under the previous administration. And, seemingly, neither under this one as well.

    The difference is that Dubya’s Administration went out of its way to neuter the watchdog agencies, to fulfill a promise it had made to its crony business community that had funded its electoral campaigns.

    (Ditto with its effort to spike the American judiciary with Right-wing judges.)

    The gross fraud committed upon the America public must not go unpunished. Otherwise, we are no better than a Banana Republic.

  22. sleeper

    If you want a smoking gun – here it is –

    Assistant U.S. Attorney Lawrence Lavecchio, who sat through the entire deposition, cited “governmental investigatory privilege” in preventing Rothstein from naming names of any political or law enforcement figures during his testimony. So far, seven people besides Rothstein have been charged, with five pleading guilty and a sixth preparing to do so.

    So here it is folks a US Attorney using his position to cover up in order to protect political or law enforcement.

    1. nonperson

      Meanwhile, AG Holder and crew persecute sick and suffering Americans for seeking safe, effective relief from MMJ. But it’s OK to protect and enable pharmaceutical giants peddling their poisons.

      What a sick, sick nation we’ve become.

    2. Up the Ante

      .. and once the spotlight catches the eyes of those looking out for the fraudsters in the dark, and you see glint of reflection and it is reflecting from the eyes of U.S. Attornies, the quarry is near.

      ^^ that was nearly self-regenerating, haha

  23. nonperson

    Another of Einstein’s theories from 1949 that can be quite appropriately applied to our time:

    “Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

    The situation prevailing in an economy based on the private ownership of capital is thus characterized by two main principles: first, means of production (capital) are privately owned and the owners dispose of them as they see fit; second, the labor contract is free. Of course, there is no such thing as a pure capitalist society in this sense. In particular, it should be noted that the workers, through long and bitter political struggles, have succeeded in securing a somewhat improved form of the “free labor contract” for certain categories of workers. But taken as a whole, the present day economy does not differ much from “pure” capitalism.

    Production is carried on for profit, not for use. There is no provision that all those able and willing to work will always be in a position to find employment; an “army of unemployed” almost always exists. The worker is constantly in fear of losing his job. Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers’ goods is restricted, and great hardship is the consequence. Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all. The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions. Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals which I mentioned before.

    This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.”

    Read more:

    In “looking forward, not backward”, Obama has failed to correct the criminal excesses and outright crimes, from war crimes to financial crimes, of the Bush administration but in failing to do so he has become complicit and has in fact furthered the criminal legacy he inherited. It’s his legacy now and this is why I cannot vote for Obama again. I’ll “waste” my vote on a third party Socialist candidate or a write in. Or maybe I’ll just stay home and not vote at all for the first time in forty years. I refuse to be a participant in this sham any longer. Let the chips fall where they may. What’s the difference?

    1. Doug Terpstra

      Thanks. “This crippling of individuals I consider the worst evil of capitalism.” Einstein is widely accepted as a genius; somehow less so as socialist (oddly enough (or not)).

      Eisntein continues right where you left off:

      “I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. … The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the
      glorification of power and success in our present society.”

      The man was truly ahead of his time, a time coming very soon.

      1. nonperson

        Yes. Absolutely, Doug. Einstein thought beyond the next quarter’s returns, for sure. Yet even his influence wasn’t strong enough to counter the forces of greed and avarice.

        Capitalism is the problem. Socialism is the answer.

        Capitalism is a failed system that only survives because we permit socialism for those obscenely wealthy few at our own expense.

        I thought we’d at least turned a corner with Obama but we wound up down the same dead end street. Obama had a once in a lifetime opportunity to change the course of history for the betterment of humankind but he squandered it and now we’re supposed to support him because his opponents are totally insane? LOL

        It’s time for real hope and change but it looks more and more, with our burgeoning police state and insane focus on austerity over humanity, that it may be too late. The game is over and the bad guys won.

        1. Indian Jones

          “Obama had a once in a lifetime opportunity to change the course of history”

          Are you saying that with a straight face?

          1. nonperson

            Obama had a real mandate, both Houses of Congress, and, after eight years of Bush and Cheney, the will of the people behind him.

            He could have changed the course of this nation but instead he caved in time and time again and turned his opportunity into four more years and worse.

          2. Indian Jones

            No. He had no choice. He’s a pecker, but you can’t hold him responsible for the white man’s evil.

    2. Aquifer

      Please, don’t stay home – that only encourages the little buggers …

      Vote 3rd Party – at least check out Jill Stein …

      1. nonperson

        The other side of the coin says, Don’t vote — it only encourages them.

        But I promise I’ll check out Jill Stein and the Green Party anyway, if for nothing more than to stick my finger in the establishment’s eye.

        1. Aquifer

          Well, i agree that if you vote for THEM it encourages them. But if you don’t vote at all it encourages them as well because it convinces them they have the field all to themselves – somebody will vote, THEIR somebody.
          On the other hand if folks in large numbers vote for someone like Stein – they will get the message, and if the numbers are large enough, we could actually kick the buggers out!

          Thanx for at least looking, it’s a start!

    3. Indian Jones

      There’s still work to do. The Pauloids, for example, cry for deprogramming. The whole bleeping political system is bloop.

      1. nonperson

        The siren call of Libertarianism. I’m all for freedom but Ron and Rand are frauds of the first order, for sure. But try explaining that to a generation that hears their siren call as they race headlong toward that rocky shore.

        1. Indian Jones

          Freedom, as politically evoked in the US, is a fraud. Tell the young’uns that Paul would pull another flim-flam like O’Bummer’s. He ain’t gonna stop the MIC all by hisself but he damn sure is gonna kick the “trash” into da street.

          Think, kiddies.

          1. F. Beard

            He ain’t gonna stop the MIC all by hisself but he damn sure is gonna kick the “trash” into da street. IJ

            Maybe but maybe not. If RP is really heartless (and stupid) enuff to cut social spending during a Depression then let him discredit the Austrians for all time.

            But remember, it was Nixon who floated the idea of a Negative Income Tax. If RP bypassed Washington bureacracies and just handed out money directly to the population, he would be hugely popular.

          2. Indian Jones

            Bass ackward inspiration. What is this fascination with double-subversion? Elect an authoritarian who’ll outsmart the public for their own good. Too clever.

            Spare me.

            “If RP bypassed Washington bureacracies and just handed out money directly to the population …”
            That’s some good sh*t you’re smokin, comrade. King Crazy.

          3. F. Beard

            That’s some good sh*t you’re smokin, comrade. King Crazy. IJ

            It was also Nixon-R who said “We are all Keynesians now” and Bush II-R who handed out stimulous checks.

            It took a Republican to go to China and it is more likily a Republican will know how to get us out of a Depression than a fumbling Democrat like Obama.

            The Republicans maybe evil but they typically understand economics much better than Democrats.

          4. F. Beard

            Ah, so now we’re slouching into the old reliable partisan squabble?IJ

            I hate both the Republican and Democratic Parties.

            I probably won’t vote at all the way things look now.

            Why should I?

          5. F. Beard

            Gotta go, comrade. IJ

            Don’t know about that. Between bankers and Commies it’s too close to call who has killed more. I figure either of you will put me in a camp one day.

      1. nonperson

        I can see the relevnce of Monty Python’s Permanent Assurance mutiny.

        Billie Holiday’s “Don’t Explain” should be the Obama administration’s anthem (just listen to the lyrics).

        But James Brown’s “Poppa’s Got A Brand New Bag”?

        I’ve always loved the Godfather of Soul but what we got in place of “hope and change” was nothing but more of the same old bag.

        1. Indian Jones

          Billie’s drowning in her abused love; James is partying with his new “bag”.

          Give up the capitalism, he ain’t good for you.

  24. nemo

    If anyone here is surprised at Obama’s reluctance to take on the banksters, all they have to do is google the following terms:

    Obama Clinton June 6 2008 Chantilly Virginia

    and understand that he met in secret with the very same banksters who burned down the world economy and pocketed the insurance money…after they took it from the taxpayer to the tune of Trillions-with-a-T.

    Obama will never bite the hands of that lifted him to the throne…and nor will any Republicans, save Ron Paul.

    Red/Blue is for chumps. All that counts is Green, as in money.

  25. falun bong

    Squarely at the feet of: Obama.

    Anyone who continues to support him also supports war, torture, drone bombing, NDAA murder of the Bill of Rights/habeus corpus.

    I voted for:
    Jimmy Carter
    Walter Mondale
    Michael Dukakis
    Bill Clinton
    John Kerry

    And this time I will vote for a candidate who is RELIABLY:
    -Anti-bank crime

    Ron Paul. I don’t give a damn what he thinks about abortion, or the Department of Education, or religion. He is 100% correct on the two main things that threaten America: endless billionaire banker bailouts and Permanent War.

    On every blog I look at the comments for R.Paul always have dozens of thumbs up…with one thumbs down. Seems like there’s always a 1%er out there who votes thumbs down, then asks his butler to pass the Grey Poupon…

    1. KnotRP

      If Ron Paul is actually a real threat (remember when Obama was a “threat”?), he’ll never make it on the Blue/Red menu.

      We’re going to have to cook up a meal on our own.

      1. Indian Jones

        That too. He is a threat … because he is a diversion, a delusion, a crooked little medicine man, A Texan Howard Hill.

    2. nonperson

      Ron Paul and his son are both avowed racists. This is the pride of Libertarianism? I’ll have no part of it.

      Libertarians like the Pauls try to adopt populist rhetoric but their words are at their heart empty — except for the very few, like them, who benefit from the status-quo.

      Sound familiar? It should. The Pauls are the one-percent using a populist message that’s nothing more than snake oil for people who are desperate enough to believe anything. They’re Ayn Rand disciples — nothing more than sociopaths with a political agenda.

      They are the black hole at the center of their own selfish universe, attracting then capturing the unsuspecting when the event horizon looms ahead and it’s too late to escape falling over the rim and being crushed in the Libertarian singularity.

      1. Indian Jones

        Um, that was delicious, thanks.

        Thank Noodles racism has fallen apart. One more loop in the prole brain the Kleptocrats can’t hook.

        This system is now all about betrayal. There ain’t no whitey capitalist heaven and Paul ain’t gonna take you there.

        Now, some rednecks are getting the point:

        so many seemingly smart people have totally swallowed the “Change” portion of [Paul’s] platform (they all want to bring us “change”, don’t they?). Why is it that these smart people, many I respect for their thinking ability, can be so gullible and sycophantic? How can these smart people (smarter than I) fall for ANOTHER “sElection” within the corrupt two-party system? How can these same smart people dog the bogusly single-minded, faux two party monstrosity and STILL believe that a solution could EVER come from that very system they disdain so much?

        The fookers are still pulling yer loops, rednecks. That’s how they got on top. Don’t feed their corrupt, authoritarian mentality by letting them teach you a another lesson.

    3. Aquifer

      correct on 2 things ….

      Well i suppose 2 out 102 isn’t bad these days, but why don’t you try someone who is better on a whole lot more … (Jill Stein)

      As they say, be careful what you wish for, you may well get it..

  26. Lafayette

    nonperson: Obama had a real mandate, both Houses of Congress

    Yes, for twelve months.

    You forget that Ted Kennedy’s seat was won by a Republican in January, 2010 – giving them the tie-braking vote (in the Senate’s idiotic super-majority voting system) that would prevent filibustering.

    It was the threat to filibuster the entire ObamaCare bill to death that forced him to compromise on the Public Option part.

    Let’s take note of what actually happened before jumping the gun and blaming Obama for everything under the sun in DC, including bad weather.

    Yeah, the guy can’t walk on water either. He’s human, not God. What did you think?

    1. nonperson

      Excuses, excuses, excuses.

      When those evil morons Bush and Vader were in the White House they got results. That’s because Republicans rule whether they’re in the majority or minority. They know how to get things done. Even when they’re evil things.

      Obama had a majority yet he still couldn’t get things done. I got a hint there was something wrong when Obama and Bush sasched down the portico after the election. Then, from day one, when Obama said he was “looking forward not back” I knew the fix was in.

      Then Obama proceeded to not only look forward but to actually further the policies Bush put in place on Habeus Corpus, domestic spying, Patriot Act II, his absolute joke of a health care plan that was anything but a “big fucking deal”, medical marijuana, whistle blowers, immigration, you name it.

      Obama is Bush in black only worse. I’ll never vote for this fraud again. Because I’m tired of excuses, excuses, excuses. Instead of an explainer who refuses to right the wrongs that have been done, I demand a LEADER who knows how to get the RIGHT things done.

      1. nonperson

        Oh, and let’s not forget extending the budget busting, surplus killing, deficit creating BUSH TAX CUT EXTENSION!


        Obama is a fraud who only represents the 99% during an election year. Then it’s right back to the big bankers and investors for his marching orders.

    2. nonperson

      PS Lafayette

      I shudder to think what George W Bush could have accomplished with 12 months of a Republican majority in both houses. If you disagree, just look at what that bastard accomplished without a majority.

      No more excuses. Obama had the political opportunity of a lifetime and he wasted it and became the biggest political disappointment of my lifetime.

  27. steelhead23

    If DOJ will not prosecute control fraud because it would likely embarrass senior government officials and the statute of limitations is rapidly approaching, then the injustices that led to America’s decline will go unpunished and certain to be repeated until women/men of integrity rule this country. Sadly, I have no idea how to profit from this knowledge.

    1. nonperson

      Yes, Steelhead23, all that you said plus the fact that Obama’s failure to prosecute all the wrongs of the previous administration; the war crimes, the torture, the economic fraud, the evisceration of our Constitution — plus Obama’s own extensions and codification of those crimes AND MORE ALL SETS PRECEDENT FOR ALL FUTURE “LEADERS”!

      Game, set, and match.

      Goodbye America. Hello fascist oligarchy.

      And dumbass Americans not only don’t know the game is over, they aren’t even aware of what game they’ve lost!

      The “two party system” is a joke. It is in reality a one party system with two names. A crude disguise to enable the few to dominate the many.

      Wrapped in the flag with fake patriotism as their banner, “the last refuge of a scoundrel”, to confuse their own nation while they fuck the world to further their own short-sighted greed and civilization ending ignorance.

      The almighty dollar is their god. War without end, amen.

  28. digi_owl

    I am starting to wonder if any US president over the last decade or two has actually had any say over the larger policy decisions. They seem to follow a set course no matter who is supposedly in charge…

  29. nonperson

    Here’s an interesting piece I came across today that highlights the utter failure of Obama and Holder to bring the capitalist criminals to justice who profited immensely while they broke the world at our expense.

    Happy Friday the 13th you fucking fools.

    Matt Taibbi

    Everything You Need to Know About Wall Street, in One Brief Tale

    If there was ever a news story that crystalized the moral dementia of modern Wall Street in one little vignette, this is it.

    Newspapers in Colorado today are reporting that the elegant Hotel Jerome in Aspen, Colorado, will be closed to the public from today through Monday at noon.

    Why? Because some local squire has apparently decided to rent out all 94 rooms of the hotel for three-plus days for his daughter’s Bat Mitzvah.

    The hotel’s general manager, Tony DiLucia, would say only that the party was being thrown by a “nice family,” but newspapers are now reporting that the Daddy of the lucky little gal is one Jeffrey Verschleiser, currently an executive with Goldman, Sachs.

    At first, I couldn’t remember where I knew that name from. But then I looked it up and saw an explosive Atlantic magazine story, published last year, called, “E-mails Suggest Bear Stearns Cheated Clients Out Of Millions.” And then I remembered that piece, and it hit me: Jeffrey Verschleiser is one of the biggest assholes in the entire world!

    The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally.

    Back in the day, you see, Verschleiser headed Bear’s mortgage-backed securities operations. Toward the end of his tenure, his particular specialty began with what at the time was the usual industry-wide practice, putting together gigantic packages of crappy subprime mortgages and dumping them on unsuspecting clients.

    But Verschleiser reportedly went beyond that. According to a lawsuit later filed by a bond insurer called Ambac, Verschleiser also masterminded a kind of double-dipping scheme. What he would do is sell a bunch of toxic mortgages into a trust, which like all mortgage trusts had provisions written into their pooling and servicing agreements (PSAs) that required the original lenders to buy the loans back if they went into default.

    So Verschleiser would sell bad mortgages back to the banks at a discount, but instead of passing the money back to the trust, he and other Bear execs allegedly pocketed the funds.

    From the Atlantic story:

    The traders were essentially double-dipping — getting paid twice on the deal. How was this possible? Once the security was sold, they didn’t have a legal claim to get cash back from the bad loans — that claim belonged to bond investors — but they did so anyway and kept the money. Thus, Bear was cheating the investors they promised to have sold a safe product out of their cash. According to former Bear Stearns and EMC traders and analysts who spoke with The Atlantic, Nierenberg and Verschleiser were the decision-makers for the double dipping scheme.

    Imagine giving someone a hundred bucks to buy a bushel of apples, but making a deal with him that he has to buy back any apples that turn out to have worms in them. That’s what happened here: Bear sold the wormy apples back to the farmer, but instead of taking the money from those sales and passing it on to you, they simply kept the money, according to the suit.

    How wormy were those apples? In one infamous email cited in the suit, a Bear exec colorfully described the content of the bonds they were selling:

    Bear deal manager Nicolas Smith wrote an e-mail on August 11th, 2006 to Keith Lind, a Managing Director on the trading desk, referring to a particular bond, SACO 2006-8, as “SACK OF SHIT [2006-]8” and said, “I hope your [sic] making a lot of money off this trade.”

    So did Verschleiser himself know the mortgages were bad? Not only did he know it, he went so far as to tell his colleagues in writing that it was a waste of money to even bother performing due diligence on the bad bonds:

    Jeffrey Verschleiser even said in an e-mail that he knew this was an issue. He wrote to his peer Mike Nierenberg in March 2006, “[we] are wasting way too much money on Bad Due Diligence.” Yet a year later nothing had changed. In March 2007, Verschleiser wrote to Nierenberg again about the same due diligence firm, “[w]e are just burning money hiring them.”

    One of the ways that banks like Bear managed to convince investors to buy these bonds was by wrapping them in bond insurance through companies like Ambac, commonly known as “monoline” insurers. Investors who knew the bonds were insured were less worried about default.

    Verschleiser, seeing that Bear had gotten firms like Ambac to insure its “sack of shit” bonds, saw here a new opportunity to make money. He first induced the monolines to insure the worthless bonds, then bet against the insurers! (Is it any wonder this guy ended up hired by Goldman, Sachs?) From the Atlantic story again:

    Then in November 2007, Verschleiser wrote to his risk committee that he knew insurers for mortgage securities were going to have big financial problems. He suggested they multiply by ten times the short bet he’d just made against stocks like Ambac. These e-mails show Verschleiser’s trading desk bragging to firm leadership that he made $55 million off shorting insurers’ stock in just three weeks.

    So in essence, Verschleiser was triple-dipping. First he was selling worthless “sacks of shit” to investors, representing them as good investments. Then, he kept the money from the return sales of the wormy apples. And then, on top of that, he made money by betting against the insurers he was sticking with these toxic assets.

    Read more:

  30. Alan8

    The two mainstream parties receive THE MAJORITY of their money from corporate sources. They’re shamelessly on the take. This kind of behavior is to be expected from corrupt politicians who are paid off.

    The Green Party doesn’t accept corporate money, and represents the 99%.

    The Green Party has over 100 members in office that have won their elections at the local level.

    Green votes are a way of fighting back against the Democrats’ betrayal of the 99%, even before the Green Party starts winning at the state and Federal levels. Your Green vote sends a clear message to the Democrats WHY they didn’t get your vote.

    A mere 5% of the vote will get the Green Party matching Federal funds.

    It’s time to start taking OUR country back from the 1% and their corporations!


  31. Emilio

    It’s a foregone conclusion that Obama will be kept on despite what the “electorate” desire. Obama has proven himself to be a reliable servant of the elite. My justification for that claim is easily borne out by all the watered down legislation he attached his moniker to. His claim of fighting for the middle class simply does not stand up to close scrutiny. His promises have largely been that, promises, and the beat goes on. So, why would the elite disrupt the well constructed charade that Obama has fronted for them? Perhaps with a Romney, or the likes, “in charge” the peons may become even more heated in their desire for drastic change as it’s a certainty that a Republican president would exacerbate the already harsh economic conditions even more than our current front man.

  32. MarkH

    Black is whispering in the dark a million miles from any other human and he thinks he’s screaming into a bull horn on the floor of the House or the well of the Senate. He’s wrong to think someone has chosen any course of response to his charge(s).

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