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Bill Black gives one of his best recaps ever of the “too big to jail” syndrome on Bill Moyers. For readers who missed the story, Black gave critical testimony in a Federal prosecution of small fry mortgage fraudsters. He helped persuaded the jury that in fact no fraud took place because the banks were willing to underwrite any predatory, poorly underwritten loan in the runup to the crisis. Black savages the posture of the Department of Justice in this case and in general:
WILLIAM K. BLACK: Yeah, the saying in the savings and loan debacle is you never wanted to be the guy that was chasing mice while lions roamed the campsite. So the mice are these alleged tiny frauds type of thing, where they ignore the lions, who are the CEOs of the banks and such.
BILL MOYERS: And the jury said, no, it’s the lions.
WILLIAM K. BLACK: It’s–
BILL MOYERS: Not the mice.
WILLIAM K. BLACK: Yes. So this is a crisis created by the lenders. And the reaction of the US attorney, who’s Benjamin Wagner there was, well, we’re not going to be deterred in prosecuting mortgage fraud. Well, we don’t want them to be deterred. We want them to prosecute but prosecute the lions and stop this nonsense.
Black goes well beyond mortgage fraud to discuss the gamut of bank abuses the Administration has chosen to ignore and why this posture is guaranteed to cause a future financial meltdown. This is a worthwhile segment in and of itself, and is also a good overview for friends and colleagues who are mystified that as to why the banksters got off scot free.