By 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. Originally published at New Economic Perspective
I am writing as one of the four founding members of Bank Whistleblowers United. We came together recently to create a detailed plan that could restore the rule of law to Wall Street and dramatically reduce the risk and damage of future financial crises. We crafted it so that it could be implemented without any new legislation or regulation. We offered our aid in the implementation process to any candidate who wins the election – and pointed out that President Obama could implement it immediately. Our plan and approach virtually defines the word “pragmatic.” It would also transform finance and begin to end its corrupt culture.
In response to Bernie’s big election win in New Hampshire, a political scientist rushed out a piece in the New York Times advising Hillary how to do a PR makeover. His advice was “peddling pragmatism,” by which he meant the opposite – an effort to rebrand Hillary through slogans. The political scientist does, however, understand Hillary’s key liability – the one that Krugman was foolish enough to think was an asset – “she often sounds as if she were acquiescing to a status quo that Democrats find objectionable.” Actually, she is acquiescing to a status quo that is objectively far beyond “objectionable.” It isn’t simply Democrats that find it unacceptable for a pervasively corrupt Wall Street to maintain its destructive power over our economy and our democracy, that view is shared by the vast majority of Republicans and independents.
Hillary does not “sound as if” she is “acquiescing” to Wall Street’s stranglehold. Hillary’s most prominent economics supporter, Krugman, urged us to vote for her because Hillary will not seek to break Wall Street’s corrupt power. Paul Krugman, in an article meant to attack Bernie Sanders, accidentally misfired and shot Hillary Clinton when he admitted that Dodd-Frank did not even try “breaking [Wall Street’s] power” over our economy and democracy – and praised that failure. Hillary’s fundamental problem is that after an adult lifetime in which she and Bill formed a mutual support society with Wall Street few find her claims to a Road to Damascus conversion credible. In the last debate, when trying to demonstrate how tough she was on Wall Street the best she could muster was to call the elite bankers’ frauds that caused the Great Recession “shenanigans” – childish pranks.
Endorsing our plan to restore the rule of law to Wall Street is the perfect opportunity for Hillary to embrace pragmatism and credibly demonstrate that she refuses to “acquiesce” to Wall Street’s continued corrupt power over our economy and our democracy. She simply has to pledge to implement our plan to demonstrate that she has embraced pragmatic, vital change that will break Wall Street’s dangerous power over our economy and democracy.
Similarly, Hillary is faced with a simple choice, but also an enormous opportunity, by our proposed campaign pledge. She could announce that she had reconsidered her fundraising in light of our plan and decided that it was wrong to take campaign contributions and fees from financial felons. She is locked into a harmful dynamic now in which she tries to defend taking large amounts of money from banks. She could escape that trap by agreeing not to take contributions from banks that the U.S. and its agencies, after investigation, have charged with committing felonies. The issue would no longer be her refusal to admit that campaign contributions affect politics and instead became one of integrity and ethics. She would be on the right side of that issue if she made our campaign pledge. We ask all the candidates to stop taking contributions from the financial felons.
Bank Whistleblowers United will identify publicly which candidates pledge to implement our plan in whole or in specified part. There is no excuse for violating this pledge, for it can be implemented without any reliance on new legislation or regulation. Any candidate who takes the pledge and fails to implement will be exposed as a liar. That is why we have some degree of confidence that candidates that take the pledge will actually implement the plan. Please ask the candidate you are considering supporting to go on record as to whether they support or oppose the pragmatic plan of the Bank Whistleblowers United.
President Obama can implement our plan now if he has the will to restore the rule of law to Wall Street and break its corrupt power. There are no excuses based on Republican control of the House and the Senate when it comes to implementing our plan. The President could begin to implement it tomorrow. We hope the American people will join us in urging that he do so.
We have designed our plan pragmatically so that any President can implement it. All the President needs to implement our plan is the integrity, the will, and the courage to break Wall Street’s power. The Bank Whistleblowers United know all about what it takes to personally summon the integrity, the will, and the courage to “speak truth to power.” We did so in circumstances where we knew we would suffer fierce retaliation. Our power, compared to those elite bank fraudsters we confronted was that of a tiny skiff facing a raging ocean.
Wall Street, its political henchmen and women, and the anti-regulators appointed to run most of our regulatory agencies since 1993 are immensely powerful and work together to maintain Wall Street’s corrupt power. The fraudulent bankers wear nice suits, but they are brutal and unrestrained in seeking to discredit and destroy those that speak truth to power. We have the scar tissue that ensures we will never forget these facts.
But the President of the United States has incomparably greater powers and protections than we had. Should she or he have a burning will to make breaking Wall Street’s corrupt power a top priority, the integrity to refuse the enormous (perfectly legal) bribes Wall Street offers in the form of speeches, consulting gigs, and board seats, and the courage to restore the rule of law in the face of Wall Street’s smear machine they will succeed in implementing our pragmatic plan. We understand, from the inside, how fraud became Wall Street’s business plan and we know what works to break the power of those elite frauds.
Our plan provides an objective gut check for every candidate. Talk is cheap. If you believe what you say about the need to restore the rule of law to Wall Street, pledge to implement our plan. If you believe that politicians should not be funded by the elite Wall Street felons, take our campaign funding pledge. The Bank Whistleblowers United stand ready to help you implement the plan and train your personnel on how the fraud schemes work.
The fundamental question: is fraud illegal?
The subprime loans are what triggered the system. Certainly George Bush (kid), Chris Cox, Rubin, Summers and many others set up the system that structurally failed. Obama appointed Shapiro to the SEC. She was a failed regulator who did not catch Bernie Madow. Geithner was a failed regulator who let Citi crash. Summers was part of the cabal that prohibited regulation of Derivatives. Eric Holder from a law firm that defended big banks in court was appointed Attorney General who refused to prosecute fraud. So – I would argue that Hillary should show us the type of person she would appoint to those positions. We need people capable of managing large organizations to get things back to a structurally viable system. She has a start in her NYT op ed. People like Sheila Bair and Gary Gensler with proven records might be available. She needs to publically commit. Failure to do so will result in people not bothering to vote.
Q: Is fraud illegal?
A: It depends on who you are.
That should be the motto for Obama’s Justice Department.
I forgot – could Bill Black tell us why SARBOX is not viable – it goes after risk and I think has civil and criminal powers. I think it can go after corporations and individuals. If we think about it, ENRON officers are the last one’s prosecuted with jail time.
The pledge link in the post is not working for me (Chrome browser). Here’s a working link:
Will Hillary Live Up To Her Word On Bank Reform?
Does Obama Have The Will To Restore The Rule Of Law To Wall Street?
What kind of fresh silliness is this?
Hillary will say *anything*, promise anyone *anything* to be elected president.
And she will forget all those promises, if elected.
She has certainly forgotten her 2008 PROMISE to exit NAFTA if elected (unless it is renegotiated).
Personally, I’d like to see ONE simple change made to ALL the trade agreements so we can see just how truly interested in TRADE corporations are: eliminate ISDS from ALL of them. If a corporation doesn’t like a regulation or law they can take it to court in the country from whence the reg of law originates. If they have a valid case, they will win, but then, there’s no such thing as a valid reason to poison water, air, kill workers due to lax safety, or kill/injure/harm “consumers” due to faulty or false-advertised products.
Yes, ISDS is toxic and unconstitutional.
Clinton has been endorsed by Eric Holder, which tells us all we need to know. Game over.
oooOohhhh, good to know!
The curse of links not working this morning:
The NYT link to “peddling pragmatism” doesn’t work. It’s missing the “l” in “html.” Here’s a good one:
I watched Holder’s commercial for Clinton for the first time yesterday in SC. Said nothing, just looked like an old time black minister gently guiding his flock. Clearly trotted out to rally the black vote because of his race, not because he did anything to lighten the burden. I think the Clinton team are really scared they may lose this primary. My canvassing in black communities seem to show very shallow support for Clinton.
I LOVE the Bank Whistleblower’s Plan & wonder how we can make it mandatory that each candidate give a definitive answer to each proposal long before time to vote? (Like NOW)
I’d be willing to postpone voting UNTIL each has answered. That’s how strongly I feel about it.
Excellent, excellent job by Bank Whistleblower’s United. My cowgirl hat is off to you!
Yes it would be nice to get a definitive response about every point of the proposal from the candidates during the primary. And again in the general. The problem, of course, is that beyond Bernie who will acknowledge any change in position and address it, who would you believe about it?
I’m dead serious. People change their mind I get that, but the two other leading candidates change their positions the way they change their clothes and never acknowledge that they have. I haven’t seen Cruz change, but honestly until the last month or so I haven’t followed him, and I’m getting the same lawyerly parsing thing on some issues. Rubio? Kasich?
As Krugman says in his piece linked by Bill Black there is a difference between Mr Obama and President Obama and the same is true for plain old Mr Krugman and Mr Krugman past winner of a Nobel Prize . Colloquially the difference is called BAGGAGE, or put somewhat more delicately ‘ a position to uphold ‘ and my contact list and the lovely parties I get invites to will suddenly diminish. But it simply won’t wash plain old Mr Krugman; and here lies the problem identified often enough by Bill Black, but unfortunately not ( on the face of it ) understood by him. It’s called POWER . As Trotsky expressed it so perfectly ‘ Who whom ‘ in his 1925 article ‘ Towards Capitalism or Towards Socialism ‘ . President Obama in answer to this question decided it was Towards Capitalism when he bailed out the banks, but not the underwater homeowners . Would a President Clinton, or a President Sanders do the same ? That’s for you dear voter to decide, but personally I don’t think your vote counts, only your pitchfork does.
Will, Integrity and Courage
That is the name of a law firm that will appear on a mini-series that opens in early November, 2016. Casting begins now for lead attorneys.
It was pointed out on another thread, but HC wore the same outfit for the most recent debate that she wore for her most recent speech to Goldman Sachs. Better luck, perhaps, with Sanders.