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Tackling Wall Street Criminality

Article by Stuart Bramhall.

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Inside Job

Produced, written and directed by Charles Ferguson (2010)

Film Review

The 2010 film Inside Job should be required viewing for Fox pundits and other media skeptics who still question the rationale behind the #OccupyWallStreet movement. The film lays to rest once and for all the myth that the 2008 economic collapse was merely a “perfect storm” of regulatory failure, greed, conflict of interest and general stupidity. Not only does our current epidemic of unemployment, bankruptcies, foreclosures and homelessness stem from blatant criminality on the part of investment banks and credit rating agencies, but from 2005 on, the IMF warned both the Bush administration and the Federal Reserve that urgent intervention was needed to prevent a major economic meltdown. Yet, as with 9-11, it seems decisions were made at the highest levels of government to let it happen.

A Longstanding Pattern of Criminal Behavior

It’s extremely ironic to watch the violent police attacks on peaceful OWS protestors, when the blatant criminality that caused the current global economic crisis goes unpunished. In addition to explaining the technical intricacies of the derivatives bubble and the regulatory failure (owing to blatant, possibly criminal, conflicts of interests of Federal Reserve and Bush Treasury officials) that was the immediate cause of the 2008 collapse, Inside Job reveals the extensive pattern of pre-2007 Wall Street criminality uncovered and prosecuted by New York attorney general Elliott Spitzer. This includes

  • Successful prosecutions of investment banks for promoting dot com stock they knew was worthless (the main cause of the 2001 dot com crash).
  • Successful prosecutions of all major investment banks for money laundering, linked to drugs and/or arms trafficking, in one case (Credit Suisse) to Iran.
  • Multiple prosecutions for accounting fraud, which included non-wall street companies Fannie Mae and AIG.

Unfortunately Spitzer, who became New York’s governor in 2007, was forced out by his own sex scandal (which may have been a set-up), before anyone got around to prosecuting Wall Street banksters for allowing account executives to bill their $1,500 an hour call girl services as a business expense. Inside Job interviews a Park Avenue prostitute who talks about entertaining account executives from all the major investment banks. She reveals that they provided special letterhead to use for her invoices, which enabled the charges to be disguised as “business development.”

The Systematic Demonization of Honest Regulators

 

The film also shows how officials in the Clinton and Bush administration were systematically demonized when they attempted to regulate the criminal side of derivatives speculation. One example is Brooksley Borne, the Clinton appointee who ran the Commodities Futures Trading Commission (CFTC). She ran afoul of Bill Clinton in 1998 when she attempted to bring financial derivatives under CFTC regulatory control. Bourne’s most outspoken critics, Senator Graham and Treasury Secretary Larry Summers were subsequently rewarded with lucrative jobs in the financial services industry: Graham with UBS (an international Swiss-owned financial services company) and Summers with the major hedge fund D.E. Shaw.

Making Out Like Bandits

The film outlines how most of the bankers directly responsible for the 2008 collapse – even those who ran the now-bankrupt Lehman Brothers – walked away with their fortunes intact. Many remain in their jobs and thanks to taxpayer-funded bailouts, continue to receive multimillion dollar salaries and bonuses. Others have been appointed, by Obama, to run the US Treasury and Federal Reserve.

The film poo-poos the argument that these banks are too big and powerful to be criminal prosecuted. Robert Gnaizda, co-founder of the California-based Greenlining Institute, believes the Justice Department (or the New York attorney general) should begin by going after banks where evidence of criminal is the most blatant – Goldman Sachs, Merrill Lynch, Lehman Brothers and Countrywide. Evidence uncovered during formal prosecution is certain to incriminate other investment banks; credit ratings agencies; Clinton, Bush and Obama regulators; and economics professors at Harvard, Columbia and elsewhere who serve as “neutral” federal advisers, despite the millions of dollars of income they rake in from Wall Street interests.

As Inside Job points out, Wall Street prostitutes who charge $1,500 an hour have to keep impeccable records. These could prove invaluable in persuading a few low level banking executives to turn on their superiors.

Narrated by Matt Damon, the film is available from most public libraries. It can also be viewed free at the online site “Stop Foreclosure Fraud” at http://stopforeclosurefraud.com/2011/04/03/inside-job-oscar-winning-documentary-now-online-free/

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