Bill Black: Still Banking on Fraud

[marmar]

from Dollars & Sense:



Still Banking on Fraud
Reforms Fail to address the “control fraud” that caused the financial crisis.

By William K. Black


A truly amazing thing has happened in banking. After the worst financial crisis in 75 years sparked the “Great Recession,” we have

* Failed to identify the real causes of the crisis
* Failed to fix the defects that caused the crisis
* Failed to hold the CEOs, professionals, and anti-regulators who caused the crisis accountable—even when they committed fraud
* Bailed out the largest and worst financial firms with massive public funds
* Covered up banking losses and failures—impairing any economic recovery
* Degraded our integrity and made the banking system even more encouraging of fraud
* Refused to follow policies that have proved extremely successful in past crises
* Made the systemically dangerous megabanks even more dangerous
* Made our financial system even more parasitic, harming the real economy


And pronounced this travesty a brilliant success

The Bush and Obama administrations have made an already critically flawed financial system even worse. The result is that the banking industry’s future is bad for banking, terrible for the real economy, horrific for the public—and wonderful for the top executives at the largest banks. This is significantly insane, especially given that over the past 30 years, the savings-and-loan fiasco and other crises provided ample opportunity to learn about those flaws. It appears that we will need to suffer another depression before we are willing to put aside the crippling dogmas that have so degraded the financial system, the real economy, democracy, and the ethical standards of private and public elites.

The Economics Blindfold

Why did most of the experts neither foresee nor understand the forces in the U.S. banking industry that caused this meltdown? The short answer is: their dogmatic belief in neoclassical economic theory that is impervious to the facts, or what I like to call “theoclassical” economics. ............(more)

The complete piece is at: http://dollarsandsense.org/archives/2011/0111black.html