This evening, Bill Moyers interviewed William K. Black, the former senior regulator during the savings and loan crisis of the 1980s, who blew the whistle on the Keating Five (the U.S. Senators implicated in taking “gifts” from S&L bankster Charles Keating was convicted of racketeering and fraud in both state and federal court after his Lincoln Savings & Loan). Black is now an Associate Professor of Economics and Law at the University of Missouri, and the author of the recently released book, The Best Way to Rob a Bank is to Own One.
Black, who supported the presidential campaign of Barack Obama, excoriated both President Obama, and former President Bush, and their Treasury Secretaries Timothy Geithner and Hank Paulson, respectively, for deliberately and consciously violating the law. Specifically, the Prompt Corrective Action Law, passed after the savings and loan crisis, which mandates that severely undercapitalized banks be promptly put into receivership (i.e., nationalized).
From the Bill Moyers Journal this evening:
WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.
BILL MOYERS: In other words, they could have closed these banks without nationalizing them?
WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.
BILL MOYERS: And that's a law?
WILLIAM K. BLACK: That's the law.
BILL MOYERS: So, Paulson could have done this? Geithner could do this?
WILLIAM K. BLACK: Not could. Was mandated—
BILL MOYERS: By the law.
WILLIAM K. BLACK: By the law.
SNIP
WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn't matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, "You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you're covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn't work. You will cause your recession to continue and continue." And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It's working just as well as it did in Japan.
BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
WILLIAM K. BLACK: Absolutely.
BILL MOYERS: You are.
WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong.
The Prompt Corrective Action Law is codified as Title 12 of the US Code, and as currently published by the US Government reflects the laws passed by Congress as of Jan. 3, 2007. Here are some parts of it.
TITLE 12 > CHAPTER 16 > § 1831o
§ 1831o. Prompt corrective action
(d) Provisions applicable to all institutions
(2) Management fees restricted
An insured depository institution shall pay no management fee to any person having control of that institution if, after making the payment, the institution would be undercapitalized.SNIP
(3) Conservatorship, receivership, or other action required
(A) In general
The appropriate Federal banking agency shall, not later than 90 days after an insured depository institution becomes critically undercapitalized—
(i) appoint a receiver (or, with the concurrence of the Corporation, a conservator) for the institution; or
(ii) take such other action as the agency determines, with the concurrence of the Corporation, would better achieve the purpose of this section, after documenting why the action would better achieve that purpose.
Of course, if Black’s charges take hold and force President Obama and Secretary Geithner to respond, a lot of debate is going to take place over that little section (ii), “such other action as the agency determines.”
watch the entire interview
William K. Black on Bill Moyers Now.
Honestly, not to tout our own horns but Black's interview almost sounded like a summary of our blogs posts since we started.
I think you got the one fact I had not idea of...that is it a law they must put into receivership insolvent banks.
I don't think he is alone in being disgusted with Obama at all even though he was an Obamamaniac during the election. There are many out there at this point and I am sure it is tough when all had such high hopes, worked on campaigns and so on.
(Myself I thought Hillary was least objectionable program, but not "endorsed" but she assuredly had much better policy positions including wanting a RTC/HOLC type of structure straight from the S&L and Great Depression, but she also voted for all of this bail out money.....so....)
But there are a host of other issues where Obama is doing the corporate bidding, it is not just the financial crisis. Sorry the news is grim, I wish it was different.
Anyway, I hope all watch the entire video. I could post the interview on EP, but I'm unsure on PBS now's copyrights and if they care about that or not so just click on the link.
He does an exceptional job of explaining the history in layman's terms. If anyone is still fuzzy on how this whole Ponzi scheme works, the interview should help out quite a bit in clarifying.
What's Going On Now???
FREAKING RIDICULOUS!!
I don't understand this latest speak-out by William Black. Why is this coming out now?? Black has known about this for several years now, and now this is on every major media channel. This is not new information. The only thing extraordinary is that it has been released onto major media outlets. Why now?
Something is not right. Black supported Obama? Why isn't he reaming Obama on this matter?? Look at who Obama has selected as his economic team....they're ALL CROOKS. But Black is completely silent on this matter. That's a big RED flag if you ask me. Obama is the man with the power. Black should be blasting Obama to fix this immediately. And Obama could fix this with a snap of his finger. Certainly Black knows this...I do! So why does Black come out in public with this devastating news? Where is his outrage at Obama??? With Congress???
Something doesn't smell right here. We are manipulated by an organized group of people that are experts at mind control. This latest revelation by Black is very suspicious in light of his outrage which is directed at only Treasury secretaries. His outrage should be placed with the president and Congress. CONGress has the ultimate power to protect the constitution, oversight, investigative powers, supoena power...and the power to stop this immediately.
Black solution is to get rid of the CEOs that have been in place through this financial disaster. That's strange. Why wouldn't we focus on bringing out the truth. Why wouldn't we start investigations and indictments? Why not issue supoenas immediately? So his solution is for the CEOs to walk away, after they have been enriched by billions of dollars, and to find someone new???? That's absurd!!! The system is the problem, and the people who have hijacked it. Black offers us nothing more than what we already knew. He has just focused our anger onto the treasury secretaries...AND NOT THE PRESIDENT AND CONGRESS where it should be. Outrageous!! I can't believe what I am hearing.
Be careful folks. They are walking us down a very strange road which is filled with deceit, fraud and lies. This is just another step they are forcing us to take. I do not trust Black anymore than the others, especially after this interview.
Barack Obama’s Corrupt Economic Team
Benjamin Bernanke(Jewish) - Chairman, Federal Reserve System
Timothy Geithner(Jewish) - Secretary, U.S. Treasury Department
Lawrence Summers(Jewish) - Chairman, National Economic Council
Paul Volcker(Jewish) - Chairman, Economic Recovery Advisory Board
Jared Bernstein(Jewish) - Chief Economist and Economic Adviser, Vice President
Peter Orszag(Jewish) - Director, Office of Management and Budget(OMB)
Gary Gensler(Jewish) - Chairman, Commodity Futures Trading Commission(CFTC)
Mary Schapiro(Jewish) - Chairman, Securities and Exchange Commission(SEC)
Sheila Bair(Jewish) - Chairman, Federal Deposit Insurance Corporation(FDIC)
Karen Mills(Jewish) - Administrator, Small Business Administration (SBA)
Christina Romer(Jewish husband) - Chairman, Council of Economic Advisers
5 stages of grief
First is denial, second is rage.
It sounds like you are a real Obama supporter. Many who post on EP were too.
But I really hate to tell you this, we have been tracking on this crisis for some time and Black is right.
That's by digging in deep into the economics, the facts, the policy moves, the money.
Black is not alone of many economists experts who thought Obama would be different who are now having a wake up call.
Black does blast Obama in this interview.
I agree though, all of those economists, policy experts really should have been talking during the election, in the primaries.
Of course it didn't matter in the general because McCain had even worse policies.
I'm not sure it can be
I'm not sure it can be characterized as a Jewish conspiracy. We're in a global multilateral interdependent system at this point. I agree with the policy critiques, but that's pretty much what our focus needs to be on, if we're to try to understand and maybe get to some workable policy recommendations.
oh SHIT, I did not catch that in that comment!
Crap. Thanks Gregman2 for catching the "Jewish" by all of the economic advisers in that comment.
We all know what that is to claim that "Jews control the banks" crapola.
Sorry folks for not deleting this comment earlier, it was late, the comment long and I missed it completely.
Normally anything racist etc. is just deleted.