House Republicans Try to Create a World Fit for Criminals
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The epidemic of accounting control fraud by financial institutions that drove the Great Recession was the largest and most costly example of white-collar crime in history. But all we have heard from Obama and Holder is minimization of the role of fraud in the crisis and the same abject failure as the Bush administration to prosecute the elite frauds that drove the crisis. The minimization of fraud comes from the death of criminal referrals by the regulatory agencies. Neither the banking regulatory agencies nor the FBI has conducted what would have been considered in our era a serious investigation of an elite financial institution. When it comes to elite frauds; if you don’t look you don’t find. Having falsely claimed that there were only trivial violations of the law, the Obama administration has emasculated its ability to go credibly to the public and warn that the House Republicans are about to recreate the criminogenic environment that produces our recurrent, intensifying financial crises. Holder and Obama cannot credibly claim that the House Republicans are about to allow our financial elites to again grow wealthy through fraud because Holder and Obama are continuing Mukasey and Bush’s policy of granting d e facto immunity to the elite criminals who caused the crisis.
Prominent Republican writers have recently urged their Party to destroy crony capitalism. Instead, their representatives are trying to entrench it. Prominent progressives have been urging Obama to destroy crony capitalism. Instead, he has entrenched it by taking his financial advice from Robert Rubin, Lawrence Summers, Geithner, and Bernanke. Neither party is willing to take on their leading source of political contributions. We need a party, an attorney general, and a slew of regulators who will make it their mission to end crony capitalism in America. Europe needs the same thing.
Bill Black is 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. He spent years working on regulatory policy and fraud prevention as Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board and Deputy Director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.