Page 110 - Bioterrorism

109

Street banks, and Maddow asked him if he saw a connection between those prosecutions and what
led to the current crisis.

Spitzer said "Absolutely," and while the specific instruments and mechanisms, derivatives and
credit default swaps, may have changed, the "fundamental accounting fraud... the desperate desire
to cook the books," is present in the current collapse.

Spitzer worries that despite the government spending trillions of dollars to bail these companies
out, "not nearly enough is changing." Essentially, we are not doing enough to combat the systemic
problem of companies that are too big to fail:

We are rebuilding the same edifice. We are re-establishing the primacy of the same companies.
We are still building in a too-big-to-fail structure so that so that we as taxpayers will be guarantors
of companies that when they get into trouble again, we will bail them out. None of this is being
confronted by the administration as they, and we through our tax dollars, resuscitate a broken
system.

Spitzer also highlighted that one of the reasons for the massive scale of the current financial crisis
is that our economy has been so over-leveraged and that what had to happen in order to right our
economy was to de-leverage. However, Spitzer argues, we haven't de-leveraged at all; we've
simply transferred the obligation from the banks to the taxpayers, and the taxpayers have gotten a
raw deal in the process.

http://www.huffingtonpost.com/2009/05/12/rachel-maddow-eliot-spitz_n_202725.html

Professor William Black has also touched on the theme.
“Associate Professor of Economics and Law at the University of Missouri-Kansas City School of
Law. He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He
previously taught at the LBJ School of Public Affairs at the University of Texas, and at Santa
Clara University. He was litigation director for the Federal Home Loan Bank Board, deputy
director of the FSLIC, SVP and the General Counsel of the Federal Home Loan Bank of San
Francisco. [2]”

“On April 3, 2009 Black appeared on "Bill Moyers Journal" on PBS and provided some disturbing
[4]
[3]
commentary on the current banking crisis. In the interview with Bill Moyers, Black asserted
that our current banking crisis is essentially a big Ponzi scheme, that the "liar loans" and other
financial tricks were essentially illegal frauds, and that the triple-A ratings given to these loans
was part of a criminal cover up. He said that the "Prompt Corrective Action Law" passed after the
Savings and Loan crisis mandated that ailing banks should be put into receivership. Black also
stated that trying to hide how bad the situation is will simply prolong the problem, as happened in
Japan's lost decade. Black stated that Timothy Geithner is engaged in a cover-up, and that the
administration does not want people to understand what went wrong or how bad the banking
situation is today.”
http://en.wikipedia.org/wiki/William_K._Black

The New York Times reported Yra Harris, a commodoties trader, alleging the Wall Street Banks
see transparency about their operations as inimical to their profits. This is surely a pretty good
definition of „crime.“

http://www.nytimes.com/2009/06/01/business/01lobby.html