The Myth that Obama’s Taking Huge Contributions from Wall Street Was Fine

[Jefferson23]

By William K. Black
April 7, 2016 Bloomington, MN

I am now officially an economic advisor to Senator Sanders, and this column reflects some of that advice. Part of my advice is not to take money from Wall Street felons. (I am not taking credit for Bernie’s decision — at most I supported a decision he had already made over a year ago.) One of the reasons I reinforced Bernie’s decision was witnessing the problems President Obama experienced given his taking very large contributions from Wall Street. I channeled the prescient warning that Professor Thomas Ferguson (U. Mass, Boston) gave a group of us in 2008. He predicted, accurately, that Obama would not lead an effective crackdown on the endemic fraud by Wall Street elites that caused the financial crisis. Tom (he is a personal friend) is the expert on campaign finance. He authored the classic book on campaign finance entitled Golden Rule (as in the observation that he that has the gold makes the rules.).

Tom pointed out that (then) Senator Obama was accomplishing something unprecedented. He was not only raising more money from Wall Street than the Republicans were, he was doing so in the context of a nomination battle with (then) Senator Hillary Clinton. The Clintons were both preeminent leaders of the “New Democrats.” They crafted the coalition of conservative (on economics and national security issues) Democrats. The New Democrat’s apparatus was funded overwhelmingly by Wall Street and President Bill Clinton was famous for championing the three “de’s” – financial deregulation, desupervision, and de facto decriminalization. Even if Wall Street was willing to reverse decades of contributing primarily to Republicans, why would they choose Senator Obama over their great ally, Senator Hillary Clinton? Tom predicted that Obama would win the nomination and the election – and would reject emulating President Roosevelt’s “New Deal” and its transformation of finance. All three predictions proved accurate.

Hillary Clinton’s defense of taking millions of dollars in contributions from Wall Street and her extraordinary fees for speeches to Goldman Sachs is that Obama took even more money from Wall Street – indeed, more than anyone has ever taken from Wall Street.

snip* We also need to ask a more fundamental question of Hillary – why? Why with your huge Super PAC funding from Wall Street, your delegate lead, and the criticism you are getting from progressives and will get from independents and Republicans do you continue to take enormous sums from Wall Street felons? It is clearly a liability politically. It blows your cover as a self-describe convert to progressive approaches to regulating (and prosecuting) Wall Street.

remainder in full: http://neweconomicperspectives.org/2016/04/myth-obamas-taking-huge-contributions-wall-street-fine.html

Banking Expert Who Exposed Savings & Loan Corruption Joins Sanders Campaign
By Reno Berkeley
Crossposted from Inquisitor.com

An expert in banking corruption and finance has joined the Bernie Sanders campaign. William K. Black, an associate professor at the University of Missouri-KC, is Bernie Sanders’ new economic advisor. Black was one of the central figures in exposing and prosecuting corruption in the savings and loan crisis from the late 1980s and mid-1990s. His addition to the Sanders campaign brings important knowledge in laws pertaining to finance and banking.

The savings and loan banking crisis resulted from a multitude of causes, one of which were two laws that helped deregulate them. The Depository Institutions Deregulation and Monetary Control Act of 1980 was signed into law by President Jimmy Carter. That law allowed credit unions and savings and loans to offer checking deposits, and to charge any loan interest rate they chose.

In 1982, Ronald Reagan furthered the deregulation of savings and loans by signing the Garn-St. Germain Depository Institutions Act, which allowed property owners to put real estate into trust accounts to avoid future lawsuits or creditors. Both bills reduced regulatory oversight and by the time the crisis was in full swing in 1995, 1,043 out of 3,234 savings and loan associations had failed due to risky and illegal behavior.

in full: http://www.inquisitr.com/2979022/banking-expert-who-exposed-savings-loan-corruption-joins-sanders-campaign/#AAKVKckTPF0U3RSI.99

[DanTex]

1. What a surprise. A Sanders campaign operative smearing the president.

Good luck with that.

[Jefferson23]

3. Keeping your head in the sand can look like a smear, to some. n/t

[think]

4. Ya. Maybe Hillary can bring back Eric Holder and really tell those banks to Cut it Out...

[kristopher]

14. You like living in a country controlled by the rich. We get it.

Most of us don't.

You have your values, we have ours. That leads to different conclusions; who knew?

[Jefferson23]

21. Indeed, it's part of our divide. n/t

[merrily]

2. Wall St. firms are not charitable organizations. They have a *legal* obligation to maximize returns

for their stockholders. And the executives seem to love maximizing their own compensation, along with buying things like $2000 wastebaskets and taking luxury junkets at company expense.

Any questions?

[Jefferson23]

5. Benevolence is not their thing..more people are catching on to that reality. n/t

[merrily]

8. *Legally,* benevolence *cannot* be their thing.

either.

Now, they can do charity, as did Henry Ford. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co. However, they can do that only if it serves the goal of maximizing stockholder profits. The charitable donation is supposed to buy goodwill of some kind that comes back to the stockholders in increased sales, or favorable legislation or some other way. Always, always, legally, the goal of all activities must be to maximize profits. Otherwise, they open themselves up to lawsuits by stockholders. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co

And, by nature, ascetic lifestyles do not seem to be their thing. So, they are going to spend a lot on themselves, pay themselves a lot, excusing that by claiming that will better enable them to make money for the corporation, and then maximize profits to stockholders.

[Jefferson23]

9. Good point about the lawsuits by stockholders, concentrating the greed...thanks for pointing that

out.

[DanTex]

6. Individuals who work at corporations are not the same as corporations.

Until this primary season, I thought only right-wingers believed that "corporations are people."

[Jefferson23]

7. Lobbyists are people connected to corporations. n/t

[think]

10. William K. Black is a no nonsense kind of guy. He states ZERO Wall Street prosecutions occurred for

3 obvious cases of fraud during the economic melt down.

The American people should be furious that Wall Street crime goes unpunished!

William K Black is the right person to tell this tale. I hope he is allowed to speak about these issues on television during this primary....

[Jefferson23]

11. I have not ever seen Bill on any msm outlet, have you? n/t

[think]

12. I've not seen him in MSM. You'd think with his background in banking corruption he'd be a regular

It's very disheartening.

I doubt many Americans know who he is and his legacy of exposing the S&L crisis.

I had not heard of him until a few month ago and am constantly amazed by his insights and knowledge regarding banking and financial crime.

Looks like he was on Bill Moyer's show on PBS in 2009:

William K Black

Savings and loan scandal

Black was a central figure in exposing Congressional corruption during the Savings and Loan Crisis. He took the notes during the Keating Five meeting that were later published in the press, and brought the event to national attention and a congressional investigation.

According to Bill Moyers,

"The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called "Keating Five" were named — he sent a memo that read, in part, 'get Black — kill him dead.' Metaphorically, of course. Of course."[5]

~Snip~

Bill Moyers Journal appearance

On April 3, 2009 Black appeared on Bill Moyers Journal on PBS and provided critical commentary on the U.S. banking crisis.[6] In the interview with Bill Moyers,[7] Black asserted that the banking crisis in the United States that started in late 2008 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 and resulted in Japan's lost decade. Black stated that Timothy Geithner was engaged in a cover-up, and that the administration did not want people to understand what went wrong or how bad the banking situation was....

https://en.wikipedia.org/wiki/William_K._Black#Savings_and_loan_scandal

[Jefferson23]

13. I became aware of him after the crash in '08. MSM has no reason to welcome him, he

understands WS's game too well and their bobbleheads would end up embarrassed
by him..there are others like Black, but he is one of the very best.

From 2015:
Now the DOJ Admits They Got it Wrong
http://neweconomicperspectives.org/2015/09/now-the-doj-admits-they-got-it-wrong.html

[think]

17. "Now the DOJ Admits They Got It Wrong" This is the first piece I remember seeing by Bill Black

I must admit that in 2008 -09 I was less political and mostly living my life trying to deal with the effects of the economic tsunami.

My interests in politics before then was mostly on things like Iran Contra and America's foreign policy. After this financial crisis my focus has become much broader.

Hopefully more Americans will truly start paying attention to what's going and what roles the Wall Street banks played in that crisis and how they got away with it..

[Jefferson23]

18. I hope Black can get some attention in the msm...maybe by way of the upcoming debate?

Looking at polls, the common denominator this election cycle is corruption in politics,
hopefully we'll be able to mobilize that into substantial reform.

[KoKo]

15. No....

MSM silenced any voices that don't support Corporate Agenda long ago. They let a few dissident voices speak on the Financial Sites after the '07-08 crash, but when the Bail Out progressed they saw the writing on the wall that investigation of what went wrong wouldn't be profitable.

And, 2007 was election year. I remember the fear on the faces of the CNBC crowd when Obama was elected. It began to dissipate in the months after the Inauguration as the bailouts progressed. Bernie Madoff seemed to be the only casualty and was a timely distraction. It was up to the newly emerging Financial Blogosphere to work to do the research to inform the public about what really led up to the crash. They did a very good job but most of America would never see it. They were left with a few popular books, a couple of movies and Frontline Investigations from PBS.

I know about Bill Black because of the Internet. There are many other unheard/censored voices by MSM, and in some circles in the MIC, that Bernie could bring in to begin a clean up of our Government.

[Jefferson23]

16. Yea, I wanted to ask since I've not seen him on any of those news outlets. n/t

[KoKo]

19. I forgot to mention that "You Tube"

was where you could find Bill Black and many others. A huge community of financial investigators devoted to exposing what had gone wrong producing video interviews, online documentaries along with blogging.

And, I'm not talking about the "Alex Jones Conspiracy Theorists" or the "Gold Bug" Crowd. I'm talking about people who had worked in Financial Regulation in Government Agencies, in International Banking, on Wall Street and for Investment/Pension Firms who were totally disgusted by what they saw. Also, those who had been Whistleblowers warning of the coming Financial Meltdown/Crash whose warnings had been ignored by the Regulating Agencies about the Housing Bubble, the "Liar Loans" and other shenanigans that they watched for years.

[Jefferson23]

20. Yes, Bill was never part of that CT crowd..the problem is lack of interest by the msm.

To be certain, they were not interested in giving Black and others who also contributed with hard
analysis on that scale a platform.

[KoKo]

22. Bill Black "On Fraud"--Bill Moyers Journal / Video

BILL MOYERS JOURNAL | William K. Black on Fraud | PBS
It's a Great Watch to jog memories and doesn't seem dated even all these years. One can see how Bill and Bernie would have much in common.

---------

. http://www.pbs.org/moyers/journal/042...
Uploaded on Apr 6, 2009

http://www.pbs.org/billmoyers The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with Bill Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout. ]/b]

[Jefferson23]

23. Ah, the Bush Regime..those were days, huh?, the FBI warning, 2004:

FBI warns of mortgage fraud 'epidemic'
Seeks to head off 'next S&L crisis'

http://www.cnn.com/2004/LAW/09/17/mortgage.fraud/

"It has the potential to be an epidemic," said Swecker, who heads the Criminal Division at FBI headquarters in Washington. "We think we can prevent a problem that could have as much impact as the S&L crisis," he said.