First came the looting of savings and loans across the nation, which, by the standard of today’s economic failures, was a quaint little hold-up.
It still gave us this delicious title: The Best Way to Rob a Bank is to Own One by William K. Black.
Have you heard of a better title for anything?
Maybe “The Best Little Whorehouse in Texas.”
But here, on pulp and in black and white, Black shows how our elected officials conspired with rogues to rob depositors, investors and workers of earnings and life savings.
Republican presidential nominee John McCain was there, acted as Charles Keating’s lookout for regulators.
Black, as Director of Litigation for the Federal Home Loan Bank Board, investigated the looting of the savings and loans industry. He reveals in his book how Keating and hundreds of other S&L rogues took advantage of a weak regulatory environment to perpetrate accounting fraud on a massive scale. In his expert insider’s account of the savings and loan debacle of the 1980s, Black shows how corrupt corporate executives—in collusion with regulators—defrauded whole industries for their own personal gain.
Using the latest advances in criminology and economics, Black develops a theory of why “control fraud”—looting a company for personal profit—tends to occur in waves that make financial markets deeply inefficient.
He then pointed out how CEOs, using the same destructively fraudulent tactics, caused the business failures of the early 2000s that continue until today.
His prescription for stopping the periodic looting is active, independent regulators.
McCain, although he’s making different noise today, calls himself a free marketer still. He wants no regulations of the markets or industry.
Even as McCain was escaping censure by the skin of his teeth in the savings and loans debacle, McCain’s best bud in the United States Senate, Phil Gramm, was stalking a bigger quarry: Glass-Steagall Act.
Improper banking activities, such as commercial banks’ involvement in the stock market, was blamed for the 1929 stock market crash that led to the Great Depression. To prevent another depression, Congress passed the Glass-Steagall Act, which separated investment and commercial banking activities. The nation recovered, these industries functioned the way they were supposed and the American economy grew strong again.
Phil Gramm, who is now one of Sen. McCain campaign’s most influential economic advisors, fought to destroy Glass-Steagall and break the back of the American workers. It took him years but he eventually, in 1999, succeeded in passing the Gramm-Leach-Bliley Act.
Out of that Gramm law flowed the calamitous collapses that followed–Enron, WorldCom, ImClone, Tyco, followed in recent days by the demise of Fannie Mae and Freddie Mac, Lehmann Bros., Merrill Lynch, and, momentarily, AIG should soon follow.
The collapses, of course, mean ruined the lives of countless investors, depositors, and employees.
Another McCain top economic advisor is Carly Fiorina who, when she was CEO of Hewlett-Packard, nearly drove the company into the ground after forcing through a controversial merger with Compaq Computers. By the time she left in 2005, the company lost half its value and suffered heavy job losses.
Somebody needs to ask McCain if he subscribe to Fiorina’s attitude about American workers, which she relayed to members of Congress on January 7, 2004:
“There is no job that is America’s God-given right anymore. We have to compete for jobs as a nation.”
The statement infuriated workers who felt that lower wages overseas encouraged U.S. corporations to use less-qualified, offshore workers, instead of better-qualified American ones.
The assaults on American workers by corporations, aided by elected officials who should be looking out for them, continue, of course. Industry after industry have devalued work that sustained American communities and shipped those jobs overseas to countries.
Unions, especially after World War II, led the growth of the American middle class, the largest economic expansion in history.
Elected leaders like McCain, acting as handmaidens for American corporations, against led the assault on unions and the jobs that sustained us as a nation.
But, if John McCain is now to be believed, he is going to be the bulwark that American families and workers should rely on. He had this to say at a rally in Florida today:
Mr. McCain vowed to take aim at what he called the “unbridled corruption and greed that caused the crisis on Wall Street.’’
And, guess how he plans to do this?
Yep, McCain wants to set up a commission to study the problem. You know, like the 9/11 Commission, whose recommendations were largely ignored by the administration that commissioned it.
What is the saying, there’s a sucker born every minute?
McCain knows by experience that Americans are suckers and that they will fall for anything. Afterall, how does a man who wallows in corruption and debacle after debacle, who is surrounded by the very worst offenders of what ails our nation, come out smelling like a rose every time, despite never changing his ways?
Doesn’t McCain shine bright as a paragon of virtue despite bedding down with corporate lobbyists preying on Americans even as we speak?
