Women are 50% of the population, but they created all of it. What we need to know is that sometimes in our creators lies our salvation. We failed Brookesly Born, let’s not fail Elizabeth Warren.
It is rare that a nation on a headlong plunge to kleptocracy is given a second chance to change course. We allowed the ignominious suppression of Brookesly Born’s prescient and amazingly accurate warnings of the financial disaster and its causes. The suppression was engineered by the three most ruthless “banksters” of the times, Greenspan,(1) Rubin and Summers, whose claims to infamy, history will show, is that they were wrong in almost every prediction, yet they manipulated their dark financial paths to obscene wealth. Elizabeth Warren has given us a second chance to set things straight by publicly demanding the single most important factor in saving America – remove the bought and paid for immunity of the 1% and “jail wealthy criminals.”
Brookesly Born was the single person most capable of preventing the 2007-2008 financial disaster. Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers, are the 3 individuals most responsible for causing it.
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In May 1988, after becoming CFTC (Commodity Futures Trading Commission) chair, Brooksely Born sought the legally required comments on the need to regulate new swaps derivatives (that are traded at no central exchange) known as the dark market, and thus have no transparency except to the two counter-parties.
Born’s team completed a complicated financial analysis which led them to anticipate a serious crisis. CFTC was the only organization with the responsibility to investigate and regulate new technologies and concepts in the financial sector.
The request for comments, called the “Concept Release,” stated that the growth of trade in derivatives totaling trillions of leveraged dollars had prompted the CFTC to impose regulations on the derivatives.
The proposed regulations were opposed by Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers. On May 7, 1998, former SEC Chairman Arthur Levitt joined their opposition in the President’s Working Group.
In the release, Born attempted to shed light on the dark market, citing grave concerns about unregulated OTC derivatives. The PWG suppression focused on the risk that regulation would increase legal uncertainty concerning swaps and other OTC derivative instruments and reduce their value. They claimed potential turmoil created by the imposition of new regulatory costs might stifle innovation and push transactions offshore.
Under heavy pressure from the majority of the President’s Working Group and the financial lobby, legislation prohibiting regulation of derivatives by Born’s agency was passed by the Congress. Born resigned on June 1, 1999.
In 2009 Born, was awarded the John F. Kennedy Profiles in Courage Award in recognition of the “political courage she demonstrated in sounding early warnings about conditions that contributed to the current global financial crisis.” According toCaroline Kennedy, “…Brooksley Born recognized that the financial security of all Americans was being put at risk by the greed, negligence and opposition of powerful and well connected interests. One member of the President’s working group had a change of heart about Brooksley Born.
SEC Chairman Arthur Levitt stated on a Frontline interview “The Warning”, “I’ve come to know her as one of the most capable, dedicated, intelligent and committed public servants that I have ever come to know”, adding that “I could have done much better. I could have made a difference” in response to her warnings.
A New Standard-Bearer
For the first time since the resignation of Brookesly Born, Elizabeth Warren a former consumer advocate and now the junior senator from Massachusetts, has attacked the shady practices of financial institutions and what she views as leniency from the regulators tasked with overseeing them.
In a memorable series of exchanges during a Banking Committee hearing on March 7, 2013, Warren demanded answers from a panel of federal regulators as to why the multinational bank HSBC got off with a fine for money laundering for Mexican drug cartels – along with violating international sanctions against several countries, including Iran and Libya – when people caught with drugs go to jail for life.
“No one individual went to trial, no individual was banned from banking and there was no hearing to consider shutting down HSBC’s activities here in the United States,” Warren said. “So … what does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?”(2)
“If you’re caught with an ounce of cocaine, the chances are good you’re going to go to jail. If it happens repeatedly, you may go to jail for the rest of your life,” Warren said. “But evidently, if you launder nearly a billion dollars for drug cartels and violate international sanctions, your company pays a fine and you go home and sleep in your own bed at night – every single individual associated with this. I just – I think that’s fundamentally wrong.”
In mid-February, Warren asked a panel of half a dozen senior bank regulators, “Can you identify when you last took [one of] the Wall Street banks to trial?”
“We do not have to bring people to trial,” (my emphasis) said Thomas Curry, who leads the Office of the Comptroller of the Currency. She answered, “I appreciate that you say you don’t have to bring them to trial. My question is when did you bring them to trial? There are district attorneys and United States attorneys out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it….I’m really concerned that ‘too big to fail’ has become ‘too big for trial.'”
The Need to Prosecute Regulators Who Refuse To Prosecute Criminals
Without being explicit, Elizabeth Warren has made it clear to the nation that regulators that allow criminal behavior who also have the authority to prosecute criminal behavior and refuse to do so, are accessories before and after the fact. They themselves are criminals and subject to prosecution.
This is a nation where prosecution of wealthy criminals is almost non-existent. Virtually all federal law enforcement agencies are incompetent, corrupt, or both. The rich perpetrators reside among the notorious 1%, the victims are pretty much the rest of us. Sooner or later, some of the victims in the 99% are going to remember they can resort to “citizens arrests” :
“the natural right of one to bring another to justice for harm intentionally committed demonstrating mens rea enables anyone for any reason, through common law, to submit a valid cause of action to a magistrate, judge or in some cases a Grand Jury against the accused to seek their arrest.”
There are desperate victims – and the last resort of a citizen’s arrest is desperate and very complicated. In a population with 300,000,000 guns, it is also dangerous. What this country needs immediately, is a method to implement prosecution and conviction of admitted criminals who believe they are untouchable. It is not arguable that an honest president that believes in law and the constitution could do the job. Unfortunately we haven’t had one that fits that description in a very long time. However, we are lucky enough to have been given a glimpse of hope for the future.
“Progressives fell in love with Elizabeth Warren because they saw in her a fighter – someone who would break from Washington’s longstanding tradition of cozying up to big banks and instead hold them accountable for bad behavior.
She hasn’t disappointed.”
It’s hard not to love a woman with a pair who fights for what is right, but it’s not enough. I want to see her be elected President.
1) Economist Paul Krugman wrote that Greenspan was a “three-card maestro” with a “lack of sincerity” who, “by repeatedly shilling for whatever the Bush administration wants, has betrayed the trust placed in the Fed chairman”.
Noam Chomsky [Occupy. London: Penguin. pp. 33–34.ISBN 978-0-241-96401-9.] characterized portions of Greenspan’s February 1997 testimony to the U.S. Senate as an example of the self-serving attitudes of the so-called 1%. In that testimony, Greenspan had stated that growing worker insecurity is a significant factor keeping inflation and inflation expectation low, thereby promoting long term investment.
Matt Taibbi described the Greenspan put and its bad consequences saying: “every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over”, thereby making it “almost impossible” for the banks to lose money. He also called Greenspan a “classic con man” who, through political savvy, “flattered and bullshitted his way up the Matterhorn of American power”.
2) The extensive report on London-based HSBC Holdings PLC by the Senate Permanent Subcommittee on Investigations said HSBC’s US division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al-Qaeda and other terrorist groups.