Barron's: Interview with William Black

In Barron's 4/13/2009 on page 36 I believe we can finally understand what's behind the scenes of Banks Bail Out'
Barron's:Just how serious is this credit crisis? What is at stake here for the American taxpayer?
Black:Mopping out the saving-and-loan crisis cost 150 billions; this current crisis will probably cost a multiple of that. The scale of fraud is immense.....Unless the current administration changes course pretty drastically, the scandal will destroy Barack Obama's presidency.....
Barron's: So you are saying Democrats as well as Republicans share the blame? No one can claim the high ground?
Black:We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure? If they are going to get any truthful investigation, the Democrats picked the wrong financial team. Tim Geithner, the current Secretary of the Treasury, and Larry Summers, Chairman of the National Economic Council, were important architects of the problems. Geithner especially represents a failed regulator, having presided over the bailouts of major New York Banks.
Barron's:So you aren't a fan of the recently announced plan for the Government to back private purchases of the toxic assets?
Black: It is worse than a lie.Geithner has appropriated the language of his critics and of the forthright to support dishonesty. That is what's so appalling-numbering himself among those who convey tough medicine when he is really pandering to the interest of a select group of banks who are on the first-name basis with Washington politicians..................(skip)
If cheaters prosper, cheaters will dominate. It is like Gresham's law: Bad money drives out the good. Well, bad behavior drives out good behavior, without good enforcement......(skip)
Barron's: Summarize the problem as best as you can for Barron's reader.
Black: With most of America's biggest banks insolvent, you have, in essence, a multi trillion dollar cover up by publicly traded entities, which amounts to felony securities fraud on a massive scale. These firms will ultimately be forced into receivership, the management and board stripped of office, title and compensation. First there needs to be a clearing of the air-a Pecora-style fact finding mission conducted without fear or favor (Ferdinand Pecora was an assistant district attorney fron New York who investigate Wall Street practices in the 1930's. Then we need to gear up to pursue criminal cases. Two years after the marked collapsed, the Federal Bureau of Investigation has one-fourth of the resources that the agency used during the saving-and-loan crisis. And the current crises is ten times as large. There need to be major force set up, like there were int the thrift crises. Right now things don't look good. We are using taxpayer money via AIG to secretly bail out European banks like Societe Generale, Deutshe Banc and USB in Switzerland, while we were simultaneously prosecuting the bank for tax fraud. The second most obscene: Goldman receiving almost 13 billion in AIG counter party payments after advising Geithner, President of the New York Fed, and then-Treasury Secretary Henry Paulson, former Goldman Sachs honcho, on the AIG government take over......(skip).
Please buy April 13, 2009 edition of Barron's. Read the full article. Starts on page 36 and you will have a clear picture of how our government is defrauding us taxpayer. Thank you