By A.M. Kisly
This Time Magazine cover should read, "The Committee Responsible for the World's Economic Meltdown."
My husband and I watched “Frontline: the Warning’ on our local PBS channel the other night. It is an hour long documentary on the events leading up to the collapse of our economy just one year ago.
This documentary is unbelievable, and should be viewed in every home in America.
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."
I will add a side note to this, for those of you keeping your eye on the economic roller coaster, the government and major news networks would have you believing that we are through the worst part of the economic crisis. Yes, everyone cheered as the Dow catapulted above 10,000. Wall Street’s breaking the Dow Jones’s 10,000 mark was hailed as a further sign of the recession’s end, even as foreclosures rose to an all-time high and the official unemployment rate continued to edge toward 10 percent.
The New York Times called the Dow’s rise to 10,000 “a milestone of the stock market’s recovery from the depths of the financial crisis.”
The milestone isn’t what it appears to be. With the trillions of dollars spent on bail-outs, the American Dollar’s worth isn’t worth much. The value of the dollar has fallen, drastically.
This is precisely what the Obama administration has allowed. More than a year after the outbreak of the deepest financial crisis since the 1930s, not a single banker or financier has been held accountable for wrecking the US and world economies. No restrictions or demands have been imposed on the financial markets, even as trillions of dollars in taxpayers’ money have been poured into them. The same methods of accounting fraud and outright criminality continue. And they will produce the same results, an intensified crisis and an even deeper social catastrophe for the working class.
LOOK UP! FOR OUR REDEMPTION DRAWETH NIGH....................
You can watch this documentary here:FRONTLINE - THE WARNING