Banking Blues Continue

The troubles for our banking industry continue to mount in spite of the fact that Wall Street had a mini rally last week (after a pretty "good" month), not to mention the fact that the Obama Administration, in line with Wall Street itself, continues to be in denial and lie to the American people about the overall economic situation. Once again, Paul Krugman layed out where we actually stand in terms of our economic realities.

How did we get there? It isn't that our banks are bad. That is the result. It is that our entire banking culture is corrupt. (And here, I'm again talking about the big players. Most small, regional and local banks are AOK.)

A good indication of what I'm talking about was offered by Arianna Huffington recently when she detailed how the banks are back to using -- legally! -- the same sorts of accounting tricks that helped bring them down. Moreover, the players at the top have massive conflicts of interest between their own self gain and the good of their institutions, not to mention the good of the public.

An even better assessment of this came on Bill Moyers' Journal program a couple weeks ago. William K. Black, professor of economics and law and a veteran of the S&L debacle twenty years ago, details in vivid detail just what is wrong with the system. It is built to fail. You read that correctly. And without top-to-bottom change, it will fail and fail and fail... and the cost will always be paid by the public. And individual investors will always get screwed in the process to boot.

I highly recommend Huffington's piece, but the Black interview should be viewed by every American. The link provides both video and a transcript. The program is not long and you will be amazed, if not exactly shocked. After all, what can shock us now?

21 April 2009

PS: If you don't think that Obama and Wall Street are both lying to you. Ask yourself this: Can the banks be solid and fully funded as they say and still need two trillion dollars worth of shoring up as the Administration maintains? Can the bailout be working as Obama says it is while the banks that have received the most bailout cash are loaning less and less? No changes to the system are being made and at best, we can hope for a situation such as Japan's "Lost Decade" with what is in place now.