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Greenwald: Obama's Failure to Punish Banks Should Be Causing Serious Social Unrest

A new PBS Frontline report examines outrageous steps Obama's administration took to protect Wall St. Wall Street from prosecutions.

January 23, 2013 | Alternet

PBS' Frontline program on Tuesday night broadcast a new one-hour report on one of the greatest and most shameful failings of the Obama administration: the lack of even a single arrest or prosecution of any senior Wall Street banker for the systemic fraud that precipitated the 2008 financial crisis: a crisis from which millions of people around the world are still suffering. What this program particularly demonstrated was that the Obama justice department, in particular the Chief of its Criminal Division, Lanny Breuer, never even tried to hold the high-level criminals accountable.

What Obama justice officials did instead is exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality. Indeed, financial elites were not only vested with impunity for their fraud, but thrived as a result of it, even as ordinary Americans continue to suffer the effects of that crisis.

Worst of all, Obama justice officials both shielded and feted these Wall Street oligarchs (who, just by the way, overwhelmingly supported Obama's 2008 presidential campaign) as they simultaneously prosecuted and imprisoned powerless Americans for far more trivial transgressions. As Harvard law professor Larry Lessig put it two weeks ago when expressing anger over the DOJ's persecution of Aaron Swartz: "we live in a world where the architects of the financial crisis regularly dine at the White House." (Indeed, as "The Untouchables" put it: while no senior Wall Street executives have been prosecuted, "many small mortgage brokers, loan appraisers and even home buyers" have been).

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PBS outlet has no

intellectual might to investigate things. They have the same myopia as our populists here.

1) Banks and the FED were not interested in the social-political agenda to give homes to as many as possible. The government forced banks to provide sub-prime lending. The demand that followed forced the FED to add more reserves to the banks.

2) People LOVE to have FDIC insurance on their deposits. Trade unions LOVE to have their pension funds in Wall Street stocks. Therefore, USA could not let banks, monopolies and their depositors (people at large) fail.

The alternative to doing nothing

Is a Washington investigation. A Washington investigation is where one guilty party called "the independent counsel" colludes in secret with another guilty party named as "the scandalizer" to pin the negative innuendo on some poor low level unaware sap. The "independent counsel"'s job is appear shocked at the scandalousness of it all. No criminal charges are ever filed.

At least Obama is honest. In a way. He's not doing anything because it would just open a bigger can of worms. And who the eff'ing heck would or could he find to play the role of "independent counsel"? Crisis actors are getting easier and easier to spot these days.


I don't think they ever will prosecute these things because they know it will only come back to hurt them. An investigation into the banks would undoubtedly lead to fingers being pointed right back at the government, FDIC, regulators, Fannie/Freddie, and policy makers at all level. They know it, and they can't have any of it.

Mary Jo White

Now he has nominated a former prosecutor to be the head of the SEC. Obama praised her work prosecuting orgainzed crime families and the World Trade Center bombers. He seemed to downplay that as an attorney she represented JP Morgan and BOA's Ken Lewis. A Reuters story calls this balance. OMG.

You should throw into this prosecution list

the folks at the Federal Accounting Standards Board (FASB) who allowed the nations top banks to mark to fantasy the assets they own on their balance sheets (houses that had fallen in value) to stave off the already underwater FDIC.

I still to this day know of people who have lived mortgage free for over 3 years and one who owns multiple houses that he collects rent on. These houses are worth about half of what he paid for them after taking out loan after loan and buying more houses at the height of the market (when I was telling him to diversify into gold).

Instead of the banks foreclosing upon his houses, they have no incentive to because they don't have to "mark to market" (mark to today's value) that asset on their balance sheet because the FASB allows banks to cheat. It's a sham.

We have to play by the rules. Banks don't. And then Congress gives them money and banks keep doing business as usual (including shorting gold and silver) knowing they are invincible. Meanwhile the sub-investment grade derivatives the nations top banks own are more now than at the height of the 2008 financial crisis. Yet no one writes about this.

I have written much on this and my latest was titled: Bernanke and the Fed Will Do Anything to Save the Banks Under the Guise of Reducing Unemployment

J.P. Morgan, you will recall, last year had a $1 billion, no $5 billion, now $6.4 billion trade go wrong they blamed on a London Whale and fired a prominent V.P. over. They simply had no counterparty to this trade and had to take the loss. J.P. Morgan has more of the sub-investment grade derivatives on the books coming due in the next 5 years than they do Market Cap. Congress and the Fed will be asked to step in to save the "too big to fail." Again.

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

also what's with Corzine?

also what's with Corzine?


What's with that? CLEAREST case of mass theft EVER.

Hey Bobby

Good to see you back on DP my friend!

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Thanks Double L glad to be

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