Gang Rape in America
In High Schools, the executive branch, Congress, and Wall Street -- Commentary by Jim Dean 10/28/2009

"The history of the last century shows, as we shall see later, that the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers, but was often disastrous for governments, businessmen, and the people generally." --Carroll Quigley

Sign on a bank: "We can loan you enough money to get you completely out of debt."

Dear Folks,

I am feeling violated tonight. I just finished watching the new Frontline adult education program, The Warning. The video is below and you all need to set an hour aside to watch this if you can grin and bear the pain.

Today's title came, of course, from the 15 year old who was gang raped at a homecoming dance at a California school with a history of violence. None of the monitors bothered to check the outdoor area during the evening. Cameras had been ordered by the school but not installed. Bystanders watched and did nothing to help her.

The Warning is the story about Brooksley Born, the former head of the Commodities Futures Trading Commission, whose department had regulatory authority over something called financial derivatives in 1996. Born had come into the Clinton administration through Hillary. They were top ranked lady lawyers. Bill Clinton passed her over for Attorney General, choosing Janet Reno instead, but Brooksley got the CFTC slot. Her law practice involved derivatives work.

Shortly after taking over the department this very smart lady began to spot right away that the unregulated derivatives market was a slow motion train wreck in progress. Not only were they totally unregulated but traders were not even required to keep any records. The trading was referred to as the black box. No one was allowed to look inside.

When Greenspan, Robert Rubin and Larry Summers heard that she was thinking of regulating derivatives trading they took turns on her, trying to intimidate her. When that did not work they dragged her in front of the President’s Working Group, Bill Clinton’s financial advisory group. And there they again went after her one by one. She was the only woman and not part of the club. How dare she upset their banker friends. No one in the room helped her. In The Warning only one admits regretting it, SEC chairman at the time Arthur Levitt.

But Born did not back down. She proceeded working on derivatives regulation so the boys decided she needed some more of the treatment. They dragged her in front of Congress where the Greenspan team went at her again, one by one, and they the Congressmen took their turn. She stood alone against them all while they accused her of endangering the country by ‘undermining’ the derivates market. In the end Congress actually banned her from doing any regulations. None of those watching lifted a finger to help her.

Six weeks later in 1998 the big hedge fund Long Term Capital Management began to meltdown. They had their $5 billion of investor money leveraged out on one trillion in derivatives contracts.

Treasury strong armed fourteen banks to put several billon up to buy them out to save the day. Brooksley Born resigned, knowing that there was nothing more she could do. They had stripped her of all of her power... but they had not learned anything.

Ten years later in 2008, it was the public's turn to get the treatment. Wall Street melted down with the derivatives greasing the skids. Describing it as a "bubble bursting" just do it justice. The whole country got gang raped every which way…homes, 401ks, jobs, futures. And the new perps even dragged our kids into it, passing their own losses down onto them.

"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." --Thomas Jefferson (1743-1826)

"Give me control of a nation's money and I care not who makes it's laws." -- Mayer Amschel Bauer Rothschild, (1744-1812)

And who is in charge of fixing the mess? The same gang we started out with, Larry Summers and his protégé Tim Geithner and crowd. And the financial lobby is fighting regulation tooth and nail. The players remain and the game is the same.

Alan Greenspan provides two big surprises in the show. At one point he is lecturing Brookesly Born on how she should not worry really about fraud in the marketplace. He felt that the market would 'self police itself ' almost as if fraud regulation was a bigger threat to the people than the fraud itself. That a man who could be this naive could be deemed a financial god indicates that maybe we all need to go out to the sweat lodge, but not for too long.

And at the end of the show in a Congressional hearing, Greenspan, the king of mumbo jumbo talk, admits that his free market philosophy had a fatal flaw in it. Thanks for pointing that out to us Alan. We might have missed that otherwise. We shall have to wait and see if he leaves his estate to a foundation to study the prevention of financial mega fraud. More on this topic later, something I have always felt was the biggest threat to America and forgive me for saying that I was right.

Frontline is an American treasure folks. They started out doing in depth investigative journalism on subjects that others were afraid to do. They cherry pick the best stories to help us defend ourselves from the sea of sharks we all have to swim in.

Watch the show. Please pass this post on so others can, too. Maybe we can put our heads together and figure out how we can bring firing squads back. And no, I am not kidding.

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States." -- Sen. Barry Goldwater, (R., AZ--1969-87)

"Bankers - pillars of society who are going to hell if there is a God and He has been accurately quoted." --John Ralston Saul

"But if you want to continue to be slaves of the banks and pay the cost of your own slavery, then let bankers continue to create money and control credit." --Josiah Stamp, (1880-1941)

"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it." --Louis T. McFadden, (R, PA) Chairman of the Committee on Banking and Currency (12 years), June 10, 1932

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." --Henry Ford

"Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people." --Rep. Ron Paul, speech to U.S. House, Sep. 10, 2002, introducing legislation to abolish The Fed. Paul authored End The Fed.

Jim Dean is the producer of Heritage TV and a member of the Georgia Heritage Council.