Must Watch TV Tonight: PBS' Front Line Exposes Who Besides The Regular Republican Suspects Enabled The Financial Crisis

Trying again

Short answer: Rubin, Greenspan, Summers... and Geithner-- as much the enemies of financial regulation as any slimoid, bought-and-paid for Republican. And then there was, "buried deep in the bureaucracy," Brooksley Born, chairwoman of the Commodities Futures Trading Commission, who saw right through what these banksters were up to-- and blew the whistle, or at least tried to. She understood derivatives. No one would listen. Instead they shut her up. And the Fed continued to inflate an economy based on businesses too big to fail that were pre-destined for failure. When Republicans tried blaming Clinton for the inevitable crash that ended Bush's regime and doomed McCain's campaign, they weren't all wrong. There was plenty of blame to go around and it started with Reagan's policies, policies tragically embraced by Clinton and still embedded deep inside the Obama White House, where the same cast of malevolent banksters has been joined by Wall Street's very own Chief of Staff, Rahm Emanuel.

Tonight at 9PM PBS is debuting The Warning by Mark Kirk. I heard him being interviewed on the radio this morning. It promises to be a blockbuster of a program and if you ever wonder how all these highly paid smart guys dragged the whole country-- if not much of the world-- into ruin, you really ought to try to watch. Kirk's goal is to open the black box and unearth "the hidden history of the nation's worst financial crisis since the Great Depression." And he's got Born, in her first TV appearance discussing her attempts to straighten out the crooked dealers inside the Administration, to help him with the daunting task.

"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."

None of these guys have been drawn and quartered and none are in prison. Instead they're running the Obama Administration and pushing the economy inexorably over the financial cliff. "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." As for effective regulations on derivatives... bizarrely it comes under the aegis of the House's most corrupt committee, Collin Peterson's Agricultural Committee, completely dominated by reactionary Blue Dogs and widely expected to kill any attempt at genuine reform.

A sneak peak at The Warning (Part 1)



(Part 2)