ALL is ONE — ONE is ALL

Interview of William K. Black by Bill Moyers:

MOYERS: For months now,
revelations of the wholesale greed and blatant transgressions of Wall
Street have reminded us that “The Best Way to Rob a Bank Is to Own
One.” In fact, the man you’re about to meet wrote a book with just that
title. It was based upon his experience as a tough regulator during one
of the darkest chapters in our financial history: the savings and loan
scandal in the late 1980s.

BLACK: These numbers as large as they are, vastly understate the problem of fraud.

MOYERS:
Bill Black was in New York this week for a conference at the John Jay
College of Criminal Justice where scholars and journalists gathered to
ask the question, “How do they get away with it?” Well, no one has
asked that question more often than Bill Black.

The former
Director of the Institute for Fraud Prevention now teaches Economics
and Law at the University of Missouri, Kansas City. During the savings
and loan crisis, it was Black who accused then-house speaker Jim Wright
and five US Senators, including John Glenn and John McCain, of doing
favors for the S&L’s in exchange for contributions and other perks.
The senators got off with a slap on the wrist, but so enraged was one
of those bankers, Charles Keating — after whom the senate’s so-called
“Keating Five” were named — he sent a memo that read, in part, “get
Black — kill him dead.” Metaphorically, of course. Of course.

Now
Black is focused on an even greater scandal, and he spares no one — not
even the President he worked hard to elect, Barack Obama. But his main
targets are the Wall Street barons, heirs of an earlier generation
whose scandalous rip-offs of wealth back in the 1930s earned them
comparison to Al Capone and the mob, and the nickname “banksters.”

Bill Black, welcome to the Journal.

BLACK: Thank you.

MOYERS:
I was taken with your candor at the conference here in New York to hear
you say that this crisis we’re going through, this economic and
financial meltdown is driven by fraud. What’s your definition of fraud?

BLACK:
Fraud is deceit. And the essence of fraud is, “I create trust in you,
and then I betray that trust, and get you to give me something of
value.” And as a result, there’s no more effective acid against trust
than fraud, especially fraud by top elites, and that’s what we have.

MOYERS:
In your book, you make it clear that calculated dishonesty by people in
charge is at the heart of most large corporate failures and scandals,
including, of course, the S&L, but is that true? Is that what
you’re saying here, that it was in the boardrooms and the CEO offices
where this fraud began?

BLACK: Absolutely.

MOYERS: How did they do it? What do you mean?

BLACK:
Well, the way that you do it is to make really bad loans, because they
pay better. Then you grow extremely rapidly, in other words, you’re a
Ponzi-like scheme. And the third thing you do is we call it leverage.
That just means borrowing a lot of money, and the combination creates a
situation where you have guaranteed record profits in the early years.
That makes you rich, through the bonuses that modern executive
compensation has produced. It also makes it inevitable that there’s
going to be a disaster down the road.

MOYERS: So
you’re suggesting, saying that CEOs of some of these banks and mortgage
firms in order to increase their own personal income, deliberately set
out to make bad loans?

BLACK: Yes.

MOYERS:
How do they get away with it? I mean, what about their own checks and
balances in the company? What about their accounting divisions?

BLACK:
All of those checks and balances report to the CEO, so if the CEO goes
bad, all of the checks and balances are easily overcome. And the art
form is not simply to defeat those internal controls, but to suborn
them, to turn them into your greatest allies. And the bonus programs
are exactly how you do that. … (04/09/09)

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James Howard Kunstler writes: Even while a wave of reflex nausea washed over America last week,
and the unemployment rolls swelled by much more than another half
million, the greatest stock market suckers’ rally in seventy years
pulled in the last of the credulous. These are strange days. The earth
is heaving and the buds swelling again — at least north of the
equator, where most of the action is — and the global economy, which
was supposed to be a permanent new add-on to the human condition, is
sloughing away in big horrid gobs. But no one in charge of anything can
believe it. The banking fiasco has introduced so much noise into the
system that world leadership can’t think straight.

What they’re
missing is real simple: peak oil means no more ability to service debt
at all levels, personal, corporate, and government. End of story. All
the other exertions being performed in opposition to this basic
fact-of-life amount to a spastic soft-shoe performed before a
smokescreen concealing a world of hurt. If the “quantitative easing”(money creation) and fiscal legerdemain (TARPs, TARFs, et cetera)
happen to jack up the “velocity” of the new funny-money, and the world
resumes its previous level of oil use, the price of oil would rise
again — this time astronomically because the previous crash of oil
prices crushed the development of new oil projects to offset depletion
– and the global economy will crash again. Only the next phase of the
disease is liable to move beyond the financial and into the social and
political realms. Disorder of various kinds will rule — toppled
governments, civil unrest, international tension and conflict.

The
US is doing everything possible to avoid these awful realities, but
probably the worst self-deception is the idea that everything would be
okay if we could just “re-start lending.” That’s just not going to
happen. There is no more capacity to service the debt we’ve already
piled on. Americans borrowed too much, and the bankers who made obscene
fortunes in fees and bonuses in fraudulent lending managed to leverage
this unpayable debt into the greatest collective swindle the world has
ever known. The swindle has sent poison into every cell of the macro
socio-economic organism, and further swindles are unlikely to revive it.

The
rally in stocks, the financials in particular, could go on for another
month or two. In the meantime, banks are striving desperately to avoid
calling in more bad loans — especially in commercial real estate,
malls, strip malls, Big Box power centers — because they don’t want
any more losses on their balance sheets. That can only go on for so
long, too. Sooner or later the daisy chain of credibility in the
fundamental transactions of business lose legitimacy and something’s
got to give.

My guess is it will first take the form, sometime
after Memorial Day (but maybe sooner) of wholesale liquidations of
everything under the North American sun: companies, households,
chattels, US Treasury paper of all kinds, and, of course, the S & P
500. We’ll soon find out whether an organism the size of the United
States can run an economy based on one family selling the contents of
its garage to the family next door. My guess is that this type of
economy won’t support the standards of living previously enjoyed in
places like Dallas and Minneapolis.

The socio-political
fallout from the inherent anger and disappointment in all this is
liable to be severe. The public is already warming up for it, with
cheerleaders such as Glen Beck on Fox TV News calling for the formation
of militias, and gun sales moving out-of-sight. One mistake that the
banking elite and their lawyer paladins made the past decade was their
show of conspicuous acquisition — of houses especially — in
easy-to-get-to places where anyone can see them, for instance an angry
mob in Fairfield County, Connecticut, or Easthampton, New York. Unlike
the beleaguered elites of South Africa (where I visited recently), who
live behind layers of fortification, the executives of Citibank,
Goldman Sachs, J.P. Morgan, and a long list of hedge funds, will be
found cringing in their wine-lockers behind a measly layer of privet
hedge when the tattooed minions of Glen Beck come a’calling.

This could perhaps be avoided if someone in authority like US Attorney
General Eric Holder took an aggressive interest in the multiple
swindles of the decade past, and commenced some prosecutions. But the
window of opportunity for this sort of meliorating action may close
sooner than the government and the mainstream media believe. Social
phase-change, as in the formations of mobs, is nothing to screw around
with. Once the first window is broken, all bets are off for social
stability. My guess is that the various bail-out gifts to the bankers
are long past having gone too far in the eyes of this increasingly
flammable public. (04/09/09)
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Ellen Brown writes: We
are now met on another battlefield of that same economic war that
visited Lincoln and the Founding Fathers before him.

President Obama,
the fate of our economy and the nation itself may depend on how well
you understand Lincoln’s monetary breakthrough, the most far-reaching
“economic stimulus plan” ever implemented by a U.S. President. You can
solve our economic crisis quickly and permanently, by implementing the
same economic solution that allowed Lincoln to win the Civil War and
thus save the Union from foreign economic masters.

The bankers
had Lincoln’s government over a barrel, just as Wall Street has
Congress in its vice-like grip today. The North needed money to fund a
war, and the bankers were willing to lend it only under circumstances
that amounted to extortion, involving staggering interest rates of 24
to 36 percent. Lincoln saw that this would bankrupt the North and asked
a trusted colleague to research the matter and find a solution. In what
may be the best piece of advice ever given to a sitting President,
Colonel Dick Taylor of Illinois reported back that the Union had the
power under the Constitution to solve its financing problem by printing
its money as a sovereign government. Taylor said:

“Just
get Congress to pass a bill authorizing the printing of full legal
tender treasury notes … and pay your soldiers with them and go ahead
and win your war with them also. If you make them full legal tender …
they will have the full sanction of the government and be just as good
as any money; as Congress is given that express right by the
Constitution.”

The Greenbacks actually were
just as good as the bankers’ banknotes. Both were created on a printing
press, but the banknotes had the veneer of legitimacy because they were
“backed” by gold. The catch was that this backing was based on
“fractional reserves,” meaning the bankers held only a small fraction
of the gold necessary to support all the loans represented by their
banknotes. The “fractional reserve” ruse is still used today to create
the impression that bankers are lending something other than mere debt
created with accounting entries on their books.

Lincoln
took Col. Taylor’s advice and funded the war by printing paper notes
backed by the credit of the government. These legal-tender U.S. Notes
or “Greenbacks” represented receipts for labor and goods delivered to
the United States. They were paid to soldiers and suppliers and were trade-able for goods and services of a value equivalent to their service
to the community. The Greenbacks aided the Union not only in winning
the war but in funding a period of unprecedented economic expansion.
Lincoln’s government created the greatest industrial giant the world
had yet seen. The steel industry was launched, a continental railroad
system was created, a new era of farm machinery and cheap tools was
promoted, free higher education was established, government support was
provided to all branches of science, the Bureau of Mines was organized,
and labor productivity was increased by 50 to 75 percent. The Greenback
was not the only currency used to fund these achievements; but they
could not have been accomplished without it, and they could not have
been accomplished on money borrowed at the usurious rates the bankers
were attempting to extort from the North.

Lincoln
succeeded in restoring the government’s power to issue the national
currency. …

Today
we the people are starting to understand our banking and monetary
system, and we are shocked, dismayed, and furious at what we are
discovering. The wizard behind the curtain turns out to be a small
group of men pulling levers and dials, creating an illusory money
scheme that, behind all the talk and bravado, is mere smoke and
mirrors. These levers are controlled by a privately-owned,
unaccountable central bank called the Federal Reserve, which has
recently dispensed billions if not trillions in funds to its banker
cronies, without revealing where these monies are going even under
Congressional inquiry or in response to Freedom of Information Act
(FOIA) requests. As Chris Powell pointed out recently in conjunction
with an FOIA request brought by Bloomberg News, which the Fed declined
to comply with:

“Any
government that can disburse $2 trillion secretly, without any
accountability, is not a democratic government. It is government of,
by, and, for the bankers.”

There
was a time when private central bankers were the heavyweights in
control, able to run their ultra-secret agenda with impunity; but that
era is coming to an end. The bankers are scrambling, trying to patch up
their crumbling creations with schemes, bailouts and sleight of hand.
That effort, however, must ultimately prove futile. As investment
adviser Rolfe Winkler said in a recent article:

“The
great Ponzi scheme that is the Western World’s economy has grown so big
there’s simply no ‘fixing’ it. Flushing more debt through the system
would be like giving Madoff a few billion to tide him over. Or like
adding another floor to the Tower of Babel. To what end? The collapse
is already here. The question is: How much do we want it to hurt? Using
the public’s purse to finance ‘confidence’ in a system that is already
kaput may delay the Day of Reckoning, sure, but at the cost of
multiplying our losses. Perhaps fantastically.”

The
bankers are on the run, feverishly trying to use the collapse of the
current system to steer us toward an “Amero”-style North American
currency, or a one-world private banking system and privately-issued
global currency that they and only they control. We the people will not
accept those solutions, however, no matter how bad things get. We
demand real solutions that empower us, not enslave us.

Abraham
Lincoln had such a solution. President Obama, you can finally bring his
monetary solution to fruition. Manifest the vision of Lincoln,
Jefferson, Madison and Franklin, and we the people will make sure you
are placed in the pantheon of our greatest leaders and are revered for
all time. America’s greatest days can still be ahead of us; but for
this to happen, we need to expose and root out the deceptive banking
scheme that would enslave us to a future of debt and increasing
homelessness in this great country our forefathers founded. The time
has come for democracy to rise superior to a private banking cartel and
take back the power to create money once again. Such a transformation
would represent the most epochal and empowering shift that humanity has
ever seen. As you recently said:

“This
country has never responded to a crisis by sitting on the sidelines and
hoping for the best. Throughout our history we have met every great
challenge with bold action and big ideas.”

  Your words are a timely reminder of our long legacy of action and
bold solutions in the face of adversity. Can we do this? Yes we can. (04/09/09)
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BBC Environmental Science — Climate change experts in North and South America are increasingly worried by the potentially devastating implications of higher estimates for possible sea level rises. The Americas have until now been seen as less vulnerable than other parts of the world like low-lying Pacific islands, Vietnam or Bangladesh. But the increase in the ranges for anticipated sea level rises presented at a meeting of scientists in Copenhagen in March has alarmed observers in the region. Parts of the Caribbean, Mexico and Ecuador are seen as most at risk. New York City and southern parts of Florida are also thought to be particularly vulnerable.

The 2007 IPCC (Intergovernmental Panel on Climate Change) report suggested that sea levels would rise by between 19cm (7.5 inches) and 59cm by the end of this century. But several scientists at the Copenhagen meeting spoke of a rise of a metre or more, even if the world’s greenhouse gas emissions were kept at a low level.

Melting of the polar ice sheets is one of the main drivers behind the new estimates.

“A rise of one metre will irreversibly change the geography of coastal areas in Latin America,” Walter Vergara, the World Bank’s lead engineer on climate change in the region, told the BBC. “For example, a one-metre rise would flood an area in coastal Guyana where 70% of the population and 40% of agricultural land is located. That would imply a major reorganisation of the country’s economy.” Mr Vergara and other experts are also concerned about the effect on the large coastal wetlands in the Gulf of Mexico. …

New research led by Dr Jianjun Yin at Florida State University suggests that whereas South American coastal cities are not at threat this century from an extra sea level rise caused by Amoc, New York City and the state of Florida are.

New York would see an additional rise of about 20cm (7.8in) above the global mean due to Amoc by the turn of the century, according to Dr Yin’s research published this year in the journal, Nature Geoscience. Florida would experience less than 10cm (3.9in). “A one-metre rise could be a disaster for parts of Florida, particularly in the southern part of the state,” Dr Yin told the BBC. “Sea level rise superimposed on hurricane vulnerability makes for a very worrying situation.”

Mr Vergara is not alone in stressing that sea level rises are “climate committed”, in the sense that because of existing and projected greenhouse gas emissions, they will continue long into the future. “The level and direction of change will destabilise extensive coastal areas in Latin America. Once flooded, there is no way back,” he says.

Many scientists stress that it is not too late to mitigate the possible effects. “We need to reduce greenhouse gas emissions and to reduce coastal developments,” Dr Yin says. (04/09/09)
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BBC Technology — The Kyoto Box is made from cardboard and can be used for sterilising water or boiling or baking food. The
Kenyan-based inventor hopes it can make solar cooking widespread in the
developing world, supplanting the use of wood which is driving
deforestation.

Other finalists in the $75,000 (£51,000)
competition included a device for streamlining lorries, and a ceiling
tile that cools hot rooms. Organised by
Forum for the Future, the sustainable development charity founded by
Jonathan Porritt, the competition aims to support concepts that have
“moved off the drawing board and demonstrated their feasibility” for
reducing greenhouse gas emissions, but have not gained corporate
backing.

“The Kyoto Box has the potential to transform millions of lives and is a model of scalable, sustainable innovation,” said Peter Madden, the forum’s chief executive. It is made from two cardboard boxes, which use reflective foil and black paint to maximise absorption of solar energy. Covering the cooking pot with a transparent cover retains heat and water, and temperatures inside the pot can reach at least 80C.

As many as two billion people in the world use firewood as their primary fuel. The idea of cooking using the Sun’s rays has been around for centuries, and a number of organisations including Solar Cookers International are already supporting their manufacture and distribution in the developing world.

Reducing reliance on firewood reduces deforestation, but also improves the health and wellbeing of villagers who do not have to trek for miles collecting the increasingly scarce wood nor spend hours inhaling wood smoke, a major cause of respiratory disease.

What impressed the judges about the Kyoto Box was the potential for production to be scaled up significantly in a number of developing countries.

“It’s really the mass manufacturing aspect,” said Jon Bohmer, who founded the company Kyoto Energy in Kenya. “We can take existing factories like cardboard factories and begin to make thousands and thousands of the cookers each month,” he told BBC News. “So far, solar cooking has been a DIY project with people making them on their own in slums and so on; but this could be the Volkswagen, you might say.” (04/09/09)
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