By William K. Black
Quito: April 28, 2015
This column was prompted by Charles M. Blow’s excellent column about the slanderous way that the term “lynch mob” is used by the right-wing to denounce Americans whenever we protest police violence against (primarily) people of color. The protesters want justice. They do not want to lynch anyone. The same is true of the American people’s demands that the banksters be brought to justice.
President Obama, however, began his term of office by slandering the American people who wanted him to restore the rule of law and bring the banksters to justice. Simon Johnson and James Kwak, the authors of Thirteen Bankers, cite Obama’s claim to the 13 bankers at the infamous March 31, 2009 meeting so close to the start of his term of office that he was all that was protecting them from the public’s “pitchforks” as the defining event of the administration on financial issues.
“We chose this meeting because it aptly symbolizes the solidarity between the new Obama administration and the major banks at the depths of the financial crisis and recession. Speaking with reporters after the meeting, White House press secretary Robert Gibbs said, “We’re all in this together,” a phrase repeated by multiple bank CEOs. This contrasted with the new Franklin Delano Roosevelt administration of 1933, which largely froze out the bankers, much to their chagrin.
This is also the meeting at which Obama said, “My administration is the only thing between you and the pitchforks.” This was the point at which the government had to decide if it would defend the financial oligarchy from populist outrage, or whether it would reform the financial system that brought us the financial crisis and severe recession. We do not think it was an easy choice. But ultimately Obama and his advisers chose to bet on the bankers they knew. The result has been even larger banks and an even more concentrated financial sector.”
The White House, hilariously, tried to spin this meeting as the President being tough on the bankers, but Johnson and Kwak easily saw through this early veil of PR. The administration’s own legal pleadings now admit that Obama was meeting with the leaders of many of the most destructive criminal organizations in the world, but he treated the CEOs as if they and the banks they dominated were the administration’s key allies – “We’re all in this together” was Obama’s catchphrase.
“The result” of Obama choosing the banking oligarchs as his partner was the complete destruction of the rule of law when it comes to the bankers who led the three great fraud epidemics (liar’s loans, inflated appraisals, and false “reps and warranties” in sales to the secondary market) that drove the financial crisis and the Great Recession. Those same fraud epidemics made the elite bankers even wealthier. Instead of receiving popular support the way FDR did, Obama created the circumstances in which Fox and the Koch brothers could create the Tea Party and the Democrats could lose control of the House and the Senate.
Obama cannot undo his tragic choice of the banking oligarchs over the people of the United States. But he could at least apologize to us for his slander that we wanted mob rule and the mass murder of the bank criminals. We wanted – and still want – justice. Obama’s administration has chosen to continue the Bush policy of eliminating the rule of law for the banking oligarchs (and even the banking small fry). That is unjust as even DealBook now admits, it has produced a “pattern” of “recidivism” of bank fraud by the officers controlling our most elite banks. It will cause our future financial catastrophe as entire generation of future banksters, selected for promotion by their criminal C-suite “mentors” because of their weak moral restraints, observes that their bosses continue to grow ever wealthier by defrauding with impunity.