Bill Clinton’s Blood Libel of the American People

By William K. Black
April 17, 2016     Bloomington, MN

Hillary Clinton uses a rhetorical device that is too clever by half.  Whenever Bernie Sanders points out that she continues to take millions of dollars for her campaign and over $650,000 personally from the infamous “Vampire Squid” whose frauds caused the financial crisis she responds that this means that Bernie is attacking President Obama too, for in 2008 his campaign’s largest donor was those same Wall Street felons.  She then says that the Dodd-Frank Act proves that campaign contributions do not affect elected officials.  Her devotion to Wall Street funding and her statement that campaign funds have no effect help explain why she does so poorly in the polls on credibility.  As I explained in a prior column, academic research confirms what we all know from life – campaign contributions play a substantial role in the decisions of elected officials.  Indeed, even Paul Krugman’s lecture notes show that he agrees with this point.  (Disclosure: I am an adviser to Bernie on economics, regulation, and criminology.)

President Obama 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.  Obama’s characterization of the American people was a blood libel.  The American people do not want mob rule, we want justice.  We want the criminals prosecuted who led the fraud epidemics that caused the financial crisis prosecuted.

Did Obama’s record receipt of Wall Street funds matter?  Actions speak far louder than President Obama or Secretary Clinton’s words.  How many prosecutions has the Obama administration brought of the Wall Street elites that led the three most destructive epidemics of financial fraud in history?  Those are the epidemics of appraisal fraud, “liar’s” loans, and the subsequent resale of these fraudulently originated mortgages through fraudulent “representations (reps) and warranties.  The answer is zero.  How many of the systemically dangerous banks have been ordered by the Obama administration to shrink a level that they no longer endanger the global economy?  The answer is zero.  How many times has President Obama said that the crisis was driven by elite Wall Street frauds?  The answer is zero.  How many times has President Obama fired his Attorney General for failure to prosecute the elite Wall Street felons?  The answer is zero.

Krugman claims that the crisis was brought on only by the predatory loans of small, unregulated lenders in the “shadow” sector.  That is false, as I will document in detail in a subsequent article, but even if it were true it would pose an obvious question – how many “C” suite leaders of the “shadow” lenders has the Obama administration prosecuted?  The answer is zero.  “Shadow” lenders also made very large political contributions.

Hillary cannot even bring herself to use the words “fraud” and “predation” to charge Wall Street and shadow elites with their crimes.  Instead, she says that no one is too big to prosecute – even though the last decade has proven the opposite.  The most Hillary is able to bring herself to charge Wall Street’s felons with is “shenanigans” – which means “youthful pranks.”  Yep, Hillary thinks that Wall Street’s elite banksters were just a bunch of 14-year old males out on the equivalent of a “joy ride” in dad’s car.  Her refusal to denounce the elite fraudsters and their crimes demonstrates that she is unwilling to use even the most tepid words against them lest she and Bill lose their millions of dollars from their Wall Street patrons.  How is she going to actually prosecute the elite Wall Street criminals and break up the systemically dangerous Wall Street banks if she cannot even bring herself to condemn their fraud epidemics?

Fortunately, Bill Clinton is the gift that keeps on giving.  He has just given a speech denouncing the Democratic Party’s base, the progressives who are the most loyal and strongest supporters of the Democratic Party.  He denounced them because a majority of progressives support Bernie.  His fiasco when he tried to claim that Black Lives Matter protesters were defending the murderers of black children because they objected to Hillary’s adopting and using the great slander about black “super predators” being sub human was an unscripted departure from his talk.  Bill’s slander of progressive Democrats, however, was clearly a “joke” he had rehearsed and was eager to deliver.

“One of the few things I really haven’t enjoyed about this primary, I think it’s fine that these young students have been so enthusiastic for her opponent and… sounds so good: ‘Just shoot every third person on Wall Street and everything will be fine,’” Clinton said at an event in New York.

Note that Bill hid behind the “joke” label to spread the innuendo that the base of the Democratic Party was a murderous mob suffused with hate for anyone who worked on Wall Street.  The truth is the opposite.  The base of the Democratic Party wants justice, which requires that no one is above the rule of law.  The Wall Street and shadow banksters have both been allowed to commit the most destructive financial frauds in history with total personal impunity.  That isn’t the fault of the American people, but of the leaders who have destroyed the rule of law when it comes to finance.  Bill Clinton was one of those leaders.

Please review, and if you agree, support the detailed plan of the Bank Whistleblowers United to restore the rule of law to finance.  BWU is a non-partisan group that asks the supporters of every candidate to ask him or her to pledge to implement the BWU plan and campaign pledge.

9 responses to “Bill Clinton’s Blood Libel of the American People

  1. I recall Timothy Gheitner also attacking those that want justice as wanting a pound of flesh along with his foaming the runway comments in an interview w Jon Stewart. Around the same time he and Chase CEO Jamie Dimon were making bible references that made me sick. Then we had the Chase report to the nun activist stockholder group that claimed Chase admitted it’s mistakes. All they’ve done is use non lenders like PennyMac to do their dirty work as in my case going through with illegal eviction after Chase failed to comply with settlements and laws for 7 years. This cancer is much worse than bad loans and securitization. Every agency and nearly every official is working off of same corrupt script.

  2. Johnny Garza

    Excellent post Mr Black. I was very pleased to hear you are Bernie’s economic advisor. Maybe you can bring your colleagues L Randal Wray and Michael Hudson along with you and Stephanie Kelton. You should consider speaking in one of Bernie’s rally’s and educate the public a bit about your expertise in how you would break up the banks. If anyone is qualified in doing this it would be you. I think it would go a long way towards making a case for Bernie as president.

  3. The MENA Mobsters were all about Arkansas as were the Industrial Development Banksters …… The Reality of Organised Crime in Arkansas makes the Chicago, Jersey, Pennsylvania, Texas, New York and Boston Mobs / LA Gangs ….. PALE ….. Florida and the Mormon Mafias TAKE NOTES ……. Oh and almost at the level of the Gangs of Indiana ……..

  4. Has one considered that no one has been prosecuted because government officials during the Clinton Administration “influenced” lenders to provide loans to those that should not have had them so ALL could have the American dream? The Bush Administration allowed the continuation of the fleecing and walla, we have a calamity, caused in large part by government officials FIRST, then spineless bankers wanting access to power and money. Another VOTE buying scheme at the expense of actual TAXPAYERS.

    • That’s the racist and blame the victim part of this. By blaming minorities and greedy, consumers who used their house like a credit card supposedly the middle class has been shamed and turned against each other instead of focusing on banks and their partners in crime in government. Mr. Black and Senator Sanders need to change the focus to derivatives and theft of homes. He partly does so here. The FBI, DOJ made it their mission to punish homeowners and small time mortgagers and brokers and even Bernie Madoff instead of the crime bossses.

  5. You have to admire Hillary. She says she’s a better statesman than Bernie because she knows how to compromise, to win gradual progress, to move us, practically & realistically, to increasingly better policies. But then she turns around and continually points to existing situations – Dodd-Frank, the accepting of donations and speaking fees which “everybody does”, Obamacare – as if they were perfection made manifest, and any criticism of them is a criticism of Obama, and therefore unreasonable, disloyal & wrong. But if Dodd-Frank is a compromise, a mere step along the road, then it needs to be criticized in the here-and-now, to have its shortcomings pointed out, so that better can be done in the future. Or Obamacare. If it’s a step along the road of progress, to be superseded by what comes next, then it’s not bad, I suppose. If it’s the last word in public healthcare for Americans in this generation, then the only solution is mass emigration. The point is, if these compromise, pragmatic, gradualist policies are really that, stages on the way, then they need to be criticized, and vigorously, if they’re to be improved, and it is no insult to their authors, who should in fact rejoice that people are building on and improving their work. But if they’re turned into something sacred and untouchable – Obama’s holy legacy – then they’re inadequate & useless. Worse than useless, since they actively impede real progress.

  6. 2brknot2bfree

    Bernie Sanders has been a politician since he held his first job as Mayor at the age of 40. Prior to that he had little, or no, work experience. How can someone who has been in politics almost half his life, and sat in on the legislation that he now denounces, claiim some higher morality? If it was wrong then, he should have spoken louder, but instead, he went with the crowd, because it advanced the Progressive agenda marching America toward a communist dictatorship, The only thing the ‘in power’ group does now is jockey for the top seat at the table when the ‘neo-king for life’ is inaugurated/crowned.

  7. According to Fannie and Freddie’s prior regulator, OFHEO: “At year-end 2001, five counterparties accounted for almost 60 percent of the total notional amount of Fannie Mae’s OTC derivatives, and 58 percent of Freddie Mac’s.” The report also notes that “The market for OTC derivatives is highly concentrated among a small number of dealers, primarily brokerage firms and commercial banks that are counterparties for at least one side of virtually all contracts. The largest dealers include JPMorgan Chase, Citigroup…Deutsche Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley Dean Witter.”

    According to a current report from the Office of the Comptroller of the Currency, those same banks (minus Deutsche and Lehman) account for the vast majority of derivatives in the U.S.

    Lehman Brothers filed for bankruptcy one week after the government placed Fannie and Freddie into conservatorship. Merrill Lynch was taken over by Bank of America the same week. If you’re looking for a potential list of names of Wall Street players that needed a quick bailout of Fannie and Freddie, the above list is an excellent start.

    Matt Taibbi reported at Rolling Stone three days ago that the government has been fighting a pitched battle to keep 11,000 documents pertaining to Fannie and Freddie under seal in a court case. You can rest assured that some of those documents relate to Fannie and Freddie derivatives and counterparties. But that pile of 11,000 documents pales in comparison to the 25 million documents the Justice Department withheld from the public when it settled its case against Citigroup in 2014 for $7 billion. What the public got instead was a meaningless 9-page statement of facts.