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Published on Thursday, January 31, 2008 by CommonDreams.org

Memo to the FBI: Expand the Probe of

Economic Crimes
We Need a Special Prosecutor and a Democratic Party That ‘Gets
It’
by Danny Schechter

After dragging its G-Man heels for years, someone at the FBI has woken up and realized
that laws have been broken by the financial industry. Those violations are part of what
led to the economic abyss we are facing. The ever - vigilant bureau that blew its 911
probe has just announced an investigation of 14 unnamed mortgage companies involved
in a variety of scams. Talk about going after small fish.
In this week of football mania, what we know and they have yet to learn, is that if you dig
deeply, you will soon be playing in a Superbowl of corporate criminal complicity.
We need a special prosecutor, and some zealous investigators who know something
about white-collar crime waves. One suggestion: bring back former veteran FBI agent
turned whistleblower Christine Rowley, a recent TIME Magazine “Person of the Year,” to
head the taskforce. Rowley told me she used to work cases like this with the former
Rudolph Giuliani who once made a name for himself as the scourge of Wall Street crime
families. (Maybe it takes someone with a Mafia patrimony to know how to smell the
scammers and then use RICO anti-conspiracy laws to put them behind bars.) That was
before Rudy decided to join another mob-the Homeland Security fearmongers to cash in
on 911.
Today’s financial racketeers span the globe, and are not confined to a solo junior trader
at a French bank who lost over $7 Billion on trades. He was driven, he says, to make a
big bonus and with, he adds, the knowledge of all his overlords who now feign great
shock-SHOCK!-about what he, and in their view, he alone, did. There are even news
organizations in Europe who believe that the whole global financial crisis was the work of
one bad man. This sounds like a replay of the “lone assassin” theory that always pops up
after high profile killings.
To its shame, our media has once again not been in the lead on this vital story. It is still
not framing it in criminal terms. It is not investigating the role of institutions working
together-big banks, hedge funds, rating agencies, and the securities industry — making
superprofits with deceptive subprime transactions. That is, before their securitized
schemes blew up in their faces causing super-lossses and the writedowns of billions.
That, in turn, contributed to a larger economic meltdown that may go beyond being a
mere “recession.” The press seems to have no “institutional memory” about past
crashes and Enronesque scandals, or the way greed and unlawful activity regularly
makes for so much misery because it is the people who can least afford it who always
suffer the most. Pundits are better at doing post-mortems than insuring accountability
with hard-digging watchdog journalism.
So where’s the editorial outrage, where are the calls for the prosecutions of the
fraudsters? As Pam Martens explains on Counterpunch, “Mainstream media has also
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been implanting the idea that it’s all about homeowners and mortgage loans instead of
banksters hiding bad debt.” So there is a trust issue with media as well as the financial
overlords. Forbes admits: “This predicament of trust ceased to be a subprime crisis long
ago. We face a global credit crisis…”
Mike Whitney puts the problem in a nut shell: “The financial system has been handed
over to scam-artists and fraudsters who’ve created a multi-trillion dollar inverted
pyramid of shaky, hyper-inflated, subprime slop that they’ve sold around the world with
the tacit support of the ratings agencies and the US political establishment.”
Understand the relationship here. Policymakers addicted to right-wing ideology allowed
this crisis. A lack of oversight and regulation enabled. Full Stop! No wonder the bankers
meeting in Davos at the World Economic Forum are blaming the Bush White House and
its so-called “free market” economic policies for bringing down the “free market.”
The decisions of the Federal Reserve Bank-which was warned about a predatory lending
disaster and did nothing-was a big part of the problem and its latest round of rate cuts is
likely to make matters worse as inflation rises and the people who need help the most
don’t get it.
This underscores the old truth that the “masters of the universe” recognize. As much as
they protest restraints on their unscupulous endeavors, they know that regulations and
rules in the marketplace are needed to keep them from killing each other off. Without
oversight, in the words of the poet, “the centre does not hold” and “things fall apart.”
Of course, finger-pointing bankers rarely blame themselves for anything, even now as
they dissemble and downplay their losses while laying off thousands of employees
adding to the unemployment lines. Almost every big brand name bank has been
complicit in a subcrime scheme.
Many of the smartest minds in finance are worried that this train wreck can’t be stopped.
George Soros calls it the worst crisis in 60 years and fears worse to come. Writers are
even invoking the worries of top conservative economists like Ludwig von Mises who
said: “There is no means of avoiding the final collapse of a boom brought on by credit
expansion. The question is only whether the crisis should come sooner as a result of a
voluntary abandonment of further credit expansion, or later as a final and total
catastrophe of the currency system involved.”
“Total Catastrophe?” Yikes.
And what about the politicians? Most have been silent while still taking donations from
the FIRE combine. FIRE stands for the three industries funding much of our politics,
Finance, Insurance and Real Estate. They are now trying to put out a financial wildfire
with a pathetic bucket brigade in the name of economic “stimulus.”
To do “something,” the Democrats in the House have passed a measure that everyone
knows is a joke, And what they are doing is going along once again with Bushevik
policies to reward the greedy and those with the least pain.
What’s left of the left, or “progressive” world is also largely silent as if economic justice
has not always been at the center of the fight for a better world. There has been little
direct action to stop massive foreclosures with blockades at home auctions or campaigns
for debt relief?
Why can’t the next big anti-war march in March on the 5th anniversary of the Iraq attack
not broadens its focus to include the way war spending has contributed to the economic
decline, and that, condemn the the media for boostering the occupation, and awaken a
new fight for economic change to challenge all the candidates and Wall Street.
And to return to the Fee Bee Eye: You want to see real terror and homeland insecurity?
Visit any town and most homes in this country as the economic sqeeeze made worse by
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high gas and food prices tightens its grip on the dreams and hopes of Americans of all
ages, colors and classes. As the larger bill comes due, many of us can barely pay our
endless loans and credit card bills.
Raids on Wall Street firms and a serious global investigation can’t solve the deeper
problem, but it sure would be a good start.

News Dissector Danny Schechter wrote SQUEEZED, an e-book chronicling the crisis and
calling for better media coverage. He is also “blogger-in chief” of Mediachannel.org, His
new film is IN DEBT WE TRUST: America Before the Bubble Burst (Indebtwetrust.com)
Comments to Dissector@mediachannel.org