When the 2008 financial crisis hit, Iceland had a very different response than the United States. Iceland let the big banks fail, nationalized them and prosecuted the bankers, sending 26 of the bank executives to jail for fraud and market manipulation.
In the US, no high level bankers were prosecuted and the big banks were bailed out through the Treasury Bailout and the Federal Reserve’s Quantitative Easing which bought bad debt burdening the big banks along with low interest rates. The weak response in the US has resulted in fraud and corruption by big finance continuing and we are facing an unstable market which many people predict will crash again within the year.
Bill Black of the newly formed Bank Whistleblowers United is interviewed about the plan they have put forward to instill the rule of law on Wall Street and end fraud with the hope of mitigating the effects of the next financial crisis. The plan they put forward could be taken by a president within 60 days without congressional action. It would instill the rule of law on Wall Street and end fraud with the hope of mitigating the effects of the next financial crisis.
We also spoke with Randall Wray, an expert in financial instability and macroeconomics, about alternatives to the current financial system that would bring greater stability. His focus is on Modern Money Theory which believes government spending on essentials like infrastructure, transition to clean energy, tuition-free college education and repaying the debts of students, among other things can be funded out of money created by the government. It believes in shrinking the role of the Federal Reserve to only setting interest rates in consultation with the President and Secretary of the Treasury while the Treasury Department has the power to create money. The government would be the creator of money, not the banks.
If the economic proposals described in this episode of Clearing the FOG were put into effect, Wall Street would be tamed and the people would regain control of the economy. They would be major steps toward creating an economy that will serve the people and not the wealthiest and the financiers.
You can listen to the episode here: