Next Step for the Senate Banking Committee: Send in the Auditors
I heard a report on NPR of the Senate Banking Committee looking into the massive foreclosure fraud perpetrated by the banking community. They had a clip of a Bank of America spokesperson saying that their procedures for identifying properties to be foreclosed were correct, the implication being that however flawed the process might have been that followed, the foreclosures themselves were justified.
Attention, senators: Don’t take her word for it. Deploy auditors *now* and find out whether she was right or not. If not, have her charged with perjury and locked away for the maximum sentence. Taking testimony in these hearings is useless if the facts are not checked.
The challenge, apparently, is that supervisory institutions failed to fulfill their basic duties.
The Federal Reserve failed to detect “conflicts of interest” [not the technical term] between divisions of large financial institutions. The Securities Exchange Commission failed to ask the routine questions about reserves against possible failure; it allowed standards to be set by a short time series in which few defaults took place, in stead of traditional forty year analysis. Record-keeping failures had been brought to U.S. Attorneys’ attention [at least in 2001 and 2002]; “pressure” seemed to deflect any inquiries.
The Bush Administration refused to accept Adam Smith’s warning that businessmen will cheat if not regulated — and they, themselves, benefit from honest markets.
The pathology slowly emerging over derivative markets and mortgage practices requires strong legal and regulatory action. The last US election suggests that we Americans don’t have the common sense to restructure failing market structures.
It can be argued this goes back to Pres. Carter’s declaration of the “Moral Equivalent of War”.
The American people surrendered [in the 1980 election, especially].
We may be facing a political-ecological “collapse”.
Sam! Good to make your acquaintance again. And that’s a spiffy comment, too.