Why not prosecute nonfeasant regulators?

Bank regulators referred 1,837 cases to the Justice Department in 1995. Starting in 2006, the average dropped to about 75 cases a year.


This is more “Nonfeasance” — that is what I accused the Greenspan Fed of doing in Bailout Nation. It is also what the Office of the Comptroller of the Currency did and what the Office of Thrift Supervision engaged in.

They did not do a bad job in the discharge of their duties. THEY REFUSED TO DO THEIR JOBS AT ALL. They simply refused to discharge their legal obligations, because the people in charge did not believe, philosophically, in regulations.

Randian philosopy provides a convenient rationale for criminality, doesn’t it? (Alan Greenspan was of course not a Randian at all as he constantly interfered with the markets.) This process has continued under Obama. The policy is hands off the big banks, because after all, the government must protect its investment with them, even if it hurts the rest of the country.

If you want to understand why the public remains so angry about the bailouts, these facts are merely frosting on the cake. The bailouts work to prevent the government from fulfilling its duties as prosecutors. Once they get in bed with banks, they refuse to do anything to “harm” that investment.

And the public gets angrier and angrier.

Clearly, this is corruption, and at the highest levels. Laws are deliberately not enforced so as to protect and enrich a tiny few who continue to loot the government, aided and abetted by that very same government.

  • Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for Rs10. The villagers seeing that there were many monkeys around, went out to the forest and started catching them.

    The man bought thousands at Rs.10 and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buyat Rs.20. This renewed the efforts of the villagers and they started catching monkeys again.

    Soon the supply diminished even further and people started going back to their farms.

    The offer rate increased to Rs.25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it! The man now announced that he would buy monkeys at Rs50! However, since he had to go to the city on some business, his assistant would now buy onbehalf of him. In the absence of the man, the assistant told thevillagers.

    Look at all these monkeys in the big cage that the man has collected. I will sell them to you at Rs35 and when the man returns from the city, you can sell it tohim for Rs.50.”

    The villagers squeezed up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!! !

    Welcome to the “Stock” Market!!!!! 😛


    • Our modern-day stock market casino has an added fillip to that fine scheme. After the assistant sold all the monkeys to the villagers, the man in the city would package monkey sales into securities then short them.

  • If I recall correctly, Time Magazine’s 1933 Man of the Year Benito Mussolini defined it, in Time Magazine, as Fascism – the wedding of the Corporation and the State.

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