{"id":25985,"date":"2018-09-21T12:09:34","date_gmt":"2018-09-21T16:09:34","guid":{"rendered":"https:\/\/ssgreenberg.name\/PoliticsBlog\/?p=25985"},"modified":"2018-09-21T12:10:38","modified_gmt":"2018-09-21T16:10:38","slug":"de-regulation-de-supervision-and-de-criminalization-set-the-stage-for-the-2008-financial-crisis","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2018\/09\/21\/de-regulation-de-supervision-and-de-criminalization-set-the-stage-for-the-2008-financial-crisis\/","title":{"rendered":"De-Regulation, De-Supervision, and De-Criminalization Set the Stage for the 2008 Financial Crisis"},"content":{"rendered":"<p><em>The Real News Network <\/em>has this great series of videos <a href=\"https:\/\/therealnews.com\/series\/de-regulation-and-de-criminalization-set-the-stage-for-the-2008-financial-crisis\" rel=\"noopener\" target=\"_blank\">De-Regulation and De-Criminalization Set the Stage for the 2008 Financial Crisis<\/a>.<\/p>\n<blockquote><p>\nWhite collar criminologist Bill Black analyzes how the U.S. got into the 2008 financial crisis and what it means that we have not learnt the lessons from that crisis 10 years later, on the anniversary of the Lehman Brothers collapse\n<\/p><\/blockquote>\n<h3>Part 1<\/h3>\n<div style=\"text-align:center\">\n    <iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube-nocookie.com\/embed\/DVVfuMRqE9c?rel=0\" style=\"border: thick ridge #009900;\"  allow=\"autoplay; encrypted-media\" allowfullscreen><\/iframe>\n<\/div>\n<blockquote><p>\n<em>BILL BLACK: <\/em>OK. So the crisis doesn\u2019t begin with Lehman. Lehman dies because of the crisis. So the crisis became that bankers didn\u2019t trust bankers anymore. And they didn\u2019t trust them for good reason, because bankers were lying to each other about the quality of assets. So Lehman, for example, did not have $600 billion in assets. Maybe it had $300 billion in assets. It was claiming to have $600 billion. And it didn\u2019t have $600 billion, roughly, in liabilities; it had liabilities of over a trillion dollars which it wasn\u2019t recognizing. Why? Because it was one of the leading sellers of fraudulent loans to the rest of the world. It sold hundreds of billions of dollars under false representations and warranties, and that\u2019s how you get these massive liabilities for these institutions that you\u2019ve seen in the lawsuits.\n<\/p><\/blockquote>\n<h3>Part 2<\/h3>\n<div style=\"text-align:center\">\n    <iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube-nocookie.com\/embed\/tN1DG0nrxkQ?rel=0\" style=\"border: thick ridge #009900;\" allow=\"autoplay; encrypted-media\" allowfullscreen><\/iframe>\n<\/div>\n<blockquote><p>\nBut good economics has a long said, and I mean since 1970 this has been the literature, that the key thing regulators need to do, and only regulators and the law can do effectively, is stop what is called a Gresham\u2019s dynamic in economics and criminology. And that\u2019s this: In a Gresham\u2019s dynamic, the cheater gains a competitive advantage. If that\u2019s true, then market forces become perverse, and they drive the ethical people out of business. Now, the obvious victim from these frauds is us, the consumer or the investor. But the less obvious victim is the honest competitor. And that\u2019s exactly what these frauds do. So when I told you that the appraisers gave their warnings, began giving their warnings, in 1998, when we could\u2019ve fixed this problem with zero losses, zero recession, zero failures, that\u2019s what they said, that the lenders were deliberately creating a Gresham\u2019s dynamic. They were blacklisting honest appraisers and sending all the work to appraisers that would inflate the value. Well, that makes no sense for an honest businessman, because the appraisal, of course, is your great protection against loss.\n<\/p><\/blockquote>\n<h3>Part 3<\/h3>\n<div style=\"text-align:center\">\n    <iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube-nocookie.com\/embed\/mlIq7jwjW1Q?rel=0\" style=\"border: thick ridge #009900;\"  allow=\"autoplay; encrypted-media\" allowfullscreen><\/iframe>\n<\/div>\n<blockquote><p>\nBILL BLACK: Well, obviously the economy is enormously stronger than in the depths of a great recession in terms of things like unemployment. But a couple of things. First, the estimated loss of GDP over the course of not just the Great Recession, but the very, very long recovery- this is economists- is $41 trillion.\n<\/p><\/blockquote>\n<p>Remember that our debt is in terms of money that our Federal Reserve Bank creates out of thin air. The lost GDP is in terms of the dollar value of real goods and services that nobody can produce out of thin air.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Real News Network has this great series of videos De-Regulation and De-Criminalization Set the Stage for the 2008 Financial Crisis. White collar criminologist Bill Black analyzes how the U.S. got into the 2008 financial crisis and what it means that we have not learnt the lessons from that crisis 10 years later, on the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-25985","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/25985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=25985"}],"version-history":[{"count":5,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/25985\/revisions"}],"predecessor-version":[{"id":25990,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/25985\/revisions\/25990"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=25985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=25985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=25985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}