Steadfast Finances
A Personal Finance & Investing 101 blog that delves into current events, consumer education, and techniques to improve your bottom line.
Brooksley Born’s story: Fighting Wall Street, Rubin & Greenspan was a Bad Career Move
If you’ve never heard of Brooksley Born, you’re not alone. I followed the markets fairly closely in the late 1990s while this political battle over regulating the derivatives market was underway, and I honestly can’t remember hearing anything about it.
Like most people, I was probably too caught up with my JDS Uniphase and CMGI stocks doubling every month (e.g. the tech bubble) to care about something as trivial as credit default swaps and other esoteric derivatives. (Not like they would come back to bite taxpayers in the ass later.)
What intrigues me most about Born’s story is that she saw the danger of that most regulators and politicians didn’t see (or paid not to see), and quickly stripped of any regulatory power that she might have as head of the Commodities Futures Trading Exchange when she tried to defuse the bomb that would explode a decade later.
We’re trying to protect the money of the American public. Which is at risk in these [derivatives] markets. – Brooksley Born, Congressional testimony.
[RSS and email readers please click to site for video]
It’s just one more piece of evidence to prove that no matter how great we might believe the United States financial system is compared to the rest of the world, that the Old Boys Club on Wall Street will do whatever is in there best interest to keep the gravy train flowing… and cut out any cancer (or cure) that will make an attempt to ruin their plans.
A well deserved hat tip to PBS Frontline for their excellent work.
If you enjoyed this post, make sure you subscribe to my RSS feed, or follow me on Twitter or Facebook! Related Posts Related Websites
2 Comments
« Why Investing in Emerging Markets Can be Dangerous Next Post
Some Tech Bubble Stocks Finally Breaking Even after a 10 Year Wait »
Popular Posts
Should We Adopt a National Sin Tax on Junk Food to Reduce Obesity Epidemic?67
Visualizing How the Things You Own, End Up Owning You62
Living Beyond Your Means: School Bus Driver Losing Her $800,000 Home to Foreclosure46
Why Index Funds are Bad Investments39
10 Reasons Why Investing in Gold is a Bad Idea39
Blog RSS Feed
Follow Me on Twitter
4:23 am
Now you know why I’m so cynical about Wall Street.
What I came away with from watching “The Warning”, is that Greenspan and his Wall Street (and even regulatory) cohorts continually spout laissez faire economic principles, but when the “you know what” hit the fan in 1998, they go all out to convince the Plunge Protection Team that the government needs to bail them out or our economy will collapse.
After the taxpayers quietly save their asses that time, do you think that they would have changed their ways and heeded Brooksley Born’s advice? No way. They continue on the same laissez faire path, eliminating any opposition (Brooksley Born), until this current crisis.
What happens next? The same laissez faire group (now including Paulson) says that without another government bailout our economy will again collapse, and taxpayers are forced to come to the rescue. It’s been over a year now since the crisis started. Has there been any real regulatory enforcement or criminal prosecutions? No.
It doesn’t take a genius to figure out that the purpose of spouting laissez faire economic principles is to prevent any regulatory interference into their corrupt financial schemes.
Any reasonable person would also think that fraud of such magnitude against the American public would constitute immediate prosecution, but these people are still in power and still enjoying their riches at taxpayer expense. Who’s going to prosecute them, the politicians in their pockets? Yeah, right.
This cycle of corruption will continue until our economy actually does collapse and chaos ensues. I don’t know when that will be, but only another American Revolution (similar to the French Revolution) will change things.
FRONTLINE deserves the highest honors for revealing the heroic story of Brooksley Born. It’s a true shame that there aren’t more people like her in power.
[Reply]