Share on Google Plus Share on Twitter 4 Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 1 (5 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   1 comment

General News

Cause of 2008 Financial Collapse Remains Lost on Corporate Chieftains

By (about the author)     Permalink
Related Topic(s): ; ; ; ; , Add Tags Add to My Group(s)

Well Said 1  
View Ratings | Rate It

opednews.com Headlined to H3 4/6/12

- Advertisement -


Cross Posted at Legal Schnauzer



A "banking guru" received a standing ovation this week when he told a group of Alabama business leaders that the federal government largely caused the 2008 financial collapse.
John Allison, former CEO of BB&T Corp., told the Birmingham Kiwanis Club that banks were not the primary culprits in the financial crisis. Instead, he placed the blame almost entirely on the federal government, drawing a round of orgasmic applause from the audience.
What should we make of this? Allison, a devotee of conservative icon Ayn Rand, has been making such comments  since at least October 2008, so his words aren't new. Allison now is a professor at Wake Forest University, meaning he carries some weight--but the railings of one misguided former banker should not concern regular Americans.
We should, however, be concerned that business leaders wildly cheered comments that are so clearly off base. That tells us that business elites in Alabama, and probably elsewhere, have ignored the real issues behind the worst financial crisis since the Great Depression. If banking types have not learned from their mistakes, they are likely to make them again--and that can be bad news for all of us.
BB&T bought Montgomery-based Colonial Bank, after its failure, in 2009. BB&T now is the eighth largest commercial bank in the country, and you would think its former leader might know what he's talking about. But you would be wrong. Here is the gist of Allison's message, as reported by al.com:

Former BB&T Corp. Chief Executive John Allison told Birmingham business leaders that banks were not primarily responsible for the financial crisis that left the nation's economy teetering in 2008.

- Advertisement -

In a speech, Allison conceded that banks made irresponsible loans that inflated the sub-prime lending bubble, but he said that bankers weren't the chief culprits of the crisis. He said government agencies were pressuring the lending industry to make risky loans.

He singled the Federal Reserve, the Federal Deposit Insurance Corp., and government-backed mortgage lenders Fannie Mae and Freddie Mac for blame.


Never mind that the bipartisan Levin-Coburn Report, which Congress released in 2011, found the following: "The crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."
High-risk financial products? Undisclosed conflicts of interests? The inability of the market to police itself? Allison had no interest in discussing those issues. Instead, he said the system needs "massive deregulation"--and he apparently said that with a straight face.
This was like throwing red meat to a pack of tigers on the Serengeti. Reports al.com:

After his speech, the Kiwanis Club audience gave (Allison) a standing ovation. Several people came up to him afterward and asked why he hasn't run for public office.

- Advertisement -

 

I live in Birmingham, Alabama, and work in higher education. I became interested in justice-related issues after experiencing gross judicial corruption in Alabama state courts. This corruption has a strong political component. The corrupt judges are (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon


Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Boy Scouts and the Horrors of Their "Perversion Files"

Bush vs. Obama on Spending: It's No Contest

Why Is Karl Rove Planning to Visit the Backwoods of Alabama?

What's the Real Story Behind Karl Rove's Divorce?

Is "Morning Joe" Scarborough a Murderer?

Rove Might Be Trying To "Pull A Siegelman" With Julian Assange

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
1 people are discussing this page, with 1 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)
The big banks are technicaly insolvent, the contin... by Kevin Kakareka on Friday, Apr 6, 2012 at 2:43:58 PM