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TREAT THE FINANCIAL CRISIS AS A CRIME STORY

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This decriminalized environment was promoted through the expenditure of hundreds of millions of dollars for lobbying legislators and campaign contributions. There was extensive collusion between the financial services industry and politicians of both parties.


Cutbacks in government monitoring of financial practices became the norm with fines and "settlements" in (with some exceptions) replacing vigilant oversight and the prosecution of wrongdoers at the federal and state level. Fraudsters were primarily punished with fines businesses paid as a cost of doing business.


These practices, aided and abetted by cutbacks in the budgets of agencies that monitored and enforced laws, meant that an open season on homeowners and investors had been declared. In 2004, The FBI warned of an epidemic of mortgage fraud but also acknowledged their own white-collar crime squads had been downsized when fighting "the war on terror" became the priority.


As conservatives dominated politics, laws were softened and courts soon looked the other way as a historically unprecedented transfer of wealth got underway. What were once considered criminal practices were now redefined as legitimate ways of doing business. Observers likeDenis Arvay commented in The Atlantic:


"This was criminal in any serious definition of criminality, but all perfectly legal in the lawyer-crafted vermin-nourishment clauses under which our economy was looted" The way that the banking industry recently gutted foreclosure-protection indicates the thieves are still running the show, with the help of a thoroughly corrupted government."


This deeper story was also not as media accessible because it revolves around an unsexy finance-industrial labyrinth---of savvy computer-tethered mathematicians/quants and financial magicians devising complex and hard to understand structured and bundled financial vehicles--derivatives, CDs, CDO's, credit default swaps and tranches etc.


This army of nerds was rarely flamboyant or even public about its endeavors despte the mansions and Masaratis they bought with ill-gotten gains. For years, their convoluted schemes were perceived as insider baseball, as exciting as a graduate economics seminar.


Boring, boring, boring.

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News Dissector Danny Schechter is blogger in chief at Mediachannel.Org He is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo Books) available at Amazon.com. See Newsdisssector.org/store.htm.
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