by Pam Martens and Russ Martens, Wall St on Parade:
Who could blame the researchers at the Government Accountability Office (GAO) for thinking that responding to Congressional requests for studies on how to repair the nation’s ineffective maze of financial regulation is an exercise in futility. GAO has been spending boatloads of taxpayer money for the past two decades to define the problems for Congress as our legislative branch has not only failed to take meaningful corrective measures but actually made the system exponentially worse through the repeal of the Glass-Steagall Act in 1999.
During the 20 years that GAO has been warning about an ineffective financial regulatory system, taxpayers have been looted through a nonstop series of massive Wall Street frauds: the Nasdaq price fixing scandal; the rigged Wall Street research scandal leading to the $4 trillion dot.com bust; the four-decade Ponzi scheme of Bernie Madoff that was defined in meticulous written detail to a deaf and blind SEC by Harry Markopolos years before Madoff’s confession; and the epic Wall Street collapse of 2007-2009 that took down the entire U.S. economy in the biggest bust since the Great Depression. (Those are just the major milestones. For a look at what just one bank, JPMorgan Chase, has been up to in just the past four years, check out this chronology; or this Citigroup rap sheet. )
And what did Congress do after the 2008 crash to fix the problem? It handed even greater oversight powers to the regulator that didn’t see the crash coming and that had defied Congress by secretly funneling over $13 trillion in below-market-rate loans to teetering Wall Street banks – including at least one that was insolvent at the time (Citigroup). We’re talking about the Federal Reserve – the agency that still has no Vice Chairman for Supervision of Wall Street banks as required under the homage-to-Wall-Street law known as Dodd-Frank, passed over five years ago.
Why the Federal Reserve, the nation’s central bank, which has a monetary policy mandate, should also be in charge of supervising the behemoth Wall Street banks’ (especially when it abysmally failed in that job leading up to the crash) has yet to be explained to the American people.
GAO is a nonpartisan agency that investigates matters requested by members of Congress to determine if taxpayers’ money is being spent in the most effective manner. All one has to do is take a quick look at the graphic below that came with the latest GAO study on the “complex and fragmented” structure of the U.S. financial regulatory system to understand that this mess exists because that’s the way Wall Street wants it to exist. A fragmented system of silos allows Wall Street to continue to loot the public with impunity by gaming the myriad loopholes in the system. And allowing an industry with this serial history of crime to run its own private justice system is like giving the Mafia their own courthouse.
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