Since taking office, Barack Obama, wittingly or otherwise, has headed the largest criminal enterprise in history – the mass looting of national wealth to enrich his Wall Street benefactors. He assembled a rogue economic team of Clinton/Robert Rubin retreads – to fix the current crisis they engineered.

In a March 13 article, author and former Republican strategist Kevin Phillips called them “recycled senior Democrats from the Clinton administration’s own tech mania, deregulation binge and stock bubble and crash of 1997-2000”, adding that Obama’s financial program involves “extending the mismanagement and pro-Wall Street bias of the 2008 Bush regime bailout.”

Phillips called Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke “hapless,” excoriating Bernanke’s ruinous misjudgments and, along with former Fed Chairman Alan Greenspan, “complicity with finance-sector malfeasance.”

He noted that former Treasury Secretary Larry Summers “is remembered for helping to block federal regulation of financial derivatives and helping to orchestrate the 1999” Glass-Steagall repeal, among his other “achievements.” He went down the list of key economic officials and trashed them all as the very types to be avoided, not appointed.

He noted that Bernanke was chairman of George Bush’s Council of Economic Advisers and added: “Imagine if FDR had retained Herbert Hoover’s chief economic advisor and loyal Republican Fed Chairman in 1933…. To think that the pussycat Fed can be turned into a saber-toothed regulatory tiger is a deception.” Worse still, ruinous economic policies “could prove fatal” if White House policies favor “Wall Street but not … the national economy or American people” – the very direction they’ve now taken.

In a follow-up April 7 article, Phillips highlighted “The Disaster Stage of US Financialization”, which he calls “a much grander-scale disaster than anything that happened in 1929-33. Worse, it dwarfs the abuses of debt, finance and financialization that brought down previous leading world economic powers like Britain and Holland”.

Today’s crisis represents “the bursting of the huge 25-year, almost $50 trillion debt bubble that helped underwrite the hijacking of the U.S. economy by a rabid financial sector” and “a global realignment in which the United states loses the global economic leadership won in World War Two.”

“The ignominy deserved by Wall Street after 1929-1933 is peanuts compared with the opprobrium the US financial sector and its political and regulatory allies deserve this time.” Financialized America radically transformed the country, now “doubly staggering because of the crushing burden of its collapse.”

Yet major media pundits and reporters barely noticed and now claim relief is just a few quarters away – ignoring a metastasizing cancer, a national disaster, while policy makers heap fuel on a raging blaze now consuming us, yet too little public rage confronts them.

A Former Insider Speaks Out

Economics Professor William Black is a former senior bank regulator and Savings and Loan prosecutor, currently teaching economics and law at the University of Missouri. In an April 13 Barrons interview, he referred to “failed bankers giving advice to failed regulators on how to deal with failed assets” they all had a hand in creating and proliferating.

His conclusion: “How can it result in anything but failure?” He called the scale of financial fraud “immense” and said “Unless the current administration changes course pretty drastically, the scandal will destroy Barack Obama’s presidency,” besides what it’s doing to the country, global economies, and many millions of people here and abroad.

He scathed Summers and Geithner, both “important architects of the problems,” and the latter as a failed and dishonest regulator, yet “numbering himself among those who convey tough medicine when he’s really pandering to the interests of a select group of banks”. No need to mention which ones.

The law mandates corrective action, the kind FDR took in the 1930s. “He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent.” They’ve turned taxpayers into “the sucker” who’ll pay dearly for decades, maybe generations.

His refusal to put insolvent banks into receivership, resorting to deceptive language like “legacy assets,” and pursuing the worst of Chicago School economics “is positively Orwellian…. If cheaters prosper, cheaters will dominate. It’s like Gresham’s law: Bad money drives out the good. Well, bad behavior drives out good behavior, without good enforcement.”

His bailout plans are disastrous. They prop up “zombie banks by mispricing toxic assets…. The last thing we need is a further drain on our resources … by promoting this toxic-asset market”, the “notion of too-big-to-fail”.

With most, perhaps all, the big banks “insolvent” (a polite term for “bankrupt”), what’s going on is “a multi-trillion dollar cover-up by publicly traded entities, which amounts to felony securities fraud on a massive scale.

“These firms will ultimately have to be forced into receivership, the management and boards stripped of office, title, and compensation.” What’s needed is a 1930s-style Pecora investigation to get to the bottom of their fraud, deceit, and cover-up, along with government complicity to hide it (more on that below).

Black cited billions to AIG as the single worst abuse so far – to bail out their counterparties like Switzerland’s UBS at the same time we were prosecuting it for tax fraud. As bad was following Goldman Sachs’ advice to direct a $13 billion counterparty windfall to itself.

The whole process reeks of corruption. It must be stopped, and a new direction instituted under a reformist economic team – one that will admit the nature and depth of the problem, cut the tie to Wall Street, and take corrective action the law mandates. That’s “precisely what isn’t happening.”

Washington is “wedded to the bad idea of bigness” and power of Wall Street. In today’s America, financialization is predominant. It’s a cancer eating away at the fabric of the nation and many millions affected, the result of the grandest of grand thefts.

A good start would be to break up the financial giants into more effectively managed and less powerful units – maybe the way Standard Oil was dismantled through a simple share spinoff. In addition, “a new seriousness must be put into regulation,” and a new resolve to enforce it.

Today, the whole system encourages fraud, one based on results at any cost, so “fudging the numbers” becomes de rigueur and global bigness the Holy Grail. It sends the wrong message – play or pay with your job and future on Wall Street. “The basis for all regulation and white-collar crime is to take the competitive advantage away from the cheats, so the good guys can prevail. We need to get back to that.”