William K Black American Hero

William K. Black wrote about the Prompt Corrective Action Law in Huffington Post on February 23, 2009 in an article titled Why Is Geithner Continuing Paulson’s Policy of Violating the Law?

The Bill Moyers interview of April 3, 2009 catapulted both William K. Black and the Prompt Corrective Action Law into national awareness. I urge everyone to watch this interview as many times as individually necessary to fully understand the discussion.

Part 1

Part 2

Part 3

William K. Black began writing for Huffington Post on February 10, 2009 with an article titled The Audacity of Dopes where he says

Geithner’s gifts to the bankers that caused the crisis include: a unnecessary taxpayer bailout of “risk capital,” a massive coverup of their banks’ insolvency, gutting the proposed limits on executive compensation, and devising a “guarantee” mechanism designed to hide the expenses of the unprincipled bailouts from the American public.

to convey the extent of the fraud perpetrated at U.S. taxpayer expense. He goes on to indicate how this became possible due to the current structure of the financial services industry. In fact if we do not move to change things the fraud will continue because

Remember, executive compensation is not “merely” a fairness issue. Executive compensation and the compensation systems used for appraisers, accountants, and rating agencies were designed, and served, to create the perverse incentives and ethical rot that caused the ongoing financial crises by producing a “Gresham’s dynamic” in which fraudulent and abusive lending and accounting practices drove good practices out of the marketplace.

that forestalls efforts to redeem the status quo. We are faced with the very real possiblity that the state is irrevocably corrupt and that legal approaches alone will never win justice.

The concept of “control fraud” introduced by William K. Black, see e.g. When Fragile becomes Friable: Endemic Control Fraud as a Cause of Economic Stagnation and Collapse (pdf),

Individual “control frauds” cause greater losses than all other forms of property crime combined. They are financial super-predators. Control frauds are crimes led by the head of state or CEO that use the nation or company as a fraud vehicle. Waves of “control fraud” can cause economic collapses, damage and discredit key institutions vital to good political governance, and erode trust…

Economic theory about fraud is underdeveloped, core neo-classical theories imply that major frauds are trivial, economists are not taught about fraud and fraud mechanisms, and neo-classical economists minimize the incidence and importance of fraud for reasons of self-interest, class and ideology.

Neo-classical economics’ understanding of fraud is so weak that its policy prescriptions, if adopted wholly, produce strongly criminogenic environments that cause waves of control fraud. Neo-classical policies simultaneously make control fraud easier and more lucrative, dramatically reduce the risk of detection and prosecution by maximizing “systems capacity” problems, and encourage crime by making it easier for fraudsters to “neutralize” the social and psychological constraints against deceit and fraud. Thus the paradox: neo-classical economic triumphs produce tragedy…

which indicates why money should be handled as any other public utility instead of for the benefit of a handful of banksters.

Until that time in the indefinite future when we can trust government it behooves each and every individual to limit their exposure to the financial services industry and end dependency upon any business susceptible to their corruption.

This means you need to have control over your income. Control over your income only happens when you run your own business.

I will explore more benefits of creating an online business in future articles.