Denninger: To Our Government -- You Must Act Now
Editor's Note: The author of the entry below links, in the course of his discussion, to a rant posted on a well-known racist site. The essay's author and this editor obviously do not endorse those views. However, this editor does believe that as the overall economic conditions in our country deteriorate, many fearful people will drift towards the siren calls of statism, racism, and other madness. Denninger wrote the piece as a warning, and it is included here at WRSA for the same reason.
Yesterday I wrote a letter to a number of House and Senate Committees, well-aware that the Congress is in recess. The impetus was learning that Congress intends to hold committee hearings on derivatives (gee, nice to have a hearing about closing the door after all the horses are gone!)
One of the key themes of that communication was that The American People are losing faith in government as a protector and arbiter of fair play and enforcement of the law - and that down this road lay severe, perhaps even critical danger for our republic.
I had absolutely no idea at the time I penned and sent that letter that the events I had feared would occur the same day. I thought we had weeks or months before the proverbial dark matter would impact the airmoving device.
But then yesterday afternoon, I read the following:
A senior federal banking regulator has been removed from his job after government investigators concluded that he knowingly permitted IndyMac Bancorp to present a misleading picture of its financial health in a federal filing only months before the California thrift was seized by regulators.
The Office of Thrift Supervision removed Darrel Dochow as director of its western region, where he was responsible for regulating several of the largest banks that failed or were sold in the past year, including Washington Mutual, Countrywide Financial, IndyMac and Downey Savings and Loan.
Dochow allowed IndyMac to count money it got in May in a report describing its financial condition at the end of March, according to an investigation by the Treasury Department's inspector general, Eric Thorson, which was described in a letter from Thorson.
In the late 1980s, Dochow had been the chief career supervisor of the savings-and-loan industry, and federal investigators later concluded he played a key role in the collapse of Charles Keating's Lincoln Savings and Loan by delaying and impeding proper oversight of that thrift's operations.
Dochow was shunted aside in the aftermath and eventually sent to the agency's Seattle office. Several of his former colleagues and superiors have said that he gradually reestablished himself as a credible regulator and again rose in the organization.
Let's be totally clear about what is being alleged.
The allegation is that Mr. Dochow was partially responsible for the collapse of the Lincoln Savings and Loan during the S&L crisis, and not only was he not fired from his position within the government but 20 year later he is alleged to have been involved in a conspiracy to falsely state IndyMac's capital position which could reasonably have been expected to have kept the OTS from seizing the thrift at that time.
That is, it is alleged that he got away with an act that, had a private party undertaken it, would have likely been a felony under US law (bank fraud, obstruction, etc) and not only didn't lose his job was then given supervisory authority (20 years later) in a second case where he is alleged to have done essentially the same thing by conspiring (with IndyMac!) to falsify their capital position - that is, falsifying an official document bearing on the condition of a federally-insured bank!
Now of course these are allegations at this point in time - but they are extraordinarily serious allegations. They join the list of dozens of other, similarly-serious allegations that have been raised over the last year and a half - and yet where are the official investigations, grand juries, and indictments?
Then last evening a topic was posted on my forum linking to one Hal Turner's blog, in which he said (this is not my speech - it is on the linked site - and yeah - it's shocking):
WARNING TO BANKING EXECUTIVES: If you do not return the bonuses, stock options and country club memberships bought with taxpayer bailout money, YOUR NAME AND ADDRESS will be made public in a manner designed to "incite" a reaction by the public. (Special emphasis on the word "incite!)You have until Friday, December 26, 2008 to return the money. There will be no negotiating, no obeying of court orders of protection, no way to prevent being dealt with harshly.I don't care about your employment contracts, I don't care about your civil rights and I sure as **** don't care about the law or the courts.You guys have ****ed this country for the last time. It's time for you to be paid back and I intend to see that you receive your payback.
I don't like this one bit, it is way beyond "polite discourse" (and IMHO quite possibly into a realm that one should not cross) but it is entirely predictable, and unfortunately, is unlikely to be an isolated incident.
Because an increasing number of people no longer have any belief that the government exists to prosecute crimes and convict crooks.
In fact, there is a rapidly-growing belief among the population that the government and its agents have turned into the felons.
There is an uneasy "chatter" in this general vein showing up, widely dispersed among the population, but I hear it both in online and offline conversations almost as a "backhanded" comment now - much like occurred when Nixon was caught doctoring the Watergate tapes.
The difference is that this time the people know their wallets are being robbed instead of a political party's documents ensconced in a file cabinet.
This had better not spread into a widely and strongly-held opinion, and there is in fact only one way for the government to stop that from occurring.
We must see indictments of the bankers and government insiders who were involved in creating this mess.
It needs to start happening right now.
We need a dozen Fitzgeralds (the Federal prosecutor going after Illinois' Governor), we need them today, and they must include in their investigations referrals to grand juries and indictments aimed at the people inside these regulatory agencies where appropriate - that is, everyone who was involved in any form of fraud related to this mess.
I don't care if they're a banker, a broker, a Treasury Secretary, an OTS or OCC official, an SEC employee or a Congressperson. Each and every one of the people involved need to be investigated, if appropriate indicted, arrested and see the Rule of Law imposed upon them, right here, right now.
Because if this doesn't start happening very soon there is a very real risk that the meme that is now starting to take hold - that our government is in fact the felon in chief - will spread and reach critical mass within the population.
We cannot - and must not - have that happen, for once it does the societal consequences that flow from that belief cannot be stopped.
There is only one way to stop the progression of this belief through society and that is for the government to prove to the citizenry that it will enforce the law even when the people who have to be arrested, charged and jailed are government employees and "favored" powerful individuals who have been robbing the public for over a decade.
We are running out of time and what I want for Christmas is for our government to show the citizens of this great nation that it is not the felon and the people who are the felons will be indicted, arrested and prosecuted to the fullest extent of the law - no matter who they are.
If our government does not do this, and do it fast, then may God have mercy, because I am absolutely certain we will need it.
Alea iacta est.