Financial Crisis Causes: Report Blames Government Officials and Wall Street Execs

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>>> cause of the financial crisis they issued their final report. a scathing indictment of both government officials and wall street ut executives. the commission was composes of six democrat, four republicans. it dug deeply into the actions, and negligence of officials at regulatory agencies, investment banks, credit rating companies and mortgage lenders.

>> we concluded, first and foremost, that this crisis was avoidable, despite the express view of many in the circles of financial and political power the crisis could not have been foreseen, there were many, many warning signs that were ignored or discounted. we concluded that key policymakers, our government, was ill prepared for the crisis and inconsistent response added to uncertainty and panic.

>> the commission says bush and clinton administrations, the current and previous federal reserve chairman, and treasury secretary timothy geithner all bear responsibility for allowing this crisis to happen. and the commission warns, it could happen again. but the findings are tainted by partisan politics, as well. six democrats on the commission supported the conclusions while the four republicans dissented. joining us now, the host of msnbc’s dylan ratigan show, part of his “steel on wheels” tour, while he was driving that bus, he was sifting through hundreds of pages of this report. what do you think of it, my friend, based on results that have been out there so far?

>> reporter: simply, it confirms all of our worst fears, that you had wall street executives transferring risk into the american pension system and then when it blew up, they had bought insurance, the wall street executives had bought insurance that the garbage they were selling to america’s pensions was going to blow up, it did. aig was happy to collect the insurance money but didn’t have anything to pay out. so we all had to pay it in our tax dollars to pay off goldman sachs$3 billion that went into their bonus pool and across wall street. the bigger question for me, richard, it confirms, again, all of our worst fear, that wall street executives were gaming the system to pay themselves off. tim geithner, our treasury second, at the new york federal reserve, was directly participatory in moving $3 billion of taxpayer money from the government to aig, into goldman sachs, that the treasury secretary at the time was the former ceo of goldman sachs. the only question that remains, richard, a simple one, and that is, will we see prosecutions for the fraud, the accounting fraud, ratings agency corruption, the overall conspiracy and act of control fraud allowed financial executives to pay themselves billions of dollars? they took that mooney and gave it to politicians. the politicians changes the rules in order to allow them to do this. and they had the blackmail of threatening toe blit threatening obliterate every pension in america. where are the prosecutions?

>> the four republican whose dissented on this report, they say there’s a list of ten factors that are influencing what had happens during the crisis. these are some of them we’re putting up on the screen right now. global economic forces in general had a major part of what happened. what’s their thinking here?

>> reporter: you know, i have no idea. maybe they got a lot of money from bankers. this is not a matter of opinion. the credit default swap is a mathematical device created unbill clinton, advocated under larry summers with no supervision. the leverage requirements lifted under george bush to allow them to bet 100-1, that is a math mat cal fact, to say the weather was weird that day and this happened is fundamentally laughble. you don’t agree with what the — global inputs to what happened. you don’t agree.

>> you asked me as if it’s my opinion.

>> right.

>> reporter: this is a mathematical fact. this is not a political opinion. it’s preposterous. is he dead or not dead? no, no, he’s dead. that’s an observable fact. because lloyd blankfein is so close to the white house, $1 million contributor to the president a featured prominent guest at china state dinner, this is only $8 million study. they funded this with pennies. i think, if nothing else, it’s a call not just for prosecutions on the fraud, but prosecutions — excuse me the establishment of a fire walled investigation, fire walled from the white house, which is clearly too close to goldman sacks and goldman sachs we know a fire walled investigation to get names, numbers and file charges.

>> dylan ratigan, thank you so much. have a safe trip. “steel on wheels.” catch the show today. taking the tour to omaha central high school. highlighting innovation, education, and a new push to revolutionize how we teach our kids. that’s today at 4:00 p.m. eastern

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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