“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.”With those words last evening, Charles Ferguson, the winner of the Academy Award for Best Documentary for his film Inside Job, did a lot more than merely begin an acceptance speech. Ferguson touched the third rail and made a political statement. But did he really? Really? Not in my opinion. Ferguson spoke the truth.
When did the mere voicing of the truth become political? Perhaps in America 2011 those who speak the truth actually stand out because we hear so little of the prized virtue. That reality is a sad commentary on our society.
I commend Ferguson. Backstage he had even more to say.
Reuters reports, Financial Meltdown Documentary Wins Oscar:
Ferguson, a self-described “policy wonk” with a doctorate in political science, interviewed fund managers, central bankers and political advisers for his film, which uncovered an uncomfortably close professional relationship between academia and hedge funds.
But not everyone was willing to subject themselves to his pointed questions, including key players like Henry Paulson, the former CEO of Goldman Sachs and Treasury Secretary at the worst moments of the economic implosion.
He also expected more from the new government.
“The biggest surprise to me personally and biggest disappointment was that nobody in the Obama administration would speak with me even off the record — including people that I’ve known for many, many years,” Ferguson said backstage.
He believes Americans, who lost homes and jobs in the millions because of shady mortgage lending and bank collapses, are disappointed that “nothing has been done.”
“Unfortunately, I think that the reason is predominantly that the financial industry has become so politically powerful that it is able to inhibit the normal process of justice and law enforcement,” said Ferguson.
Please ponder this final statement for a minute. Is this the nation we want for our children?
Ferguson reiterates a common theme here at Sense on Cents. Technically, this theme is embodied by the term regulatory capture within the financial industry. Evidence is overwhelming that the industry has captured its regulators or, as Sense on Cents has often defined it, the two crowds on Wall Street and Washington have engaged in a deeply incestuous relationship.
Despite the trauma our nation has experienced, we see little evidence of this incestuous activity ending. Why? Why won’t the media take it on? Why won’t the new Congressional representatives take it on? Will it take an even larger crisis to end this incest?
Whom does America need to hear extensively from on this topic of regulatory capture? Sense on Cents is calling on the following individuals to address this topic IN DEPTH. They can address the body of work compiled in Sense on Cents/ Wall Street-Washington Incest.
1. Treasury Secretary Timothy Geithner
2. Federal Reserve Chair Ben Bernanke
3. Former Treasury Secretary Henry Paulson
4. Former Fed Chair Alan Greenspan
5. SEC Chair Mary Schapiro
6. CFTC Chairman Gary Gensler
7. Senators Dodd and Schumer, Congressmen Frank, Issa, and Baucus, and every other representative of the House and Senate Banking and Finance Committees for the last decade.
8. Former SEC Chair Christopher Cox
9. FINRA Head Richard Ketchum
10. JP Morgan CEO Jamie Dimon
11. Goldman Sachs CEO Lloyd Blankfein
12. Morgan Stanley CEO James Gorman
13. Credit Suisse CEO Brady Dougan
14. Bank of America CEO Brian Moynihan
15. President Barack Obama
There is no way this list is comprehensive, but it will certainly make for a good start.
Let’s stop with the bull$#*t!! America needs and deserves total truth, transparency, and integrity.
Unless and until the regulatory capture, that is the Wall Street-Washington incestuous relationship, is exposed and ended, I believe capitalism will never truly rebound and our nation as a whole will suffer. You think I’m exaggerating? Anything but. Why is that? When capital and investors are not properly protected, they will flee. When taxpayers are not properly protected, they grow angry.
What do I envision as the ultimate cost of all this incest? Higher interest rates. As the US Treasury needs to finance an ever growing deficit, the rate of interest it will need to pay will trend ever higher. Who pays? You know who pays. The American taxpayer.
You reap what you sow.
On that note, here’s to the United States of America. Who’s with me? Who needs to be added to the above list and questioned in publicly held, nationally broadcasted Congressional hearings?
Thank you and congratulations, Charles Ferguson.
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own and not those of Greenwich Investment Management. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.