PAUL JAY: Welcome to The Real News Network.
I'm Paul Jay in Baltimore.
Career-limiting gestures--that's when someone stands up at work, or someone who works in
government, or even academia, and stands up on principle and takes a stand against those
in power, and does so knowing it will limit or even perhaps destroy their career.
Well, if you do that today, you're supposed to be naive.
Well, now joining us, if that's true, is one of the more naive people in America, and his
name is Bill Black.
Bill is an associate professor of economics and law at the University of Missouri-Kansas
City.
He's a white-collar criminologist and former financial regulator.
He's the author of the book The Best Way to Rob a Bank Is to Own One.
And he's someone who very recently went public with a dis-invitation from a session being
organized by Congress.
Hi, Bill.
Thanks for joining us again.
WILLIAM K. BLACK: Thank you.
JAY: And Bill's in Washington with a little more time on his hands than he expected.
So, Bill, what's the story?
BLACK: Well, I was invited to be part of a panel that was supposed to be a bipartisan
effort, organized in the House, to brief members of Congress on financial derivatives.
And I accepted the invitation to come to the panel.
And when I accepted it, they informed me that I was no longer invited.
But, of course, we had already booked the plane and the hotel and such, which is not
refundable.
So this was a bit startling.
JAY: And you went public with this.
You wrote an initial blog where you actually made the email trail public, deleting some
of the personal names.
And then today, I guess, you released a much longer piece about the importance of career-limiting
gestures and the kind of political pressure and toxicity in Washington now that--such
that you would be disinvited because what you believe was they thought you'd be too
critical of the banks.
So what is your take on why they asked you not to come?
BLACK: Well, what they wrote was it was fear of bank-bashing.
And a consensus had been reached between the parties on balance, and that if I were added
to the panel, I would violate that consensus.
So--and it also used the word fear of being confrontational in connection with the bank-bashing.
Now, to state the obvious, if the problem is so-called balance, if I'm added to the
panel, you add somebody else to the panel and you have your balance.
I'm not sure what dimension this is supposedly being balanced on, because I'm already balanced.
I've appeared five times before Congress to testify on a range of issues, including before
the Senate on financial derivatives.
Three of the times I was named by Democrats, two by Republicans, the two most recent times.
You can't get any more balanced than that in five invitations, three and two.
And I have a whole history over 30 years of--well, you know, for example, I'm known for being
the person who blew the whistle on Speaker Wright, one of the most prominent Democrats.
Four of the five senators that we blew the whistle on who were part of the Keating Five
were Democrats.
And I'm a Democrat, but, of course, not a terribly political Democrat at all.
So it's hard to believe I would have created any balance issues, since I'm the most balanced
person who was invited to the entire panel.
JAY: So talk a bit about more who's on the panel and what was the panel supposed to be
doing, and then why wouldn't they want to hear from you.
But start with exactly what it was.
BLACK: Well, it's supposed to be a briefing on financial derivatives, and, you know, it
appears that this was going to be first in a series of them.
And it appears that this one is [prompted] by concerns raised by JPMorgan's two--now
three (at least, and growing) billion dollar loss on financial derivatives.
The panel consists of people who, you know, I think all should be [invited] and it does
have some very conservative folks from--the Cato Institute has a representative from the
industry.
It has a number of other people who worked in the industry.
But it doesn't have have--well, it doesn't have any criminologists, even though I'd say
that that's the leading area of expertise you need to understand the role of financial
derivatives in the crisis.
It doesn't have anyone that actually served as a regulator, in the normal sense of the
word, that they were out, you know, helping to supervise or examine, or taking enforcement
actions, or closing places, or suing them.
It doesn't have anyone who's ever [led] a re-regulatory effort.
You know, a whole host of things it doesn't have, and I was the obvious person on that
panel that was going to provide those perspectives.
The thing that really concerns me is not the dis-invitation, per se, but the reason for
it of the bank-bashing.
And the idea--.
I mean, now let's step back for a second.
I'm an associate professor at a third-tier university in the flyover states, the University
of Missouri-Kansas City.
Now, we actually have a superb economic department, but none of those people know that.
And the idea that the top members of the industry, who make, you know, $10 million a year, would
be too afraid to appear in a session briefing Congress if I was there giving contrary facts,
I mean, if that's true, then that tells you more than you need to know about why capitalism
in America has self-destructed, 'cause, you know, if they're afraid of me and petrified
in their bones about bank-bashing, they really can't take on the competition among other
bankers anywhere in the world.
JAY: Now, the email back and forth, which you published, one of the emails, kind of
from this chief of staff of the person who--of the congressional member who organized all
of this--you don't actually mention his name, but I suppose it wouldn't be hard for people
to go figure it out--anyway, he holds out for you.
He says, you know, it wouldn't work for this panel, but we're planning another one soon,
and we're going to invite you and Michael Greenberger, and we'll be reaching out to
you soon.
But in the piece you wrote as a follow-up, you said this kind of carrot is the way they
kind of deal with these things and that part of standing up on these issues of principle
is you can't kind of be taken in by this kind of carrot.
What did you mean?
BLACK: Yeah, that's exactly it.
And, indeed, he called me out this morning to ream me out for a substantial phone call.
And that's the job of the chief of staff.
Everybody understands that.
But his point was it must be all ego on my part, and to me it's exactly the opposite.
The ego is precisely the bait.
You know, hey, if you play along, you'll get invited to these kinds of things.
And as he made clear on the phone call today, if you do what I did, you're not going to
get invited to the Hill to do these kinds of things.
And you have to say, I don't care.
You have to be the opposite of ego in the way he talks about it.
JAY: Hence the term career-limiting gesture.
BLACK: Hence yet another career-limiting gesture.
And I would plead guilty to being someone who has committed many CLGs.
JAY: Now--but you do point out in your article that the congressperson who's organizing all
this you think actually has some intent about reform and has been one of the better people
on the Hill about this.
BLACK: Absolutely.
And indeed--.
JAY: Who are we talking about?
This can't be hard to figure out.
Who's the congressperson we're talking about here?
BLACK: I have--no.
I mean, the reason I didn't name them is it's not about the individuals.
It's not about, you know, anything personal.
It's about the fact that one of the most progressive members of the Congress is not permitted to
have me as a witness because the industry has a veto.
And the industry has a veto because anybody that criticizes them is--potentially falls
into this bank bashing category.
And when we censor, as progressives, in that fashion, when we give in to that, there is
no real debate anymore.
This is not an insult to any of the members of Congress, to the Chief of Staff, or to
the other panelists, who are fine people.
But this sends the worst conceivable message, and it does so in the very first of the hearing,
where you're laying down the de facto rules to these things.
JAY: Is this a reflection or a small example of something far more deeper and profound,
and that is that there's been a kind of tipping point--and what I mean by that is if you look
back over, you know, at least since the 1930s, if not earlier, a sort of struggle within
the economic and financial political elite, between those forces who want to say there
has to be some control, mitigation over the role of finance in society or it does--it
spirals the whole economy into deep crisis, and those forces within the elite who simply
say, you know, we're worried about how much money we can make this quarter and back the
hell off?
Is there been a kind of tipping point where those forces that are only interested in today
and tomorrow's money and après moi, le déluge, have they kind of won, and in a sense that
real regulation may not be possible anymore and there needs to be something new, I mean,
a whole different kind of politics?
BLACK: To date they swept the field.
To date they caused the biggest financial crisis in 75 years, in which just the U.S.
household sector has lost $11 trillion, where Europe has been utterly devastated, where
6 million Americans lost their job, significantly more than that in Europe lost their job, where
another 6 million jobs were not created in America that would have been created (again,
similar in Europe), and absolutely nothing fundamental has changed.
And on top of that, you can't even criticize them for it.
If you have a fundamental criticism and say that the systemically dangerous institutions
pose an unacceptable risk to the global economy, that they must be shrunk to the point where
they no longer pose such a global risk, if you add to that--.
Look at the last crisis.
It was the SDIs, the systemically dangerous institutions, gambling and engaging in fraudulent
transactions in financial derivatives that caused the crisis.
And we have come out with a proposed rule, at this point, that would completely gut the
Volcker rule and allow the institutions to do exactly the same thing again.
I mean, what would it take in America to have a fundamental reform?
And, of course, it's not just America; it's Europe as well.
So, yes, if a newly elected president in the United States said what the newly elected
chief of state in France said, Hollande, you know, that I have an enemy and its name is
Finance, we would consider the American president a communist and probably shoot him on sight.
JAY: Thanks for joining us, Bill.
BLACK: Thank you.
JAY: And thank you for joining us on The Real News Network.