The government's entire strategy now – as during the S&L crisis – is to cover up how bad things are ("the entire strategy is to keep people from getting the facts").
But it is not only a matter of covering up fraud that has already happened. The government also created an environment which greatly encouraged fraud.
Here are just a few of many potential examples:
- The Treasury department allowed banks to "cook their books"
- Business Week wrote on May 23, 2006:
"President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations."
- Tim Geithner was complicit in Lehman's accounting fraud, (and see this), and pushed to pay AIG's CDS counterparties at full value, and then to keep the deal secret. And as Robert Reich notes, Geithner was "very much in the center of the action" regarding the secret bail out of Bear Stearns without Congressional approval. William Black points out: "Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth"
- The former chief accountant for the SEC says that Bernanke and Paulson broke the law and should be prosecuted
- Freddie and Fannie helped to create the epidemic of mortgage fraud
- The government knew about mortgage fraud a long time ago. For example, the FBI warned of an "epidemic" of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud. Indeed, Alan Greenspan took the position that fraud could never happen
- Bernanke might have broken the law by letting unemployment rise in order to keep inflation low
- Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not
- Arguably, both the Bush and Obama administrations broke the law by refusing to close insolvent banks
- Congress may have covered up illegal tax breaks for the big banks
- Lehman’s Fraud Exposed
- Mortgage Rates Heading Towards 7%
- It’s Not the Great Recession, It’s the Great Bank Roberry
- 45% of the world’s wealth destroyed by the credit crisis.
- Banks Threaten Lawsuit to Keep Bailout Loans Secret