NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • U.S. Supreme Court Preserves Power of Finance Over Argentina


    Bill Black reports on the significance of the refusal of the U.S. Supreme Court to hear cases involving Argentinian debt obligations to international creditors -   June 17, 14
    Members don't see ads. If you are a member, and you're seeing this appeal, click here

    Full Episode


    The Black Financial and Fraud Report
    BNP Paribas Fine Shows Financial Crime Still Pays Big-Time
    U.S. Supreme Court Preserves Power of Finance Over Argentina
    Why the Worst Get on Top in Economics
    No Evidence Justice Dept. Will Prosecute U.S. Banks Responsible for Financial Crisis
    Big Banks Caught Red Handed but Continue to Avoid Prosecution
    New Law Requires Swiss Banks to Report Customers Evading Tax
    The Savings and Loan Crisis Demonstrates the Importance of Glass-Steagall
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    How the Ecuadorian Economy Grew in a Global Recession
    Swiss Bank That Facilitated U.S. Tax Evasion Continues To Avoid Prosecution
    Speculators Are Buying Up Vacant Properties With Mixed Results For Cities
    European Officials Pushing Austerity in Spain to Boost Corporate Profits By Repressing Unions and Wages
    Emerging Market Financial Crises Raise Concerns About Another Global Recession
    NC Republicans Raise Taxes on Working Families While Giving Huge Tax Breaks to Millionaires and Corporations
    JP Morgan Will Not Be Criminally Prosecuted for Its Role in Madoff's Ponzi Scheme
    Bill Black: Volcker Rule Approved But "Not Enforceable"
    Documents in JPMorgan settlement reveal how every large bank in U.S. has committed mortgage fraud
    First Wall Street Criminal Confession in a Generation...Still No One in Jail
    House Passes Deregulation Bill Written by Citigroup


    Audio

      Share to Twitter
    Share to Facebook




    I support The Real News Network because it is news - David Pear
    Log in and tell us why you support TRNN

    Bio

    William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

    Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

    Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

    Transcript

    U.S. Supreme Court Preserves Power of Finance Over ArgentinaANTON WORONCZUK, TRNN PRODUCER: Welcome to The Real News Network. I'm Anton Woronczuk in Baltimore. And welcome to another edition of The Black Financial and Fraud Report.

    Now joining us is Bill Black. He's an associate professor of economics and law at the University of Missouri-Kansas City, a white-collar criminologist, and a former financial regulator. And he's also a regular contributor to The Real News.

    Thanks for joining us, Bill.

    So, Bill, the Supreme Court refused to hear two cases regarding the debt obligations of Argentina to international creditors. What is the significance of this, and what effects will it have on the Argentinian economy?

    BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Alright. So, to back up a second about what all of this is about, Argentina at one time was by far the wealthiest country in all of Latin America. But it got involved in hyperinflation and lots of other problems. And it started listening to the Washington Consensus, which is the very conservative stuff back--promulgated in 1989, and then it was celebrated by conservatives as the other example, in addition to Chile, that proved that the Washington consensus was a brilliant success. And it was--seemed to be working, right up to the point that it destroyed Argentina's economy in 2001.

    So what Argentina had done, at the suggestion of United States and places like the International Monetary Fund, was to peg the Argentine peso to the dollar so that one peso was worth one dollar. And what that meant is that they ceded control over their monetary policy to the U.S. Federal Reserve, and it meant that when the dollar appreciated--in other words, became more valuable compared to other currencies--it meant that the cost of Argentine goods and services rose very substantially. And that made it impossible for Argentina to compete against lower-cost producers. And because, again, of the right-wing stuff in the United States, even though it was obvious this was heading towards disaster, they continued it until the whole economy broke in 2001, and Argentina went from a First World nation to somewhere between a Second and a Third World nation in the course of about six months. Just an absolute disaster--a financial crisis, crisis socially, politically, etc. And the government of Argentina eventually repudiated the debts that the prior government had created in all of this, and it reached a deal with something like 98 percent of the creditors to repay the debt at a very substantial discount.

    But about 2 percent of the creditors sold their rights to what are called vulture funds. Now, these are hedge funds that are going after, like vultures, really distressed economies and demanding 100 cents on the dollar. And so these hedge funds sued in the United States, demanding an order that said Argentina could not pay the people who had agreed to take a smaller percentage of payment on the dollar unless it also paid these vulture funds 100 cents on the dollar. And they won, the hedge funds won, in the U.S. district court. And then they also won an order from the district court that they could get a list of all Argentine assets, basically where they're located in the world, so they could start seizing these assets. And they have, for example, seized ships of Argentina in African nations, until that was overturned by another court.

    So Argentina went to the U.S. Supreme Court and asked the Supreme Court to declare both of these orders invalid, and today the U.S. Supreme Court has refused to hear the Argentine appeal. And that means that the district court orders are effective and that Argentina is potentially facing yet another international financial crisis that could be devastating to its economy.

    And, of course, the broader precedent is everybody serious agrees that you want these kind of debt agreements where you repay at a very small percentage once a country gets into enormous distress so that it can recover. Even the United States, the International Monetary Fund, agree with that. Well, those deals are going to be exceptionally difficult to do, pretty close to impossible under this ruling. So this is a device for keeping nations that are in crisis in very long-term crises instead of having them recover. So this is terrible news for all of the developing world.

    WORONCZUK: So, Bill, many of your reports for us have been about how the U.S. Justice Department has protected big banks and banksters from any prosecution. Is this an example of the U.S. Supreme Court protecting the power of finance?

    BLACK: Yes. So we have the organs of the United States of America being used to enforce an order that the executive branch of the United States of America says is a disastrous policy and grotesquely unfair and likely to cause immense harm to the peoples of the world. And the Supreme Court, as it has done through the great bulk of its history, has sided with big business and big banks and hedge funds against the peoples of the United States, and now the peoples of the world.

    WORONCZUK: Okay. Bill Black, thank you so much for that report.

    BLACK: Thank you.

    WORONCZUK: And thank you for joining us on The Real News Network.

    End

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    Israel Boycott Gains Traction As Gaza Assault Continues
    No Safe Place in Gaza: How Silence Encouraged a Genocide
    PA President and Family Leave Ramallah at Height of Protests
    Detroit Water Shutoffs on Pause, But Is It Enough?
    Obamacare Subsides On the Line
    TRNN Gaza Reporter's Family Killed in Israeli Assault
    Is Israeli Public Opinion Turning after 700 Palestinian Deaths?
    Big Oil and the Nigerian Frankenstein
    Developing Countries' Commitment to Multilateralism in WTO a Stumbling Block for Lead Firms? - Faizel Ismail (3/3)
    Israeli Human Rights Spokesperson: Attacks on Civilians Unjustifiable
    What Is Shaping Global Production and US & EU Trade Policy? - Faizel Ismail (2/3)
    US Courts Defend Rights of Vulture Funds Over Argentina
    Police Brutality and the Failure of Liberal Democrats
    "We Are Going through Hell" - Report from Gaza
    Lack of International Pressure Permits Endless Assault on Gaza
    What is the Doha Round and How Many Livelihoods Hang in the Balance? - Faizel Ismail (1/3)
    Dodd-Frank Still Not Fully Implemented Four Years Later
    Nigeria: Boko Haram Born of Poverty and Elite Politics
    White Racism, Left Politics, and the Spectrum of Acceptable Opinion
    Sweden Violates Assange's Human Rights
    The Fight for the Freedom of Information
    All Parties Involved to Blame for Malaysian Aircraft Disaster in Ukraine
    "U.S. Complicity Brought Up to Date" in Israel's War against Gaza
    BRICS: Progressive Rhetoric, Neoliberal Practice
    "Evacuate to Where?" - Report from Gaza and Israel
    Is the New BRICS Bank a Challenge to US Global Financial Power?
    Privatization, Public Health, and the Detroit Water Crisis
    All Governance in Libya Remains Contested
    Occupation of Palestinian Territories Likely to Intensify in Coming Months
    Hedges and Lessig on Money and Politics (3/3)

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting