Interview: Five Questions for William K. Black
William Black is the author of The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.
He is an expert on white-collar crime and former financial regulator. He played a key role in resolving the S&L crisis. Currently he teaches economics and law at UKMC. See his full bio here, his Huffington Post pieces here, and definitely watch his Bill Moyers interview if you haven’t yet.
On to the interview:
#1) Adam: If you were advising President Obama on financial reform, what would your first priority be?
Mr. Black: Containing, and beginning to end, “too big to fail.” Financial institutions that are too big to fail are not, as the administration has rebranded them: “systemically important” — they are systemically dangerous institutions (SDIs). First, they should not be allowed to grow. Second, their managements should be removed if they were mismanaged. Third, they should be shrunk to the point that they no longer endanger the global economy.
#2) Adam: Do you think it is likely that meaningful reforms will be passed under the current administration?
Mr. Black: I think it remains “likely” (i.e., >50% chance), but I think it is only barely likely and I think the odds of meaningful reform are falling. I think the two hopes for fundamental reform under this administration are the new “Pecora commission” which should document the compelling need for change and the fact that the problems at the giant zombie banks are so great that there will be another crisis within the next four years. (I explained this point in more detail in my recent piece in the NYT’s “Room for Debate” on this subject.)
The odds of meaningful reform are substantially higher under President Obama than they were under President Bush or would have been under President McCain.
#3) Adam: Do you feel that your outspoken views preclude you from future government appointments?
Mr. Black: My crucial CLGs (“career limiting gestures”) were being a serial whistleblower and helping to cause two presidential appointees (i.e., my bosses) to resign in disgrace. I also played some role in Speaker Wright’s decision to resign in disgrace and the embarrassment of the Keating Five. Pointing out that Geithner was selected because he was a perennial failure and moral cripple, not despite these defects, pales in comparison to those CLGs.
#4) Adam: If offered a top government regulatory post, would you consider taking it?
Mr. Black: Yes.
#5) Adam: What are your thoughts on Ron Paul’s bill to audit the Federal Reserve?
Mr. Black: I’m an original signatory of one of the petitions supporting the critical need to pass legislation opening the Federal Reserve to audit, particularly on its massive, unprecedented exposure to credit risk to foreign entities.
Thanks to Mr. Black for taking the time to answer my questions.