The Rise of the American Corporate Security State by Beatrice Edwards

Author:Beatrice Edwards
Language: eng
Format: epub
Publisher: Berrett-Koehler Publishers
Published: 2014-03-20T16:00:00+00:00

CHAPTER 5

Financial Reform: Dead on Arrival

Reason to be afraid #5:

Financial reforms enacted after the crisis are inoperable and ineffective because of inadequate investigations and intensive corporate lobbying.

Let’s consider national security for a moment. This isn’t as simple as it sounds because we’re not sure what—exactly—anyone means by national security. Assuming we’re talking about the planning and actions needed to ensure a stable future for the United States, the phrase should include the need to address threats to both our economic and our political systems.

If you’re attending Senate briefings held by the Economic Warfare Institute, you will assume that the most serious threat to national security is the possibility of a hack attack on our banking system by unspecified enemies. In contrast, if you happened to miss the EWI events, and instead you’re looking at the value of your 401k while wondering why your savings accrue 0 percent interest year after year, you’ll know that the management and finance pros inside the banking system itself are the more likely danger. They are the people we ought to be scared of.

Speaking of terror, the weekend that began on Friday, September 12, 2008, was filled with heart-pounding panic at the Treasury Department, the Federal Reserve, and the Federal Reserve Bank of New York (FRBNY). Hank Paulson, secretary of the Treasury; Ben Bernanke, chairman of the Federal Reserve Bank; and Timothy Geithner, chairman of the FRBNY spent their time trying to devise a stop-gap financial plan that could avert the collapse of US financial institutions.77

Nonetheless, once the US government took the extraordinary measures necessary to forestall the cataclysm, pressure began building to provide legal immunities to financial institutions (among others) for whatever coordinated cyber-defense actions they might take with military intelligence and law enforcement. The institutions lining up for immunity, however, are the sites of the financial crimes that nearly finished us. The benign response to what the top echelon of bankers did stands in stark contrast to the reaction to the men who attacked us in 2001. Al-Qaeda leaders and anyone associated with them became the subjects of intense manhunts, detention, or execution. Americans who suggested that the War on Terror may have gone too far are still indicted and prosecuted. But those who threatened the national banking system and brought on the Great Recession avoided any direct accountability.

And now, in an impressive sleight of hand, terror—which was once our primary national security concern—has transmogrified into cyber-attack and then cyber-warfare, directed quite possibly at the banking system. This is the national security threat that Michael Hayden, James Woolsey, and Michael Mukasey tell us to fear now. And we should believe them; after all, they represented the NSA, the CIA, and the Justice Department. To combat this threat, we must extend legal immunities to the corporations that own American infrastructure. These companies want to be shielded from any lawsuit that could result from cooperation with US intelligence agencies about cyber threats. They include the same financial institutions that assumed so much risk they became insolvent and brought us to the eve of destruction only a few years ago.

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