Of the myriad policy decisions that have brought us to our current precipice, from the signing of the North Atlantic Free Trade Agreement (NAFTA) to the invasion of Iraq and the gerrymandering of House districts across the country, few have proven as consequential as the demise of Glass-Steagall. Signed into law as part of the U.S.A. Banking Act of 1933, the legislation had been crucial to safeguarding the financial industry in the wake of the Great Depression. But with its repeal in 1999, the barriers separating commercial and investment banking collapsed, creating the preconditions for an economic crisis from whose shadow we have yet to emerge.
Carmen Segarra might have predicted as much. As an employee at the Federal Reserve in 2011, three years after the dissolution of Lehman brothers, she witnessed the results of this deregulation firsthand. In her new book, "Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street," she chronicles the recklessness of institutions like Goldman Sachs and the stunning lengths the United States government went to accommodate them, even as they authored one of the worst crashes in our nation's history.
"They didn’t want to hear what I had to say," she tells Robert Scheer in the latest installment of Scheer Intelligence. "And so I think what we have in terms of this story is really not just a failure of the banks and the regulators, but also a failure of our prosecutors. I mean, a lot of the statutes that could be used—criminal statutes, even, that could be used to hold these executives accountable are not being used, and they have not expired; we could have prosecutors holding these people accountable."
Segarra also explains why she decided to blow the whistle on the Fed, and what she ultimately hopes to accomplish by telling her story. "I don’t like to let the bad guys win," she says. "I’d rather go down swinging. So for me, I saw it as an opportunity to do my civic duty and rebuild my life... I was very lucky to be blessed by so many people who I shared the story to, especially lawyers who were so concerned about what I was reporting, who thought that the Federal Reserve was above this, who thought that the government would not fail us after the financial crisis, and who were livid."
"Noncompliant" explores one of the darkest chapters in modern American history, but with a crook and unabashed narcissist occupying the Oval Office, its lessons are proving remarkably timely. "We live in a culture where we reward bad behavior, we worship bad behavior, and it’s something that needs to stop," she cautions. "Changing the regulatory culture on [a] U.S. governmental level is something that’s going to take a decade, maybe two. And we need to start now, before things get worse."
Photo credit: D. Miranda.