William Greider Raps Predatory Usury Schemes

“Usurers” were placed in the “Seventh Circle of Hell” along with Blasphemers and Sodomites.

— Dante’s “Inferno”

On July 18, 2008, popular author and reporter William Greider, an expert on the shenanigans of Wall Street, “The Fed” and the Stock Market, gave an interview to PBS’s Bill Moyers on an array of topics that have literally brought the U.S. economy to its knees. [1] On the broadcast, he referred to the predatory lending practices, which have led to the notorious “Housing Bubble.” He said the schemes were sourced by the “sin of usury!” Mr. Greider explained: “It is rich people taking advantage of poor people by lending them money on terms, that are sure to fail…People of great wealth and their institutions, like banks, naturally have the power to overwhelm people of lesser means. And you can’t allow that in a decent society. It won’t survive,” he predicted.

As I write, an estimated five percent of the U.S. population owns 95 percent of the wealth. Moyers asked Mr. Greider: “Where were the gatekeepers? Where were the watchdogs? Why did it take ‘The Fed’ so long to put an end to the predatory practices?”

Mr. Greider, the author of “Secrets of the Temple: How the Federal Reserve Runs the Country,” responded: “To make the story overly crude, the [U.S.] Congress repealed the law against usury. It was done in 1980 by a Democratic Congress, [with a] Democratic President, [Jimmy Carter] and of course, the Republicans all piled on and voted for it. And that was the ‘first stroke,’ only the first of many, in which they ‘stripped away’ the regulatory laws from the financial system and from banking…They set up a political climate, [that shouted] ‘let’s get government out of the way.’ And that was very appealing as framed by [President] Ronald Reagan and other conservatives.”

Keep in mind that for almost two decades, 1987-2006, “The Fed” was headed by Alan Greenspan. Since he resigned as its czar, he has come under scathing criticism from many quarters in the finance and economic communities for his reign of supposed ineptness. Two of Greenspan’s harshest detractors are authors William A. Fleckenstein and Frederick Sheehan. In their riveting book, “Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve,” they accused his bizarre monetary policies of generating one “bubble” after another. They said it was like Greenspan was tossing “gasoline on a fire,” and fueling one “mania” after another. Greenspan, of course, denies the charges.

Mr. Greider continued: “You had this very powerful industrial sector, banking and finance, that wanted and had pushed for years to get out from under the regulatory controls, limits on interest rates, the law against usury, the merger of commercial banks with investment banks, which had been prohibited in the ‘New Deal’ because it caused the disaster of 1929…During the last generation, 25, 30 years ago, ‘The Fed,’ the central bank that regulates money and credit, tipped hard in one direction…towards Capital, in favor of Capital and against Labor.”

A related back story: As I have written in an earlier piece, Americans are awash in personal debt! They are being bled dry by the Credit Cartel, one of the most powerful, grasping cliques in the country. The total amount of revolving credit debt is around $800 billion today. About ten percent of those with credit cards have admitted making only minimum payments in the last six months. Some interests rates run up as high as 29 percent, not counting the penalties and higher rates and fees for late payments that would be the envy of a Mafia loan shark from the John Gotti Gang. As a result, some desperate debtors have resorted to even paying one pursuing creditor off by taking out yet another credit card and/or if they can, taking out an equity loan on their home. Unfortunately, the juggling of overdue accounts may only postpone the inevitable, which can lead straight to bankruptcy. [2]

Now, thanks to a complicit Congress, the people are being squeezed even more. The bankruptcy laws were changed to favor the Credit Cartel. On April 20, 2005, President George W. Bush signed a Bill into law which will make it “even harder for debt-ridden people to wipe clean their financial slates by declaring bankruptcy.” This anti-consumer measure will prevent a debtor from getting a so-called “fresh start.” Instead of having their obligations erased, as they could have done under the original law, they will now be required to “work out repayment plans.” [2]

Questions with respect to the Credit Card scandal: What are the members of Congress, who pose as champions of the laboring class–like U.S. Sen. Barbara A. Mikulski (D-MD), Rep. Barney Frank (D-MA) and Rep. Charley Rangel (D-NY)–doing about this disgraceful mess? Why don’t they support a law that puts a cap on the interest rates a credit card lender can charge and also repeal that unfair bankruptcy law pushed by the Bush-Cheney Gang? And when are the people going to demand that these politicos, and others like them, take action on their behalf?

Getting back to the Moyers/Greider interview. Moyers jumped in and said: “So, at the same time ‘The Fed’ was helping to keep wages down in order to keep inflation from escalating, its policies were, nonetheless, helping banks and investors to ‘inflate’ the cost of the value of their assets beyond reality. Right?”

Mr. Greider replied: “That’s it! At one point, writing in ‘The Nation,’ I somewhat playfully and wickedly referred to Alan Greenspan, ‘The Fed’ chairman, as the ‘one-eyed chairman.” He can see inflation and wages and goods and service, even when they don’t exist. And, he’ll put his foot down on the brake. But he doesn’t see the inflation in the ‘finance system’ at all. And, the inflation in the finance system is the value, the prices of financial assets, most obviously stocks, [which] rose fantastically over 20, 25 years, two, three times the growth in the real underlying economy. Something’s wrong there, right? How do these financial assets, which supposedly reflect the economy, suddenly become worth three times more?”

Mr. Greider underscored that what has been missing from the financial system in the U.S. is “a level of integrity.” He blamed the problem, in part, on the “cozy relationship” that has existed between Wall St., The Fed, and Washington.

Author Greider also emphasized: “The point I want to make though is that it is deeper than [a] politician rolling over for his campaign contributor–the guys who finance the Democratic Party or the Republican Party. They do that, too. But, they were sold ‘a fantasy,’ an illusion which sounded wonderful about how markets make better judgments than government and the public. And, that liberating finance and business from prudential rules that society imposes upon them will produce a bigger, better economy and better returns for everyone. All those fantasies have been destroyed by these events. I mean wiped out.” [4]

Finally, when Moyers queried Mr. Greider about whether Wall St., The Fed, the Banks and/or Congress had “put the watchdogs to sleep?” He answered: “A better metaphor, instead of putting them to sleep would be–‘castration!” (5)


[1]. http://www.pbs.org/moyers/journal/

[2]. http://msnbc.msn.com/id/6735877/

[3]. Baltimore Sun, 05/21/05, “Consumer Activist Oppose Bankruptcy Bill.”

[4]. “The Trillion Dollar Meltdown: Easy Money, High Rollers and the Great Credit Crash” by Charles R. Morris and

[5]. William Greider’s “Who Will Tell the People: The Betrayal of American Democracy”; “The Trouble with Money”; and, “The Soul of Capitalism: Opening Paths to a Moral Economy.”