How Wall Street Fleeced Millions from Wisconsin Schools

The Looting of America: How Wall Street Fleeced Millions from Wisconsin Schools

By Les Leopold, Chelsea Green Publishing, June 3, 2009

...Whitefish Bay, Kenosha, and the other three districts made missteps and miscalculations. They were naive. As Mark Hujik candidly said, they saw a pot of gold on Wall Street and wanted their piece. But they were had. We all were. We know that something has gone terribly wrong not just in Whitefish Bay but with our entire economy. There’s a connection between the junk that was peddled to the “Wisconsin Five” and the crash of the global financial system. In fact, if we can understand exactly what David Noack sold to Whitefish Bay and why, we will also understand how the economy collapsed, and what needs to change to prevent this from happening again.

Our trail will lead to an examination of financial booms and busts, including the Great Depression. And those of us with strong stomachs will also learn more than we ever wanted to know about CDOs, CDOs-squared, synthetic CDOs, and credit default swaps—those exotic instruments that swamped Whitefish Bay.

Along the way, we will see how bankers, traders, and salespeople pocketed hundreds of millions of dollars by selling risk all over the world as if it were a collection of predictable Swiss watches. And we’ll puzzle over why Alan Greenspan, Robert Rubin, and Ben Bernanke fought so hard to keep these dangerous financial instruments unregulated.

We’ll tackle the “logic” of free marketeers who claim that the meltdown is the fault of low-income homebuyers who got in over their heads. We’ll also marvel at how, in response to the financial meltdown, former treasury secretary Paulson and friends blew open the U.S. Treasury vault so that Wall Street could walk off with a trillion dollars . . . and counting.

And once we’ve put all the puzzle pieces together, we’ll use our new understanding to formulate reforms that might protect us from the fantasy-finance fiasco that is harming not just Wisconsin and the rest of America, but the whole world. [more]