It has recently been revealed that Larry Summers, President Obama’s chief economics adviser, was paid roughly $5.2 million by hedge fund D. E. Shaw in the past year and collected $2.7 million in speaking fees in 2008 from various institutions and corporations, including troubled financial giants like Merrill Lynch, Goldman Sachs, Citigroup, J. P. Morgan Chase and Lehman Brothers.

As Glenn Greenwald at Salon.com remarked, "It is basically an advanced bribe. It’s paying off in spades. And none of it seemed to bother Obama in the slightest when he first strongly considered naming Summers as Treasury Secretary and then named him his top economics adviser instead (thereby avoiding the need for Senate confirmation), knowing that Summers would exert great influence in determining who benefited from the government's response to the financial crisis."

Greenwald also provided a link to a very interesting transcript of an interview by Bill Moyers with William Black, former Director of the Institute for Fraud Prevention and presently professor of law and economics at the University of Missouri, who served as the tough regulator during the savings and loans crisis in the 1980s. Black believes that at the heart of most large corporate failures and scandals is calculated fraud which begins in the CEO offices and boardrooms.

In that interview, Black did not spare scornful words for Treasury Secretary Tim Geithner. Black points to the fact that as President of the Federal Reserve Bank of New York, Geithner had failed in his duty to regulate most of the largest bank holding companies in America during the entire sub-prime scandal. Black also accuses Geithner of engaging in a cover up, along with others in the Obama administration and the bankers, to prevent the American public from knowing what went wrong.

Black describes the U.S. financial system as a systemic Ponzi scheme, with the one orchestrated by Bernie Madoff paling in comparison.

Then he lambastes the Bush government’s working together with the industry to destroy regulation, which has resulted in the biggest financial calamity impacting everyone under the age of 80. He points out that Larry Summers was one of those who supported deregulation under the Clinton administration. The worst thing is that the still ongoing incestuous relationship between Wall Street and the White House has made sure that it is the taxpayers who are made the fools, as their money is used to bail out favored banks like UBS and Goldman Sachs (through dishing out the AIG bailout money).

But Black thinks the biggest worry lies in the reluctance of the Obama administration to let the true situation with the bailed out institutions be known to the American public.

"Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have massive losses, and that they're fine."

In conclusion, Black thinks that only through regulation and law enforcement can the cheaters be kept at bay and regulation is the very essence that can save capitalism. Also, he thinks that leaving the incumbent corporate CEOs and CFOs in place is bad tactics, not just because these people lack integrity or because they are bad business people (although they do and they are), but because they would be unwilling to disclose the truth about their firms’ assets since they had been engaged in the frauds in the first place.

"To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It's the predicate, right? You need to know the facts to make intelligent decisions. And they're deliberately leaving in place the people that caused the problem, because they don't want the facts. And this is not new. The Reagan Administration's central priority, at all times, during the Savings and Loan crisis, was covering up the losses."

Black believes that the only solution going forward is to get rid of the people who have caused the problems (and thus are failures) and appoint people with records of success, both in the public and private sectors.