I haven't heard much of anything from the Trilateral conspiracy crowd now their paranoia has become reality.

The name Lyndon LaRouche started beeping out of the recesses of my memory as I watched a recent PBS Frontline program about the forced merger of investment house Merrill Lynch and Bank of America. The back story of the recent crash of the American economy – caused by the unethical antics and squalor of the American banking system – brought him up again in my mind, taking me back to the 1970s when an old-timer mailed me pages of conspiracy theory postulating that a greedy, secret cabal of bankers was manipulating the global financial system.

The centerpiece of the conspiracy theory was the Trilateral Commission, organized by David Rockefeller of Chase Bank in 1973 to bring together "private citizens" from the US, Europe and Japan to push the banking sector along the road to globalization. LaRouche, who made a career out of denouncing the Trilateral Commission as an international cabal, saw a web of conspiracy along the lines of the infamous Protocols of the Elders of Zion forgery, circulated by Russian and German anti-Semites in the late 19th century. I hear you can buy copies of this scurrilous attack on Jewry and the international conspiracy of Jewish bankers in book stalls throughout the Middle East, where it continues as a best-seller. But I haven't heard much of anything from the Trilateral conspiracy crowd now their paranoia has become reality.

Whether or not the Trilateral Commission had a direct hand in the recent meltdown, the beeping noise I keep hearing is telling me we are victims of something akin to a conspiracy – and it is related to global banking.

The sweep and depth of the current economic collapse, caused by corruption in the banking system, is astonishing. The rich and poor – upper middle, middle and lower classes – have all suffered. But worse, the fiasco has smothered small business, the backbone of the economy – a reality the Obama administration has missed entirely, thinking that shoring up banks, the very people who created the mess, will stimulate the economy.

Perhaps it was a conspiracy of eager beaver MBAs who eschewed practical management for the glory of theory. Certainly they were well represented in the creation of the mortgage-backed security instrument. At first brush, these investment vehicles, the rat that gnawed the sinews of the banking system, are a nefarious concoction designed to con investors. But no, the investment units were actually contrived as "safe" investments, at least on paper.

The thinking went, that if we take good, medium and bad mortgages and gang them up, the investor will have a built-in safety net. The very design would ensure their integrity, at least in the thinking of callow upstarts who lacked the wisdom of practical experience. Better they were simply crooks. Instead they exemplify the sorry state of decision-making in our post-modern culture. We've been screwed not only by crooks, but by well-meaning idiots as well.

Or perhaps the conspiracy should be laid at the front door of Fannie Mae and Freddie Mac, the huge US government secondary market in mortgages. Again, lofty theoretical constructs jumped up and bit us in the ass. Prodded by left-leaning Members of Congress and US Senators, the agencies were ordered to enforce the Community Reinvestment Act of 1978 (passed under the beatified Jimmy Carter) that instructed bank and mortgage lenders to advance home loans to minorities, whether or not they qualified. The idea was to cure "red-lining," the perceived practice that banks were inherently racist and refused to lend to blacks and Hispanics.

But it took CRIA 30 years to bring down the financial system. Under the Clinton administration in the 1990s, activism to extend loans to bad credit risks was energized, including paying ACORN – the notorious voting rights group – to monitor lending and threaten banks that refused to make bad loans for affirmative action purposes. In the years building up to the coronation of Barack Obama, the portfolio of dicey home loans upstreamed to Fannie and Freddie reached into the billions. No matter, said Chris Dodd and Barney Frank and their dedicated cronies: It was worth the effort so that "every American can own a home," no matter the consequences.

As for Wall Street bankers, a conspiracy was not required for them to play their predatory role in the calamity. So-called central bankers dwell in the upper hinterlands – literally and figuratively – where deals come to them for financing. If you want to start a new company, go public or raise money, hire them and they charge huge fees and actually buy the shares of the offering and turn around and sell it to investors for a nice commission. Investment bankers also trade on behalf of customers – and their own accounts – using money borrowed from New York banks. The hucksters enjoy daily lines of credit in the several millions they can in turn leverage 30 to one on the dollar.

When they hit a streak there's no stopping the greed and the flow of credit and money. Through the mid-2000s, they ginned up billons in profits before the roof caved in, leaving billions more in losses and heavy debts to their lenders. Thus fell Bear Stearns and Lehman, with Merrill Lynch hanging over the precipice. At this juncture, the Secretary of the Treasury and the Federal Reserve chairman realized that if Merrill went, the entire system was going down with them.

The unlikely White Knight was Ken Lewis, at that time in 2008 the CEO and Chairman of Bank of America. Lewis wanted Merrill as the shiniest jewel in the crown of his banking and financial services empire – started by Hugh McColl, who was obsessed with beating the Wall Street boys with his Charlotte, NC-based North Carolina National Bank. McColl began by defying the Glass-Steagall Act, passed in 1934 to prevent banks from causing another Great Depression by confining their activities to their home state.

In 1985, under the de-regulatory atmosphere of the Reagan administration, McColl marched into Florida, then South Carolina, Virginia and into Texas, where NCNB took over the troubled Republic Bank in Dallas with the blessings of the government during the throes of the 1988-1994 savings and loan crisis. Then McColl acquired the name he needed by buying Bank of America in California. McColl led the way and the banking industry followed suit, expanding into state after state – and country after country. (Wachovia, another North Carolina bank, famous for its conservative practices, followed suit and recently had to be absorbed by Wells-Fargo Bank of California or go under. Wachovia expanded beyond management control even before they merged with First Union Bank, another NC lender, six years ago. Wachovia hands blame FUNB management for their fall, but they had already stuck their neck out too far chasing McColl before the merger to blame it all on FUNB).

Soon, formerly restricted local banks were global – and largely unregulated. They were too big and covered too much ground to be reined in, or even effectively managed by their own executives. New banking practices and products went hand-in-hand with the open range mentality. B of A and most other banks turned away from lending money to their communities and became local-yokel copycats of the big New York banks. They bought deposits and leveraged their assets to trade in exotic investments – hedge funds, commodities, oil and gas, currencies and, alas, mortgage backed investment instruments. Bank customers were converted into victims, absorbing outrageous fees and rarely able to land a loan. The 90-day note and compound interest went out the window.

Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke – who summoned 700 of the top US bank chiefs to an emergency meeting in Washington as the financial system imploded – knew Lewis wanted Merrill and orchestrated a meeting between him and Merrill chief John Thain. They said Lewis had to save Merrill or the financial system would collapse, even forcing Lewis to swallow Thain's demand that $5.9 billion be set aside at closing to compensate Merrill executives, even though they had brought their company (and America) to its knees. Thain also insisted on a $10 million "finder's fee" for bringing Merrill to Lewis. These guys have no shame.

Lewis, propelled by his own goals to take Merrill, and enthused to save America for Paulson and Bernanke, signed off and waited for the three month post due diligence period. In those few weeks, Merrill managed to lose another $15 billion. Lewis wanted out of the deal. He flew to New York and said so, only to be threatened by Paulson and Bernanke that if the merger fell through, the US government would come after Bank of America. Lewis gave in, and was soon stripped of his job as chairman of B of A but remaining as CEO. He did, however, have the distinct pleasure of firing John Thain.

The truth is the old Trilateral Commission conspiracy theorists were on to something. The bankers did enrich themselves at the expense of us all. Once they were able to fly across state and national borders and sell exotic products with no real regulation, the system became too big and unmanageable and corrupt. And LaRouche was right. Due to the earlier influence of the Trilateral Commission, they infected the world with ruin.

Sadly, instead of being hauled before a tribunal and tried and executed, the culprits are living in tax havens or lounging about exotic resorts with their tainted commissions ripped out of the marrow of the economy. The rest of us are left holding the proverbial bag. No revenge is too harsh.