They will get away with it, at least in this life. "They" are the Wall Street usurers, people of a sort condemned in Scripture, who have brought more misery to this nation than we have known since the Great Depression. "They" will not suffer for their crimes because they have a majority ownership position in our political system. That is the meaning of the banking plea bargain that the Obama administration is pressuring state attorneys general to negotiate with the titans of the financial world.
It is a sellout deal that, in return for a pittance of compensation by banks to ripped-off mortgage holders, would grant the banks blanket immunity from any prosecution. That is intended to short-circuit investigations by a score of aggressive state officials, inquiries that offer the public a last best hope to get to the bottom of the housing scandal that has cost U.S. homeowners $6.6 trillion in home equity in the past five years and left 14.6 million Americans owing more than their homes are worth.
The $20 billion or so that the banks would pony up is chump change to them compared with the trillions that the Fed and other public agencies spent to bail them out. The banks were given direct cash subsidies, virtually zero-interest loans, and the Fed took $2 trillion in bad paper off their hands while the banks exacerbated the banking crisis they had created through additional shady practices, including fraudulent mortgage foreclosures.
Yet the administration has rushed to the aid of the banks once again and is attempting to intimidate the few state attorneys general who have the gumption to protect the public interest they are sworn to serve. As Gretchen Morgenson of The New York Times reported:
Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices. ...
In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement. ...
Donovan has good reason not to want an exploration of the origins of the housing meltdown: He has been a big-time player in the housing racket for decades. Back in the Clinton administration, when government-supported housing became a fig leaf for bundling suspect mortgages into what turned out to be toxic securities, Donovan was a deputy assistant secretary at HUD and acting Federal Housing Administration commissioner. He was up to his eyeballs in this business when the Clinton administration pushed through legislation banning any regulation of the market in derivatives based on home mortgages.
Armed with his insider connections, Donovan then went to work for the Prudential conglomerate (no surprise there), working deals with the same government housing agencies that he had helped run. As The New York Times reported in 2008 after President Barack Obama picked him to be secretary of HUD, "Mr. Donovan was a managing director at Prudential Mortgage Capital Co., in charge of its portfolio of investments in affordable housing loans, including Fannie Mae and the Federal Housing Administration debt."
The HUD website boasts in its bio of Donovan that "under Secretary Donovan's leadership, HUD has helped stabilize the housing market and worked to keep responsible families in their homes." If that is so, we have to assume that the tens of millions savaged by an out-of-control banking industry were not "responsible." And if the housing market has in any way been "stabilized," why did the Commerce Department report Tuesday that new home sales have dropped for the third month in a row?
Shifting the blame from the swindlers to the victims is the cynical rot at the core of the response of both the Bush and Obama administrations to the housing collapse. It is a response that aims to forgive and forget the crimes of Wall Street while allowing ordinary folks to sink deeper into the pit of debt and despair. It infects Donovan and many others who claim to be concerned for the very homeowners they are betraying by undermining the few officials such as Schneiderman who seek to hold the bankers accountable.
In her article about the pressure being brought to bear on Schneiderman to go along with the sellout, Morgenson reported that according to an attendee at a memorial service this month for former New York Gov. Hugh Carey, as Schneiderman was leaving he "became embroiled in a contentious conversation with Kathryn S. Wylde, a member of the board of the Federal Reserve Bank of New York who represents the public."
When interviewed by Morgenson, Wylde claimed that her conversation with Schneiderman was "not unpleasant" but that she told him "it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street--love 'em or hate 'em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible."
When haven't they done that?
There are specific villains that should have been prosecuted, fined or vilified including Andrew Mozilo, members of Congress, & Greenspan. However, your single-minded and simple-minded rant exposes your true motives and sheds no light on the situation.
I am a relatively large donor (>$50K per cycle) and I am disgusted by the system. I recently signed the Howard Schultz pledge. Other donors that I know would be thrilled if we weren't constantly harassed for money by politicians that call with a combination of carrots and sticks. I know that there are organizations and individuals that love the access they purchase. However, our system would work far better if no money ever went to a politician. It is a bad, bad, system that encourages corrupt behavior.
In our political system every thing hinges on the competence and character of the President. President has shown clearly and consistently a moral vacuum while covering up and turning corrupt bankers into American lords as he has incompetently managed the various departments. Everywhere the government is in decline as NASA and our military become shadows of their former selves. He has exaggerated the shameful practices of recent past presidents as wealth and ownership define entry into the opaque halls of influence.
I predict massive fraud of this Administration.
Robert Scheer, I thank you for your courage and patriotism in bringing light to the ignoble personnel that Obama corruptly employed to tear our nation down.
Yet cries for blood are ill-aimed. The best person to go after would be Barney Frank, Freddie & Fannie, The Fed, and HUD. The Banks got swindled by greedy government (seeking to greedily increase home ownership, increase economic activity, and placate the lower income starta) and greedy borrowers (seeking to get home they could not afford or speculating on capital values or just plain over representing their income).
Kai
It is a response that aims to forgive and forget the crimes of Wall Street while allowing ordinary folks to sink deeper into the pit of debt and despair." ......quote
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The crazy ARM mortgages fiasco, derivatives, CDO's, and all the other toxic Wall Street and bank junk..........the Wall Streeters and banksters and friends made billions and caused the worst economic meltdown since 1929.
We are in the worst depression (yes depression) since the Great Depression.
It was so avoidable.
Yet the people who did it will probably never be prosecuted and most will never even lose their jobs because of it.
Too much greed, selfishness, risk taking, hubris, and CORRUPTION.
The politicians (with few possible exceptions) and top government watchdogs (Fed, Treasury) are all as corrupt as the Wall Streeters and Banksters.
******Those at the top did it.....and public sector workers, the poor, the retired on SS, the victims are being blamed.
Even worse, too many ordinary fellow Americans are ALLOWING the victims to be blamed and "absolving" the real culprits.
This money was bubble equity and no more real than the "asset values" in the earlier Japanese property bubble where property values eventually dropped 99% from their peak of one million US dollars per square meter. Unless you were smart enough or lucky enough to cash out at the peak, what property holders "lost" never really existed except as a theoretical possibility.
The banks were given direct cash subsidies, virtually zero-interest loans"
According to ProPublica, Goldman Sachs repaid their $10billion TARP loan plus $1.1billion in interest and $0.3 billion in dividends (http://projects.propublica.org/bailout/list/dividends). That's more like 14% than "virtually zero".
Bush had his "Ownership Society,: where he told us to go shopping and buy homes while we went to war.
Cheney stated that Deficits did not matter anymore!
And Greenspan went before the wall street bankers and (on the record) told them they needed to be "more creative" in their lending policies and products. Then he artificially held the fed reserve rate near zero, giving them virtually free money to blow Bush's derivative backed Bubble.
They were criminally complicit in this rip off, bailout, and ensuing depression.
Charges and arrests are called for all around!
It has been a nightmare for a lot of homeowners. When will it end? When the bankers rob all of us blind I guess.
Really, if you figured out how to make a million in the markets today would your first call be to me?
If your broker knew how to unfailingly make money, WHY would he tell you?
OK, if the guy you talk to everyday is Warren Buffett, listen to him. If not..............
Why not screw up the economy; apparently all three branches of the federal government don't have a problem with it.
That Congress passes it, the President signs it and the Supreme Court upholds it only makes it legal, not right.
Nor fair, equal or just for that matter.
Imagine your employer--if you still have a job--coming up to you at work and asking you to lend him a few thousand bucks til next month.
Last I heard, wanting to earn a living still isn't a crime, yet you would think only having tens of millions instead of hundreds of millions or even billions is somehow the fault of the people living paycheck to paycheck.
I define Democracy as the separation of wealth and power; yet the wealthy are doing fine and those who want power are
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still acting like spoiled children arguing over whose slice of the cake is bigger.
And didn't I see a Conservationist report last week placing the American "Mom and Pop" business on the danger of extinction list?
Yet why aren't there bills flying through Congress and across the President's desk to protect an American "specie" that 's actually endangered?
Rake in tons and pay out pounds: Capitalism at its core, not that any other governmental system on the planet is any better. Not even Communists give up the control currency systems and employment offer. In fact, communists governments are both employer and in control of the currency.
Kind of like where we're headed if wealth and power ever fully reunite.
Are you practicing your bows and curtsies, boys and girls, cause here comes your private/public leaders on the way to the feast...