“The quaint concept of due diligence vanished from the financial system from bottom to top. Fee-churning brokers sold adjustable-rate mortgages on over-valued real estate to suckers incapable of making the payments, then pawned off the bad loans on speculators who repackaged them as (now worthless) securities. Nobody ever expected to pay. A greater fool would borrow more to buy the property tomorrow.
“Persons like Princeton economist and New York Times columnist Paul Krugman, who warned that the speculative bubble was sure to burst with potentially catastrophic consequences, were scorned as backward-thinking pessimists and lampooned for their clumsy prose. Fearing collapse, Paulson demands an estimated $700 billion blank check to buy up the bad paper from his Wall Street friends. Here’s his idea of taking responsibility: ‘Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.’ Everybody says that something like what Paulson proposes must be done. Everybody’s probably right. Democrats, moreover, aren’t without blame. Bill Clinton signed legislation greatly reducing regulatory safeguards in 1999. We must now pray that the financial wizards who created this maze can find their way out. Meantime, here’s a phrase that should vanish from the language forever: “Republican fiscal conservative.'”
Financial wizards try to clean up own mess, by Gene Lyons, September 24, 2008
Nobody ever expected to pay…until now and it’s supposed to be paid with tax dollars. What a bad joke, and folks, the joke’s on those of us who make less than $50K/year and pay our taxes on time and in full. This used to be called the Middle Class, now it’s just the Sucker Class. Work hard, play fair, and get fucked anyway. And there’s not a goddam thing we can do about it. Yeah, write your congresspersons, tell them to close the barn door and start looking for the crazy horse they set loose when they let the Reagan gang start deregulating finance and everything else he could get their hands on. Businesses, commerce, services, whatever are regulated because they’re dangerous to self and others when they’re out of control; deregulating them just brings them back to their original dangerous state because cats have longer memories and learn better than the denizens of the business demimonde.
You know, since Reagan, crime seems to go up under Republican administrations because under Republican administrations, crime pays, and, as we can see, pays very very well. I know debt based securities aren’t illegal, but they should be. And the bankers who sell mortgage debt should be punished, but they won’t be.
Yes, I’m bitter, but I’m still voting and voting Democrat because it’s the right thing to do. We know what doesn’t work, let’s give President Obama a try.