http://www.thenation.com/doc/20081103/williams
October 16, 2008
[Issue Date: November 3, 2008]
The Nation.
Some three weeks before New York Governor Eliot Spitzer was forced to
resign his office in disgrace (sex! scandal! floozies!), he published
an op-ed in the Washington Post. Titled "Predatory Lenders' Partner in
Crime: How the Bush Administration Stopped the States From Stepping In
to Help Consumers," the piece expressed Spitzer's concern that for
several years there had been a marked increase in predatory lending
practices, including distortion of terms, surprise balloon payments,
hidden fees and deceptive "teaser" rates. These practices, he wrote,
were having a "devastating effect on home buyers." In addition, the
sheer number of such transactions, "if left unchecked, threaten...our
financial markets." To those in the know (OK, those few egghead
"elites" not enthralled by the birth of the Brangelina twins), the
situation loomed so egregious that the attorneys general of all fifty
states, both Democrats and Republicans, lodged suits against the worst
predatory subprime lenders. A number of states, including New York,
passed laws to rein in such practices.
The response was shocking, and not nearly well-publicized enough: the
Bush administration employed a little-used 1863 law to annul all state
antipredatory-lending laws and, if that wasn't enough, to block states
from enforcing their own consumer protection laws in suits against
national banks. Thus, when Spitzer tried to open an investigation into
discriminatory mortgage lending in New York, the administration
actually filed a federal lawsuit to block it. These interventions were
so extreme and so unprecedented that the attorneys general and the
banking superintendents of all fifty states came together to oppose the
rulings unanimously. But to no avail.
<snip>
Perhaps the most insidious and ubiquitous propagation of this imagery
is the McCain ad that features a scary photo of Franklin Raines, former
head of Fannie Mae, the single black head of any organization
implicated in this mess. Yet of all the hundreds of CEOs, crooks and
swindlers who could be named--from Ken Lay to AIG's Christopher Swift
to Jack Abramoff--it is Raines who is used as the Willie Horton-ized
whipping boy of civilization's downfall. This is pure manipulation:
Raines is not connected in any way to Barack Obama. Yet McCain's
campaign director was a top manager at Fannie Mae. If we must look for
figureheads, allow me to nominate George Herbert Walker IV, who just
happens to be George W. Bush's second cousin. He also happens to be
Lehman Brothers' investment management director, who, just before the
firm's collapse, dismissed a suggestion from the asset management firm
Neuberger Berman that top executives forgo their multimillion-dollar
bonuses so as to "send a strong message...that management is not
shirking accountability for recent performance." Walker actually
apologized that the very notion had been circulated: "Sorry team. I am
not sure what's in the water at Neuberger Berman. I'm embarrassed and I
apologize."
<end excerpt>
Michael