Sunday, March 16, 2008

Political Prostitution: Spitzer, Bernanke, and Bailing Out Big Banks

Here's some background information on the Elliot Spitzer scandal.

From Greg Palast...

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.

Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.

How? Follow the money.

The press has swallowed Wall Street’s line that millions of US families are about to lose their homes because they bought homes they couldn’t afford or took loans too big for their wallets. Ba-LON-ey. That’s blaming the victim.

Here’s what happened. Since the Bush regime came to power, a new species of loan became the norm, the ‘sub-prime’ mortgage and it’s variants including loans with teeny “introductory” interest rates. From out of nowhere, a company called ‘Countrywide’ became America’s top mortgage lender, accounting for one in five home loans, a large chuck of these ‘sub-prime.’
This doesn't mean that what Spitzer did was ok. This story just puts it into perspective. The government handing over billions of dollars to bail out huge corporations that made poor business decisions isn't worthy of making the news.

2 comments:

Anonymous said...

I'd love to know who it was on the prosecutorial team who leaked the fact that "Client #9" was Spitzer, considering absent the leak there would be nothing to tie him to the case. Having said that, I think connecting the sub-prime mortgage crisis and Spitzer's downfall is a fairly wide leap, if for no other reason then it ignores the primary factor is both situations; personal choice.

The root of the sub-prime mortgage debacle was people buying houses they couldn't afford. My family bought a house three years ago. According to the "mortgage calculator" on our realor's website we could have "affored" a house more then twice as expensive as the one we ended up buying. The responsibility was on -me-, however, to realisticly determine how much our family was willing to spend and set limits accordingly. To use another analogy...the car salesperson is always going to try to get you to buy the "gold package" and it's up to you to say no.

Personal choice on Spitzer's even easier to peg...He couldn't keep it in his pants and got burned. As my dad told me once. If you don't want people to know about it, don't do it.

Anonymous said...

Perspective is needed. Its much like comparing Bill Clinton's affair with Monica Lewinsky with Bush's destruction of America's economy, military and standing around the world.
Kinda like comparing jay walking to a triple homicide.

Vote Fallon!
http://www.equalitygiving.org/