American Taxpayers Reward White Collar Criminals
UPDATED with link correction.
August 26, 2009
The Center for Public Integrity just released a report today on an in-depth investigation into the financial meltdown last year. The investigation begins in the fall of 2008 and recently concluded. The report is in four parts with a commentary capping it all off.
The overall report is entitled Who’s Behind the Financial Meltdown. (Full PDF Report) You can read what this project is about if you like. But the opening salvo of the first part entitled You Broke It, You Fix it? – Subprime Players Get Tax Money To Fix Subprime Mess says “firms that fed off the subprime lending frenzy that devastated the banking system are lining up to collect more than $21 billion in taxpayer funds meant to help bail out borrowers now in trouble on their loans”.
Of the top 25 recipients of the funds, 21 of them were heavily involved in the subprime mortgage lending that caused the financial disaster. The 25 were responsible for just shy of $1 trillion in subprime lending over a two year span from 2005 through 2007. Now they are being rewarded for their efforts.
The second part of the story, The Roots of the Financial Crisis: Who Is to Blame?, whose sub-title is “Banks That Financed Subprime Industry Collecting Billions In Bailouts”, begins with “the top subprime lenders whose loans are largely blamed for triggering the global economic meltdown were owned or bankrolled by banks now collecting billions of dollars in bailout money — including several that have paid huge fines to settle predatory lending charges”. Among other things, here the authors show us which banks loaned out subprime money and the amount they loaned, with Countrywide being number one at $97,202,850,000 (that $97 billion). This page really gives you a neat close up of each of the 25 banks. Don’t forget to click on each bank tab for a closer look, and be sure to “turn the page over” for more details.
Part three of the report, Predatory Lending: A Decade of Warnings, talks about how Congress and the Feds “fiddled” as the subprime crisis spread. This one begins by pointing out that William Brennan foresaw the collapse more than a decade ago by watching subprime lenders earning enormous profits by making loans to people who clearly couldn’t afford them. Brennan details his report in Predatory Lending Practices in March 1998.
The report asks “just how did we get into this economic mess” in the final part, Meltdown 101 – Subprime Mortgages and The Road to Financial Ruin. They say “blame greed, irresponsibility, lax government oversight, conflicts of interest and especially blind faith in a housing boom that seemingly had no end” was at the center of the mess. The writer(s) say it “[set] off a chain reaction that has left the economy in tatters and stuck the American people with the tab”.
Bill Buzenberg gives the closing commentary in The Mega-Banks Behind the Meltdown – How Wall Street’s Greed Fueled The Subprime Disaster. He begins with “there is something of a myth surrounding the current economic crisis, how it unfolded, and the precise role of the world’s largest financial institutions in the global meltdown. That myth suggests these banks and investment houses were somehow surprised “victims” of unscrupulous subprime mortgage lenders, and that they could not have anticipated the damaging toxic assets that have so infected their balance sheets”. He goes on to say “what’s missing from this story is the fact that this was a self-inflicted wound for which the rest of us are picking up a massive tab”.
What’s so amazing for me is the fact that these very moral and responsible people decided this issue was so important that they needed to band together and get to the real truth using real facts without allowing political ideology and self-interest interfere with the results. I have a great deal of admirations for them, and let’s hope millions of people pick up on this report and read it. If so, we may just be able to get enough people to rally around the issue and bring justice to those that justice should be served on.
Following are three more links to pages of the report with some very useful information. You should take a look.