The Tower of Babel
The crash of 2008 was just the latest and bloodiest battle in war raged on the American Middle Class brought on by Ronald Reagan and his neo-liberal/neo-con cohorts. In that wake, emerged a powerhouse named Elizabeth Warren.
Not satisfied by their slowly growing coffers, the neo-liberals of Wall Street with their growing marketing arm on K Street decided, not only, to steal the goose laying golden eggs, but also, to eat it for supper. Once that feast began, the buy off of government and the buy out of America began in earnest.
Corruption is nothing new to Wall Street nor is it new to Washington, DC. After a few successful tries at the legalized theft and con game created by the deregulation of the mortgage industry in the 70's (enter the Sub-Prime Mortgage), Wall Street (with the help of their MSM) delivered their first full Neo-Liberal/Neo-Conservative president - one Ronald Reagan.
Reagan was the man named "god" by the GOP and many followers who brought the psychosis called "trickle-down" and "supply side economics" to America, allowed the warning signs of the sub-prime mortgage market and privatization of lending to be ignored and that behavior carried through Bush 1, Clinton, and Bush 2. The most publicized of those warnings were the national S&L debacle and the Silverado scam with hedonist Neil Bush (yes, the SAME Bush family that brought us Prescott and the support of the NAZI German war effort in the 30's; GHWB, CIA director using his position to manipulate government and cover-up Nixon to Cheney as well as Iran-Contra; Jeb, a charter member of the Project for a New American Century neo-cons, manipulator of religious zealots and "pro-lifers", wanting national attention and big headlines, as he jumped out of his legal purview as governor, merging religion with government, using a woman in permanent vegetative state, a brain liquifying, on full life support as his national calling card; and GW, SCOTUS installed president, arrogant bully, liar to congress and the People, torturer and war criminal.
Even today, people still try to justify the mess created by the Reaganites as they claim "regulation" created the mess.
The corruption in the mortgage and lending industry grew with a mass conning of everyone (not just citizens) into believing it is "the right of everyone in America to own a home." The purpose? To fleece unsuspecting, uneducated and sometimes, willfully ignorant and deluded citizens of everything for which they worked.
Legislation introduced regularly from the 1980's through 1999 assured our downfall. From the Business Law Journal, 2007, "THE SUBPRIME LENDING INDUSTRY: AN INDUSTRY IN CRISIS"
...1980, Congress adopted the Depository Institutions Deregulation and Monetary Control Act (“DIDMCA”). DIDMCA helped the Savings and Loan (“S&L”) industry stay competitive with nonfederally chartered banks where consumers received higher rates of return (Howell, 2006). DIDMCA also enabled the S&Ls to recoup the higher interest rates they were paying by allowing them to preempt state usury laws for loans to consumers secured by first liens on their homes (Howell, 2006).
In 1982, deregulation continued with the passage of the Alternative Mortgage Transaction Parity Act which extended federal mortgage-lending regulations to most residential loans, including the permitted use of variable interest and balloon payments (Howell, 2006).
These laws opened the door for the development of a subprime market, but subprime lending would not become a viable large-scale lending alternative until the passage of the Tax Reform Act of 1986 (“TRA”) (Chomsisengphet and Pennington-Cross, 2006). The TRA increased the demand for mortgage debt because it prohibited the deduction of interest on consumer loans, yet allowed interest deductions on mortgages for a primary residence as well as one additional home (Chomsisengphet and Pennington-Cross, 2006). Next, the Financial Institutions Reform Act of 1989 (“FIRREA”) addressed the costly S&L failures of the 1980s and created incentives for S&Ls to operate as thinly capitalized mortgage brokers relying on the secondary market for loans (Howell, 2006). Finally in 1999, Congress passed the Gramm-Leach-Bliley Act permitting financial service providers to merge with insurers (Howell, 2006). Thus, banking deregulation enabled lenders to offer more varied loan products, which were attractive to more varied consumers, and further gave incentives for more lenders to enter the market.
Those "varied" loan products were written and produced so rapidly and with so little oversight, that even the lenders and mortgage brokers couldn't comprehend them. That didn't matter, they knew they would never be held responsible as they placed the loan then sold it out the back door within minutes of closing; or they brokered the deal and left it for the lender (FNMA, FreddyMac or bank) to sort out; and those banks or money lenders sold those loans over and over and over and over, bundled them, chopped them up, insured against them and set them up to fail all under the nose of the FDIC, SEC and the federal government.
And then there is HSBC - a prime example of the big banks' entrenched hubris and greed in the US and UK.
Caught in a money laundering scheme that funded cartel drug deals, terror and dealt death as they funded and funneled money from Mexico, Iran, Saudi Arabia and Syria...HSBC's U.S. division provided money and banking services that is thought to have assisted and funded al-Qaida and other terrorist groups; ran around the US ban against financial transactions with Iran and other nations with which transactions have been ceased; laundered Mexican drug cartel money from 2002 through 2009; and ignored complaints and reports given by employees trying to warn of the practices for years...but they apologized and struck a sweetheart deal with Holder, so I guess it is all better now.
In Japan, CEOs and Bank presidents caught manipulating power, bribing government officials and stealing from the people have committed suicide; In China they would be given a death sentence; In America they are given bonuses from "bail out" funds paid out of the taxes on the people.
In 2008, after the fall of the house of cards creating the Tower of Babel called the US Economy, Elizabeth Warren, Harvard Law School professor specializing in bankruptcy law was appointed to chair of the Congressional Oversight Panel created to oversee the Troubled Asset Relief Program (TARP). Warren came to the public's attention as chairperson for that oversight panel and the work she did setting up the newly formed U.S. Consumer Financial Protection Bureau, in 2011.
When Obama proposed Ms. Warren for Director of that Bureau, all manner of kvetching, screeching and gnashing of teeth ensued, led by the kings of corporatist whoredom...The GOP members of the senate.
With the usual lack of balls or bravery exhibited by the appeasing Obama Administration on issues of corporate criminality and oversight, Warren was replaced (but even that wasn't good enough for the banksters pulling GOP strings but I digress)
Elizabeth Warren, advocate for the Middle Class, wasn't deterred. Today, Elizabeth Warren is a force in Congress - a voice that will not sit idly by, even for the Obama Administration's minions....
When Holder, the judge who came to his confirmation hearings claiming liberal ideals and a fire for going after corruption (but proving to be little more than a supporter of corporate malfeasance while becoming a prosecutor of free thought and enemy of transparency and accountability), claimed that "Banks are too big to jail"....
...and when administration minions scramble for excuses to justify their inaction on blatant criminal behavior on the part of banks (eg, HSBC money laundering for Drug cartels)...
Warren takes no prisoners...
Cross-posted from "FreakOutNation"