After a week of crazy financial news, I always look forward to reading Gretchen Morgenson’s “Fair Game” column on the front page of the Sunday New York Times Business section.
Yesterday, July 13, her column The Fannie and Freddie Fallout was especially timely and insightful. Her opening paragraph is relevant to many financial stories that the Bush administration has generated:
It’s dispiriting indeed to watch the United States financial system, supposedly the envy of the world, being taken to its knees. But that’s the show we’re watching, brought to you by somnambulant regulators, greedy bank executives and incompetent corporate directors.
If you have any doubts about the “incompetent corporate directors,” be sure to read Gretchen’s other Sunday July 13 Business article The Silence of the Lenders. The families and communities first victimized by Countrywide (now a legacy of Bank of America) are finding themselves again victims of loan modifications that remain unaffordable because of added delinquency fees.
Given that Congress failed to act numerous times during this predatory lending era, one can only wonder what will finally emerge from Capitol Hill as “foreclosure relief.” Reports from congressional analysts predict that Congress wants a foreclosure relief bill so bad they will strike provisions, like compensating communities plagued with abandoned foreclosed homes, which may invoke a veto from the Bush White House.
There is a solution to this dilemma if Congress would only evoke its legislative authority and pass a bill with enough votes to override any veto.
A recurring theme is emerging — none of this had to happen. As a board director of the National Community Reinvestment Coalition (NCRC), I lost count of how many meetings we had with congressional leaders and staff, with banking regulators, and even Alan Greenspan himself. No one listened to the calls for outlawing predatory lending. No one wanted to consider that financial speculation was not a productive economic use of capital.
“We told you so” is no solace when one continues to read and weep about individuals who were not speculating, they were only buying what they thought was the American dream for their families. They are not whining now; they are seeking redress for injustices that their own government aided and abetted.
Our capital markets should work for American families and communities not against them. Let that be a litmus test for any politician running for office in November.
Gretchen Morgenson was a recipient of NCRC’s Color of Money Award at our annual conference on March 14, 2008, given to the best reporting that contributes to public knowledge and awareness of the need for fairness and access in the U.S .financial system. Unfortunately, for the American economy, Gretchen earned it again this week.
I can’t wait until next week to read what Gretchen has to say about IndyMac’s failure and the role of sleepwalking regulators in allowing more Americans to be ripped off.
Yes, I think there are many, many “Mikeys” (like Michael Brown of FEMA during the Katrina tragedy) in the Bush Administration—among federal regulators and others who have taken the country to disaster with their sheer incompetence. The irony is that many of these people have received accolades for their work. They have cushy, secure jobs and will probably retire with fat pensions, after wreaking economic havoc in the lives of millions of Americans.