I am a Democrat who voted for Barack Obama in both 2008 and 2012, but the second time I knew that I was voting for a very bad man in order to avoid one who is even worse. In 2012, I kept no remaining illusion that Obama is a decent human being.
There is no mystery as to why the United States under President Obama is continuing the soaring wealth-inequality that was occurring under President George W. Bush, whose policies led to the 2008 crash. (There is also blame in this crash for earlier Presidents, going all the way back to Reagan, but most of the blame belongs to Bush II, at the end of whose eight years, the crash actually occurred.)
This nation is still recovering from the paroxysm of white-collar crime by banksters who defrauded both mortgage-borrowers and MBS (mortgage-backed securities) investors and walked off into the sunset vastly enriched thereby, with many billions of dollars in their personal accounts, while future U.S. taxpayers are left holding the bag of “toxic assets,” which the Treasury and the Fed continue to buy up at full price from the megabanks and to auction off, with the losses being thus transferred from the mega-banks, onto ultimately future U.S. taxpayers: our children and grandchildren. We now have a massive federal debt, largely on account of that bailout, and especially of the plunge in federal income taxes coming into federal coffers, which has resulted from the 2008 crash of the entire economy.
In an online forum, concerning the cause of the 2008 crash, one person asked:
“Can you please explain to me what these greedy Wall Street demons hoped to gain by lending – correction: GIVING – money to people who could never pay it back? What was in it for them? Yes, many individual cronies of ... politicians made sure they would get theirs and to hell with everyone else but would you ‘loan’ money to someone you knew would never pay it back? Only if you were forced to by someone threatening your livelihood, right?” He thought that banks had been pushed by overzealous regulators into lending to poor people who simply couldn’t afford to pay.
I responded by saying:
“Please read William K. Black's book, The Best Way to Rob a Bank Is to Own One. But to summarize: The top executives of a bank are free to loot it so long as they do it legally, because the federal guarantee will have others, such as ultimately the taxpayers (if the bank is federally insured), cover the bank’s losses. The legal way as a bank CEO to rob ‘your’ bank is to drive it into the ground with high-risk, high-reward, bets in which the guarantors and/or insurers cover the risks, while having your friends on the bank's board (who appointed you to run it) okay your generous bonus pay for thus running up its sales-volume (and so winning those executive bonuses for yourself and ultimately for the board). The way it was done during 2005-2007 was that the top Wall Street executives ignored risk, since there was this federal backing, and they filled the unlimited global demand to sell ‘safe’ mortgage-backed securities, mortgage-backed high-interest bonds, by paying Countrywide Financial and other mortgage-originators to generate as much ‘product’ for them to chop-and-dice and sell as possible. In order for Countrywide etc. to do that, they had to advertise to bring into the home-buying market people who wouldn’t otherwise be buying homes, people who were mainly renting; and the harder it was for Countrywide etc. to do that (i.e., the more deception that was needed) the higher would be the sales-commission that Wall Street would be paying to Countrywide etc., so that a premium was paid for the crookedest loans. You are falsely assuming that the top executives of a corporation necessarily have the interests of the corporation they run in mind. It isn’t necessarily the case, however; and with federally insured banks, it very definitely is not the case.”
Another participant, who had professional expertise in this matter (which I don’t), replied to this question by saying:
“The answer to your question is called ‘disintermediation.’ Once a loan was originated, it was securitized into pools, ranging anywhere from $500 million to over a billion. These poorly underwritten loans (which were NOT the result of ‘government policy’ and were not NOT securitized through Fannie or Freddie) were sold into the markets by Goldman Sachs (who famously called the buyers ‘muppets’), Lehman, Bear Stearns, and others. Later, AIG wrote insurance contracts on these mortgages, and since the ratings agencies rubber-stamped them ‘AAA’ [because the bond-rating agencies were being paid by the banks who were selling these MBS], the [insurance] policies cost very little. Soon, they insured $3 trillion worth of these instruments, without $1 in collateral to back them up. So, the loans were produced by originators who sold the paper to the banksters, who fobbed off the risk to the stupid [MBS] investors, knowing they were going to blow up.”
Numerous independent investigations have found that the criminality in these frauds (against home-buyers and also against MBS investors) went at least into the top executive offices of the mega-banks and AIG and the bond-rating firms, if not to the CEOs themselves, and likely included people such as Robert Rubin of Citibank, people who drew multimillion-dollar fees and bonuses and other forms of emoluments from “their” federally-backed institution.
Although the Obama Administration refuses to prosecute, much less to imprison, any of the mega-bank executives who oversaw and created the incentive-system that drove these crimes, there was finally action taken by NYC’s elected District Attorney against low-level employees of one tiny bank, Abacus, which served immigrants in NYC’s Chinatown. Although the report, on January 31st, from Bloomberg’s BusinessWeek, notes that “The bank’s default rate is a fraction of the industry average, ... less than a tenth of that,” and that “Abacus’s loans got paid back,” “the Manhattan district attorney’s office announced criminal charges against the bank and 19 former employees, some facing up to 25 years in prison,” for misrepresenting the financial condition of some mortgagees. The prosecuting DA, Cyrus Vance, Jr., is the son of the former U.S. Secretary of State, and is most famous for his having summarily dismissed the rape case against former IMF chief Dominique Strauss-Kahn.
On 9 June 2012, firedoglake.com bannered “The First Bank Has Been Criminally Indicted for Mortgage Fraud,” and reported that “Manhattan DA Cy Vance” Junior “has indicted a bank, a very small bank, for mortgage fraud. The first bank to be indicted in the foreclosure crisis is Abacus Bank.” (Mr. Vance had earlier proven his loyalty to elite crooks when he had peremptorily abandoned the rape case against IMF chief Dominique Strauss-Kahn, and on 5 March 2012 The Daily Beast headlined about that, “Alan Dershowitz Convicts DSK” outlining the damning evidence against DSK, in the then-infamous hotel-maid rape case.) An accompanying video interview at firedoglake, with the leading financial-crime prosecutor, Bill Black, explained that because Obama’s A.G. Eric Holder had not acted, and N.Y.’s A.G. Eric Schneiderman (whom Obama a few months earlier on 25 January 2012 had made the co-chief of his actually non-existent “Financial Fraud Task Force”) had not acted, this local elected D.A. was prosecuting that small bank, because Fannie Mae had brought the case in Manhattan, and because the total lack of prosecution of banksters under Obama was now becoming an embarrassment during his run for re-election, when he was alleging that Romney was Wall Street’s darling (which Romney actually was). Obama needed to get something going against bank fraudsters, and Black even speculated that before November there would be someone from a major bank – a real Wall Street institution – who would be prosecuted, in order for Obama to be able to cross the finish line as the victor on November 6th. Black thought that this prosecution of employees of a tiny bank wouldn’t do the kind of job that Obama now needed to be done, but that it might at least raise the hopes of the liberal faithful, to get them to the polls to vote for Obama. However, as things turned out, there was even less of a public demand for justice against banksters than Black had thought, and no Wall Street bankster was ever prosecuted by Obama’s Administration.
So, Obama’s real criminality is his protecting the elite crooks who made billions from driving their mega-banks into the ground. Obama has covered up for them, by blocking their prosecutions, and by transferring the losses of their banks off onto future U.S. taxpayers.
The way he blocked their prosecutions has been through his having chosen one of the chief enablers of these crimes, Bush’s N.Y. Fed chief Timothy Geithner, to serve as the U.S. Treasury Secretary, and also through his having chosen as the Federal Government’s two top law-enforcement officials, Attorney General Eric Holder, and his Criminal Division chief Lanny Breuer, both of whom were partners in the nation’s leading corporate criminal-defense law firm, Covington & Burling. In other words, Obama chose the very worst people to oversee the prosecutions of corporate crimes, and these Obama-selected officials – career-committed to letting big-corporate executives get away with frauds – let the top executives of the Wall Street firms off the hook, no matter how much harm their crimes had perpetrated, against the United States, and against the global economy.
Basic justice simply does not exist under a criminal President.
Obama is a criminal because he violates his Oath of Office, which says: “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will, to the best of my ability, preserve, protect and defend the Constitution of the United States.” The Equal Protection Clause in the Constitution requires equal application of the law, regardless of whether a person is a billionaire, or that person’s lowest-paid employee.
Only an individual who is either ignorant or delusional would claim that Obama’s record shows that under him the Federal Government applies the law equally. Liberals often condemn Geithner or Holder for this Administration’s having the lowest prosecution-rate in history against elite criminals, but Obama hired both them and his entire Administration, and they all answer to him, and do his bidding. This crime, of his violating his Oath of Office, is his alone. The people he hires merely carry it out.
Obama’s record is indefensible. Democrats who try to defend it are merely smearing his shame onto our Party. I will not do that. I lay the blame where it comes from: Barack Obama.
Obama’s record in this regard is even worse than George W. Bush’s. We Democrats must be the ones who will condemn him, the most loudly and strongly, notwithstanding that Romney and other Republicans overtly champion above-the-law impunities that Obama practices, even while Obama hypocritically preaches adherence to the law. Obama does not represent our Democratic Party. If anything, he is a Republican, in his actual policies. As regards elite impunity, he is a super-Republican.
But, in any case: Obama routinely violates his Oath of Office. He should be removed from office, not just for the nation’s sake, but for the Party’s. Joe Biden could not possibly be worse, and he might turn out to be far better. But if Obama finishes out his second term as President, he will surely be a black mark on the history of the Democratic Party. There is no getting away from that.
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
4:49 PM PT: This article elicits a negative response from the readers here, just as the comments against the Republican Party by Republican Lawrence Wilkerson and by Republican Bruce Bartlett elicit negative responses from their fellow Republicans; but, in both instances -- here, and there -- the problem is closed-mindedness, and not the criticisms of the given Party (or, in my case, the criticisms of a fake "Democrat" who, in some ways, is even more of a plutocrat than George W. Bush was).
On 23 January 2013, Emmanuel Saez headlined “Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2011 estimates),” and buried in his paper the stunning finding: “The top 1% captured 121% of the income gains in the first two years of the recovery.” What the data were showing was that for the first time ever on record, all income gains went only to the top 1%. The bottom 99% lost 0.4% in income during Obama’s economic recovery from Bush’s crash. The bottom 99% were even a bit worse off now than they were under Bush’s crash. But the top 1% were 21% better-off now than they were when Obama took office.
Obama cared only about the top 1%. He served them well; what he served them was the bottom 99%.