No one is more disappointed than I that Obama hasn't done more to redress the hundreds of thousands, if not more, people who've been taken for a ride by the banksters in the real estate heist.
But the more I look at it, the options he himself can take are rather limited. The best method for redress was through Congress. Pushing for banking reform, pushing for judges to be able to reset mortgages, pushing for a full accounting of how this happened.
Unfortunately, there aren't enough good Democrats to do so, and in any event the Republican senators would most certainly have filibustered anything stronger than what was done and would probably have been joined by a few of our worst Dems.
Let me explain.
Bush's Office of the Comptroller of the Currency (OCC) , in July of 2003, pre-empted all state laws that protect consumers in the financial sector. They did this, as stated in the OCC letter, because the states were inhibiting the growth of sub-prime lending. As we all know, lending to poor minorities was a top priority of our benevolent president Bush.
This was the equivalent, as I've said many times, to completely disbanding the entire police force of New York City, and putting one person (who lives in Hoboken and has an unlisted telephone number) in charge of every single crime in the city.
The Republican congress OK'd this stunt, even though there was testimony that exactly the kind of fraud would happen that did happen. We all know how little Republicans care for oversight, unless it's overseeing something like the Clinton's Christmas card list, for which they'll spend over a hundred hours examining. But the party of states rights defenders never blinked an eye at this huge pre-emption of states rights.
The banksters went to town, as we all know. Sub-prime, no-doc, low-doc and liars loans exploded in growth. And Bush's OCC, who had pre-empted state laws, never lifted the teensiest finger to stop the fraud. But what to do with this (expletive) crap? Who's going to buy it? Well, the same people in Congress who allowed this threatened Fannie and Freddie to purchase it, and they did. There was the added bonus that when this came to light, the GOP blamed this on Fannie and Freddie, when they'd threatened them to buy it in the first place. Oh, the irony. So there was a pipeline full of crap, the ratings agencies folded and OK'd it, and then the investment banks also OK'd it, all of them KNOWING it was crap.
The investment banks, no dummies they, eventually created vehicles betting the mortgages would fail because they KNEW it was crap and was going to blowback at some point. And as we well know, they never miss an opportunity to make a buck coming and going.
This is the shit pile Obama walked in to.
Now take a moment and wonder what he'd have to do/say to redress this mess. He'd have to say that the UNITED STATES GOVERNMENT aided and abetted the theft of (probably) trillions.
That the US government knew they were creating a perfect storm of fraud that would not only bamboozle people in the US, but also those investors around the world who bought that crap, believing the US would never, ever sell them a pig in a poke. Yet that is exactly what happened.
For Obama to bring that up, to make that public, would completely unravel our entire financial system. Not only would every single person who got duped here want their money back, but so would all those investors here and around the world.
Fraud is fraud. And unfortunately, the US goverment aided and abetted that fraud.
Who in their right mind would ever invest in the US again? What would be left of our financial system if this fraud was redressed?
I know the Justice Department and some of our agencies are going after the banks in some fashion. They're getting settlements of billions, which of course is only a drop in the bucket of the fraud's toll.
But do we really want to dismantle our entire financial system over this? Is it possible to do so and survive? I kind of doubt it.