Ministry of Truth has already covered the basics on this event, with Deadbeat Dad Cong. Joe Walsh verbally berating his constituents in defense of Big Banks but I want to look at it from another angle.
When I saw the video the thing I found interesting is that the primary constituent who asked him the most relevant questions about how Bank lobbyists influence the Fed, Congress and even the Whitehouse, as well as how the investment houses bet against their own clients by falsely pushing derivatives THEY KNEW were Toxic of them was responding to Walsh by Laughing At Him.
What I also want to say is that Joe Walsh is (partially) correct - when he says Government "Created" this Crisis. .
This right here is absolutely right
Walsh: All the Market does, is respond to what the Government Does. The Government Sets the Rules. Don't Blame Banks and Don't Blame the Marketplace for the mess we're in right now. I am tired of hearing that Crap!
Oh, no - he's not right that Government "Demanded Everyone Be in Home" via the Community Reinvestment Act of 1977 - but he is correct that Government did spur this by Repealing Glass-Steagall in 1999 which prevented Mortgage Banks from becoming Investment Banks. Yes, if you make Highway Robbery and Fraud LEGAL then gee, I guess the Market just has engage in some Highway Robbery of people's Homes by falsifying their credit ratings then hitting them with giant balloon payments they can't afford, and then I guess the Market just Has TO TURN their Mortgages into Derivatives for Trading that they can BET AGAINST and make a ton of cash each and every time they FAIL.
Yeah, the Government just made them come up with that little Grifter Scheme. You Betcha.
This is standard boiler-plate Tea-Party/Heritage/Americans-For-Prosperty Horse Puckey that Walsh is spewing. It's the same thing that pointed-headed CNBC Host was ranting about people who couldn't afford homes getting them when he jumped up and said "We ought to have a Tea Party, are you Listening President Obama!" and inspired (Americans for Prosperity to Bank-Roll) the creation of the Tea Party.
And the truly sad part is that he probably believes it. I mean, yes, of course he's a finance industry paid shill as Jesse pointed out in detail in his post by looking at his donor records, but he's Passionately Invested in this particular lie.
Since the Rant, he's continued to Double-Down on his argument - even after apologizing for his tone.
The woman I had the heated exchange with was great and she appreciated how open and unusual these events are. I apologized to her for getting a bit to passionate and she smiled and didn’t mind at all. Regarding the substance rich of what I was trying to say – I’m no pal of the big banks and I wouldn’t have voted to bail any of them out. If they’ve abused their charters they need to be prosecuted fully. But they didn’t get us into this mess – goverment policy which has dictated for years that everyone should own a home got us here. The banks only followed the rules government set. And further government meddling will only exasperate the problem.
Yeah, apparently in Walsh's world the Mystical Magical Marketplace would find us perfect solutions to all sorts of crimes such as Assault, Rape, Murder, Drug Abuse, Corporate Corruption, Industrial Pollution, Worker Exploitation if the Government would just Fire all the Cops and Regulators and GET OUT OF THE WAY!.
Yeah, that is such a brilliant plan. I'm so glad Ayn Rand thought of it.
And the true problem that Walsh refuses to recognize, is that when it comes to the financial sector - That Already Happened. People like Walsh consistently blame the Victims. The people that the Banks Specifically Recruited for getting a Subprime Mortgage, whose loan the Banks approved, and then insured, derivatized and resold so that when they failed, the Bank's hands and books would be clean.
But the truth is - the (Regulatory) Cops, stood down.
The GOP blames the people who got the Mortgages, not the Banks who gave them those Handgranade Deals. And they also blame Fannie and Freddie, the two Government-Backed Mortgage institutions that were specifically restricted by government regulations from lending to people who couldn't afford it.
But it's not like minor little FACTS LIKE THAT have ever stopped them. Just look at this Eric Cantor ad from last year.
Cantor and Walsh point the finger at Government, Fannie and Freddie - but that isn't what Financial Reporters and Economist say. Via the Columbia Journalism Review
My only quibble with the gusher of stories this morning on the government’s takeover on Fannie Mae and Freddie Mac is my usual one—ahistoricism.
Reading all this, one gets the impression that those politically protected mortgage buyers and fee machines caused the global credit crisis.
The fact is: Wall Street sank Freddie and Fannie, not the other way around.
This Credit Suisse report (from March 2007 and eerily prescient) reminds us that the government sponsored entities’ share of the overall new mortgage market had fallen to 42 percent by the end of 2006 before shooting up to 76 percent at the end of 2007 (on their way toward 90 percent now) as the market collapsed.
And that’s the overall market. As Paul Krugman points out, a "subprime borrower is basically someone whose credit wasn’t good enough to qualify for a Fannie- or Freddie-backed mortgage". The subprime market&the really toxic stuff—was always dominated by Wall Street and Wall Street-backed lenders.
So Fannie and Freddie didn't kill the Economy. Maybe it's was Colonel Mustard in the Drawing Room with a Candle Stick?
Yet again maybe the problem with the Economy, starts with the Market - which is greater richer and fatter by taking more and more money away from the Working Class.
The Commerce Department reports that corporate profits have never been higher in American history, so why aren't Republicans -- the party of business -- celebrating the news? After all, those profits are coming not from revenue growth -- which would benefit workers and executives -- but from cost cutting. It's that cost cutting that is keeping the unemployment rate at 9.5%, while allowing more of companies' meager revenue growth to flow to the bottom line.
How historic is this accomplishment? The New York Times calculated that at $1.66 trillion, U.S. corporations are on track for annualized profits that are the highest since such records were first kept back in 1950, and notes that the gains in profits are due mostly to rising productivity.
That productivity boost came as workers spent more hours working, and getting paid less to do it. Specifically, between the third quarter of 2009 and the same period on 2010, productivity was up 2.5% as output rose 4.1%, hours worked increased 1.6%, and unit labor costs fell 1.9%, according to the Bureau of Labor Statistics.
Do more, get paid less. American Way? No, but it is the Wall Street Way.
As I said before America (and now Europe) has been ENRONed with bogus accounting tricks and twisted trading tricks by Wall Street.
Just a few days ago Rachel Maddow laid out exactly what's wrong with Wall Street in fantastic detail:
Maddow essentially documents known history here, particularly in regards to former Governor Elliot Spitzer's Crusade against Wall Street Abuses, but she also details many of the things that were laid out in the Senate Report on the Financial Crisis from earlier this year. Via NYTimes.
A voluminous report on the financial crisis by the United States Senate — citing internal documents and private communications of bank executives, regulators, credit ratings agencies and investors — describes business practices that were rife with conflicts during the mortgage mania and reckless activities that were ignored inside the banks and among their federal regulators.
The result of two years’ work, the report focuses on an array of institutions with central roles in the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Supervision, a regulator; the credit ratings agencies Standard & Poor’s and Moody’s Investors Service; and the investment banks Goldman Sachs and Deutsche Bank.
“The report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions,” Mr. Levin said in an interview. “The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”
The report adds significant new evidence to previously disclosed material showing that a wide swath of the financial industry chose profits over propriety during the mortgage lending spree. It also casts a harsh light on what the report calls regulatory failures, which helped deepen the crisis.
Singled out for criticism is the Office of Thrift Supervision, which oversaw some of the nation’s most aggressive lenders, including Countrywide Financial, IndyMac and Washington Mutual, whose chief executive was Kerry Killinger. Noting that the agency’s officials viewed the institutions it regulated as “constituents,” the report said that the office relied on bank executives to correct identified problems and was reluctant to interfere with “even unsound lending and securitization practices” at Washington Mutual.
They Lied. THEY LIED. They Lied, Stole and Cheated people out of their homes.
Walsh would have us believe the Government MADE THEM LIE, but that's not the truth -they just didn't bother to catch them and stop them. The fact is that the Regulatory Cops were too busy having a Donut to do their jobs. A Goldman Sach's Donut at that, with sprinkles.
Also the other reason the regulators really couldn't "interfere with the unsound lending and securitization practices at Washington Mutual" was because they'd lost a lot of that authority when the Gramm, Leach, Bliley Act was passed 1999 and dismantled the Glass-Steagall Firewall that would have prevented exactly that type of "Unsound" Practice". To be fair, it wasn't just Republicans who voted for this Act - it was decidedly bi-partisan. And one of the few people to sound the alarm against it was - now former Senator - Byron Dorgan.
Dorgan: I want to sound a warning call today about this legislation. I think this legislation is just fundamentally terrible. I hear all these words about the industry remaking itself--banks, security firms and insurance companies, and that we'd better catch up and put a fence around where they are or at least build a pasture in the vicinity of where they are grazing. What a terrible idea.
Is it good for the consumers? I don't think so. Better service, lower prices, lower fees? I don't think so. Bigger profits? You bet.
I am not anti-bank, anti-security or anti-insurance. All of them play a constructive role and important role in this country. But this country will be better served with aggressive antitrust enforcement, with, in my judgment, fewer mergers, with fewer companies moving in to the ``too big to fail'' category of the Federal Reserve Board, with less concentration.
This country will be better served if we have tighter controls, not firewalls that allow these companies to come together and do inherently risky things adjacent to banking enterprises, but to decide the lessons of the 1930s are indelible transcendental lessons we ought to learn and ought to remember.
Yeah, the Government is to blame for the mess were in Con. Walsh. The Government that sat on it's hands and didn't do anything to stop things, and so far hasn't really done all that much (besides Dodd-Frank and a few lawsuits) to make sure this never happens again.
Yes, We Do want more Regulation - we want Glass-Steagall BACK! And we want a few of these people, who knowingly defrauded the public by falsifying credit reports and robo-signing foreclosures when they didn't even have ownership of the mortgage - to GO TO JAIL.
Directly to Jail - Do not collect $200.