The Society of the Owned: Hazardous Morals

Terrance Heath

Part Eight of a Series

Remember subprime mortgages? They’ve been nudged out of the headlines by gas prices lately, but they — and the crisis catalyzed by the collapse of the subprime market — are still news.

Bear Stearns (Remember them?) is finally, quietly sold to JP Morgan — to the tune of $2.2 billion, with taxpayers kicking in $29 billion via the Fed, to guarantee Stearns’ subprime mortgage assets.

Bank of America has been cleared to buy Countrywide Financial (Remember them?), and apparently still wants to seal the deal. (BofA didn’t want Countrywide’s no. 2 executive, and it only took them about $28 million to get rid of him.)

Meanwhile, more than 1 million homes are now in foreclosure.

We all heard the outcry when, in the midst of rising foreclosures, our government moved to bail out one of the biggest (and most reckless) Wall Street players in the subprime debacle. We know that President Bush backed the move, though he’s sworn to veto the supposed foreclosure relief bill that’s heading his way after a Senate deal saved it from oblivion. The treasury secretary defended the Stearns bailout again in mid-May. (A “preemptive strike” in light of the impending final sale, perhaps?)

But do the defenses and explanations why the Fed had to bail out Bear Stears boil down to “love they neighbor”?

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