There’s no better barometer of Washington’s debased values and historical blindness than the Washington Post, that trade paper of the professional governing class. Today it attacked Eric Schneiderman, the New York Attorney General taking a brave stand against a cushy settlement with America’s banks.
The Post has once again proved that the words the Doobie Brothers. those sagacious philosophers of the seventies, still ring true in our nation’s capital: What once were vices are now just habits.
It’s now a habit in Washington to suggest that crooked bankers should get away with any crime short of murder. It’s a habit to defend the shared values of politicians in both parties who get fat on corporate cash, knowing their well-funded political careers will be followed by high-paying sinecures on Boards of Directors or in pro-business think tanks. It’s a habit to repeat false conservative platitudes as if they were the wisdom of the ages, rather than bromides written last week in some corporate-funded think tank.
Once Wall Street’s habits of lying and lawbreaking weren’t just vices, either. They were crimes. They still are – on paper.
The Post says Mr. Schneiderman is “squabbling” with other Attorneys General as they negotiate a settlement with major banks over criminal foreclosure actions. These misdeeds capped a massive Wall Street crime wave that included perjury as well as consumer and investor fraud. These systematic, pervasive crimes created a massive housing bubble and financial collapse, followed by nearly $7 trillion in lost real estate values.
So far the banks have faced no consequences for their actions – unless you count bailouts, continued bonuses, the right to keep collecting payments for vanished housing value, and the ability to foreclose on underwater homes. That last privilege lets them keep the down payment and all the past payments, then take the house anyway.
Now the Attorneys General, under massive pressure from the Obama Administration, are ready to forgive this trillion-dollar crime wave for the relatively trifling sum of $20 billion or so, to be dispersed to wronged homeowners by the banks themselves. That’s a recipe for even more of the failure and deception we’ve seen under the Administration’s curret HAMP program. The banks would also receive full immunity from prosecution for their crimes.
Many of those crimes took place in Schneiderman’s jurisdiction, and he’s having none of it. Good for him. It takes great courage and fortitude to stand against leaders from both parties, most of your peers, and the massive corporate power of Wall Street.
Forgive and Forget
Once this nation celebrated heroes like Schneiderman. Democrats like John F. Kennedy wrote books about them (“Profiles in Courage”). Republicans in the Reagan Administration emulated them by aggressively prosecuting wrongdoers in the Savings and Loan scandal.
Today’s tolerance of corporate crime inside the Beltway is a shocking departure from our history, traditions, and values. But the mass amnesia of the Washington elite, ably assisted by corporate cash, fosters the belief it’s just “the way things are.”
Our politicians are departing radically from historical norms, but they don’t want that pointed out. So when an outsider like Eric Schneiderman refuses to play along, the Post can be counted on to lead the chants of “Burn the witch!”
Art of the Deal
The Post’s editors cluck-cluck over what they call “a squabble among the attorneys general over how much legal immunity to give the banks.” That “squabble,” they warn, threatens “the deal.”
Ah, yes. “The Deal.” How they revere “the deal” in Washington nowadays! And the more “bipartisan,” the better – as long as it’s understood that “bipartisan” is a code word for “anything engineered by corporate-funded politicians from both parties.”
The “bipartisan” culture demands that both sides be blamed equally for any conflict before coming to “the deal,” and the Post doesn’t disappoint. “We’re tempted to declare a pox on everyone’s house,” The Editors write, “or at least say that the banks are getting what they deserve for being sloppy, and that the attorneys general are getting what they deserve for exploiting an overblown scandal to shake down the banks.’
Overblown? Is $6.7 trillion in lost real estate values overblown? Is three-quarters of a trillion in underwater mortgages overblown? Is Schneiderman exploiting a trivial matter for his own advancement, as they suggest? That only makes sense if you believe these figures are trivial – and that the best road to political advancement is by angering big donors and the leaders of your own party.
“There don’t seem to be many victims,” the editors proclaim. “No one has produced evidence that large numbers of homeowners who were current on their mortgages were cast out of their homes because of bank misconduct. This looks like a case of spectacular wrongdoing with hardly any victims.”
One tries to be kind, but the ignorance is breathtaking. So many misconceptions are packed into these brief words that they become a haiku of economic ineptitude. For one thing, homeowners don’t need to be “current on their mortgages” to be victims of bank criminality. Many are behind on their payments because their bank misled them during the loan process, illegally raised their fees, or hired an appraiser it knew would overstate a home’s market.
Other people are victims of bank criminality, too. Pension funds, municipalities, and private investors were defrauded on a massive scale. Investor fraud is a key areas of disagreement between Schneiderman and Ohio Attorney General Tom Miller, who’s leading the baying pack against Schneiderman on behalf of Wall Street’s wolves.
The Post acknowledges that banks were guilty of “spectacular wrongdoing.” When did our values become so debased that we would rather ignore wrongdoing than punish it? And because there aren’t enough victims? Then why do we have crimes like “attempted murder” or “attempted robbery”?
None of it makes sense, except as a thinly-veiled justification for systematic political corruption.
Money for Nothing
“The banks will have to come up with that $20 billion somehow,” The Editors sigh, “perhaps through reduced lending and higher fees.” Or, perhaps, through reduced bonuses and compensation to senior executives. Or with accelerated paybacks of unreturned government loans. Or through their ongoing access to very-low-cost borrowing through the Federal Reserve.
The Editors remain silent on these more reasonable options, once again laying the bill for banking misdeeds at the feet of Mr. and Ms. America.
A brief history of “squabbling”
Despite its many egregious errors, the word that stays with us is “squabbling.” Like “bickering,” that’s a word the Washington elite uses to express its contempt for public debate and for those who represent the public’s interests. Eric Schneiderman is a hero who follows in the footsteps of other heroes, real and fictional. Those heroes would presumably have received the same treatment from today’s Washington Post.
Has FDR demanded jobs for all? Don’t squabble with the Republicans, Mr. Roosevelt. Is Martin Luther King marching toward Selma? Stop squabbling in Alabama. Is Gary Cooper challenging the bad guys in High Noon? We don’t cotton much to squabblin’ around here, Mr. Sheriff.
Eric Schneiderman deserves the respect and gratitude of his fellow Americans. A real newspaper would praise his work, not scold him for it. Real journalists would demand what Mr. Schneiderman is demanding: That wrongdoers be punished and the full story be told. That was journalism’s mission, once upon a time. Now we’re forced to read editorials that cast shame on the institution that published it – and on the city whose values it reflects.