30 Mar 2008

Beyond Spitzer -- The Abyss of Business

Well I am a lot lot better but still another two months I am told by Dr Jacobs at Heatherwood Hospital until my fracture heals, so I am doing less than usual...so here is a guest comment from Philadelphia, unlucky in health, I am very lucky to have a guest column from the finest columnist on the planet...ahead of the Guardian and the Economist and the rest of the world's media I think!


Not often we praise students of Friedman and disgraced US politicians but here goes!

[col. writ. 3/25/08] (c) '08 Mumia Abu-Jamal


It has been several days since the national fever has broken over the
alleged sex scandal of the meteoric politician, Eliot Spitzer, and like a
predator seeking fresh prey, the media has prowled on, seeking a new feeding
ground.

But, even as the embers cool 'on the barby', we seem to have been
drowsing, for we have missed the most important things about this scandal.

There is a reason why today's media is little more than a recurrent
sex-fest, and a reality show machine.

This navel level of programming keeps us too dazed to appreciate what
lies behind the curtain.

In Spitzer's case, yes, hypocrisy was a juicy story that few true
reporters could ignore.

But what was more important; who he slept with, or what he was involved
in shortly before his ungracious fall from grace?

The well-known investigative reporter and writer, Greg Palast (author of
Armed Madhouse; Who's Afraid of Osama Wolf?.... (N.Y.: Dutton, 2006), was,
in his pre-reporter days, a student of Milton Friedman, who earned a degree in
finance.

He thus has insight into economic matters. In a recent article, *
Palast has pointed to Spitzer's efforts to criminalize and outlaw the sub prime
market, which Spitzer considered not just unjust, but illegal. That's because
sub-prime lenders, using a process called "steering", directed some 71% of
such business to Black and Latina high-income families. Only 17% of similar
white families received such loans. The loans were essentially balloon
payments, which had cheap teaser rates to attract (and indeed, entrap) home buyers,
and once the bait was hooked, the monthly payments exploded. If home owners
couldn't afford the increased payments, they were evicted, and their properties
were rushed back to the market, and other families were snared.

It was great for everybody -- but homeowners.

On Feb. 13, Spitzer wrote, for the Washington Post, "When history tells
the story of the sub prime lending crisis and recounts its devastating
effects on the lives of so many innocent homeowners the Bush administration will
not be judged favorably."

Spitzer added, "Not only did the Bush administration do nothing to
protect consumers, it embarked on an aggressive and unprecedented campaign to
prevent states from protecting their residents from the very problems to which
the federal government was turning a blind eye."

That date is significant not only because that's when he penned these
words, but on that evening he would visit a Washington hotel room and, of
course, the rest is history.

As he began his precipitous fall from power, the federal government
began its $200 billion bailout of the bankers who issued these sub primes.

For the bankers, everything; for the families who've lost their homes --
nothing.

And while Spitzer was far from a perfect public servant, his instincts
were to follow the money (well-- everyone's but his own).

In law, what these bankers did was tantamount to predatory lending, or
what's called "fraudulent conveyances" --- in a sense, this is a huge bait and
switch!

But, they have nothing to fear. They were given the biggest public
payoffs since the infamous savings and loan scandals of the 1980's.

But, Spitzer is, for all intents and purposes, out of the game, as
surely as he was ejected from the governors mansion.

But, he's a wealthy man, and will always have a place to live.

For the duped borrowers, and their families, they should be so lucky.

--(c) '08 maj

[*Source: Palest, Greg, "Eliot's Mess: The $200 billion dollar bail our for
predator banks and Spitzer charges are intimately linked," AirAmerica,
Clout: _http://mailings.gregpalast.com//It/tgo.php?i=Mjuxnzu=&I=http--www.GregPalast.com_

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