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 Outrage—and Business as UsualPosted on Jun 8, 2009
By Marie Cocco A culprit is required. This is an iron rule of Washington policy malfunctions and political malfeasance. It may be that Angelo Mozilo, the former chief of Countrywide Financial, will become the iconic corporate villain of the mortgage meltdown, much like Kenneth Lay became the personification of the Enron scandal. The Securities and Exchange Commission, with its belated civil charges of fraud and insider trading against Mozilo, lays out a case that does not reveal a web of deceit as extensive as the one Enron wove in the energy trading industry nearly a decade ago. Yet the similarities are striking: Those at the center of the duplicity were aware of the hazard they were creating for their companies and for the economy. Well-connected and politically influential, they continued their charade as upstanding corporate citizens until calamity unmasked them. The SEC complaint against Mozilo and two other former Countrywide executives portrays a top management that knew the loans the company was pushing—no-money-down mortgages, loans made to those with bad credit or granted without verifying an applicant’s income—were far too risky and very likely to fail. In excerpts from e-mails now posted on the SEC’s Web site, Mozilo describes his concern: “In all my years in the business I have never seen a more toxic product,” one message says. Yet Mozilo assured the public, investors and Congress that everything would turn out just fine. Meanwhile, he was selling off his own Countrywide stock, in the style reminiscent of Enron executives who ditched their shares while company employees were locked into holding them in their retirement accounts. The SEC charges Mozilo with reaping nearly $140 million in profits from insider stock sales. “This is a tale of two companies,” SEC enforcement chief Robert Khuzami said in announcing the charges. It is indeed a parable for our times, yet it is incomplete. For even as the SEC pursues a handful of miscreants, much of official Washington moves along a similarly duplicitous track. Advertisement In the other Washington—the one where government overseers of the mortgage industry and others on Mozilo’s “Friends of Angelo” list were granted loans on favorable terms—the financial industry continues to have its way. It won a clear victory in April when the Senate refused to change bankruptcy law to allow judges to revise the terms of mortgages for troubled homeowners—a power that bankruptcy judges already have in regard to other types of loans. The New York Times, in a detailed account of the banks’ strategy to kill the mortgage modification measure, says four financial industry trade groups spent nearly as much lobbying during the first three months of this year as they did in all of 2001. Meanwhile, The Wall Street Journal reported last week that financial institutions and affiliated trade groups have spent $27.6 million lobbying to relax rules governing how they must account for the value of securities they hold. Already, a loosening of accounting rule changes made in April—under pressure from sympathetic lawmakers—has helped some banks get through the Obama administration’s “stress tests” despite widespread assumptions that the banks were overstating their strength. The industry also is digging in—and doling out money for lobbying and campaign contributions—for a battle over how to regulate derivatives, the financial instruments traded in opaque ways that are among the core contributors to the financial crisis. This is not an industry humbled. Not by its reliance on billions in taxpayer bailout money, not by its role in precipitating the economic crisis. “At some point the senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate,” Sen. Dick Durbin, D-Ill., said as his colleagues prepared to vote against his bid for the mortgage relief provision. At some point, maybe. But not just now. Marie Cocco’s e-mail address is mariecocco(at)washpost.com. © 2009, Washington Post Writers Group Elsewhere: . CommentsAre you a Truthdig member yet? Login now, or register with Truthdig. Add Your Comment
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By RAE, June 19 at 7:36 am #
Christian96 asked: “Can’t a special election be
held to let the PEOPLE(as in “WE THE PEOPLE”) vote
on financial and banking issues related to their
best interest?”
That would require a MAJOR change in the USA form of government… to a DEMOCRACY.
Right now you have a REPUBLIC - the only “democratic” part of it is that “the people” get to vote for REPRESENTATIVES. Once elected, the “reps” can do as they please (or, more accurately, do as they’re told to do by the party bosses).
Oh sure… every four years “we the people” get to vote ‘em out… but it doesn’t matter. By then most of the damage they intended to do will be done and the replacement “rep” will find himself or herself in exactly the same powerless position, albeit with an enormous salary and bountiful perks & pensions, as the previous “rep.”
Pass it on… the United States of America is definitely NOT a DEMOCRACY.
BUT… this may not be an all “bad” thing. Rule by majority vote can be what I call “cruel rule.” What if 50.1% of “the people” voted, for example, to make divorce illegal and/or decide that non-heterosexuals be declared non-persons under the law?
A true DEMOCRACY requires that all voters be EDUCATED and accurately INFORMED on ALL ISSUES and clearly ADVISED about the costs and consequences - the fallout - from decisions made.
As Winston Churchill put it (paraphrased)... DEMOCRACY is the WORST of all governments, except for all the others!
No… I can imagine only one good and fair form of government… PUT ME IN CHARGE.
Report thisBy samosamo, June 19 at 12:57 am #
True justice is served when the right people are punished.
Report thisBy juliemarty, June 19 at 12:34 am #
This whole stimulus package is just part of the governments long term plan to take away the power of the people. Are we going to do something about it or be lazy and think someone else is going to do it for us? It is time for a revolution. We need to overthrow the government and take our power back. Before there is nothing we can do about it. you should check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html#comments
Report thisBy boggs, June 18 at 12:34 am #
I believe the biggest lesson coming out of this whole mess is that we are NOT a nation of laws. We have laws but the consequences of breaking laws is only felt by the poorest of the flocks. The politically protected corporate crooks can screw up anyones life, breakdown the world economy, and bankrupt america, but we will not punish them.
Report thisWe do investigate! Boy our congress is good at that. They can investigate longer and ask the emptiest questions, and then fold the papers up and close the investigation.
Why do we have a Congress and Senate? I forget!
By KDelphi, June 11 at 11:32 am #
thanks, democratz.org… I signed several of them, but it should be pointed out that these petition links lead , to change.gov, which is the Obama campaign’s website.
She did say Liberal Democrats.
Report thisBy KDelphi, June 11 at 11:32 am #
thanks, democratz.org… I signed several of them, but it should be pointed out that these petition links lead , to change.gov, which is the Obama campaign’s website.
She did say Liberal Democrats
Report thisBy christian96, June 11 at 3:09 am #
Electing personalities is one significant problemm
Report thiswith our democratic process. Isn’t there a more
efficient means for protecting the interest of ALL
people in our country? Can’t a special election be
held to let the PEOPLE(as in “WE THE PEOPLE”) vote
on financial and banking issues related to their
best interest?
By John Papola, June 10 at 6:28 pm #
Deep Capture. Truthdig is at the front on this, which is great. The only problem with the general analysis here is the general failure to recognize that this is the nature of government regulation and intervention in general, and not simply a staffing problem or a rules problem.
It is systemic and inherent that regulatory agencies will be captured so that their interested align with the industry they are supposedly regulating.
What we need is the freedom to succeed AND FAIL. Failure and the experience that comes with it is the only regulation that works. Kids don’t learn by being sheltered by overprotective parents. The learn not to touch the hot stove after they burn their finger.
Report thisBy felicity, June 10 at 3:29 pm #
You think the public is angry as hell at the financial institutions, we’re threatening to cut them off from their daily gambling fix at the big casino called Wall Street-real estate consortia-investment firms - if you want to see ‘angry.’
Now that their i.o.u.‘s are paid off their access to the casino should not be hindered, right? The lender-of-last-resort, that’s the tax payer often referred to as the ‘government’, should resume its sugar daddy status no questions asked. We owe them.
Report thisBy godistwaddle, June 10 at 11:18 am #
“Outrage” would require that many banking executives and Wall Streeters be tried and executed for ruining so many lives. I believe Merkins are “irked.”
Report thisBy www.democratz.org, June 9 at 8:51 pm #
(Unregistered commenter)
I have one of many solutions to the problem of too much company influence over the legislative process of the congress:
The Liberal Democratic Party of the United States functions as a progressive legislative political party.
We do not run candidates for office. We usually support candidates of the Democratic party of the United States.
We do not handle money and we do not charge money for membership and we do not raise money.
So you can join our party and still remain a a member of the Democratic, Green, Labor, or other progressive party you belong to.
Instead we create referenda on legislation by boycott petitions where we target the companies which sell consumer products and associate themselves with conservatives. We demand that these company CEOs get the legislation that we want and until that happens our members send letters to these companies indicating we will boycott them.
Why do we use boycotts? Well I hope if Martin Luther King Jr., Cesar Chavez, or Mohandas Gandhi appeared alive today that they would advocate boycotts of the friends of those who oppose our legislation, in a climate where those who donate money to office holders exercise too much influence over legislation.
Please sign these petitions on single payer health care.
http://bit.ly/single_payer_baucus
http://bit.ly/single_payer
Also sign these petitions.
http://bit.ly/EFCA
http://bit.ly/10_an_hour_min_wage
http://bit.ly/norm_coleman_concede
http://bit.ly/women_freedom_of_choice_act
Report thisBy samosamo, June 9 at 7:53 pm #
As usual, congress has hit rock bottom and continues to dig deeper but as long as there are others to blame, that hole can go straight through to the other side as long as we, the people, continue to keep re-electing these major malfunctions into positions to screw us which tends to make me believe that the ‘far too many people’ that continue to put the same crooks into office must really be getting a sweet fucking otherwise the situation would change or it just shows how fucking politically stupid and ignorant the national electorate really are.
So everytime you, who voted for the traitors in congress, look in the mirror, look straight into your eyes and say: “Damn, am I stupid or what?”
Report thisBy bcc, June 9 at 7:35 pm #
(Unregistered commenter)
Ardee and Billis nail the root of the problem. Our system is not much different than the days of allowing only landowners to vote. Now wealthy interests dominate over people power because politicians must raise money from them to be competitive in the next election cycle. $100 donations are best achieved through advertisement propaganda to the public while $100,000 donations are more carefully monitored and negotiated for their outcome. Lobbying is really much worse than bribery because accepting these bribes is mandated by our “democracy”. You either accept bribes or you die as a politician. How crazy can this fu**ing system get? One could hardly imagine what this country could become with completely publicly financed elections, the elimination of lobbying, and the adoption of IRV voting (to bring 3rd parties into the system).
http://en.wikipedia.org/wiki/Instant-runoff_voting
Report thisBy rockinrobin, June 9 at 6:29 pm #
(Unregistered commenter)
Democracy it is NOT; THAT is the PROPAGANDA repeated; indeed “democracy” as practiced by the USA has become the most despised name on the planet. Take a DEEP breath folks: the “way” democracy WORKS they claim is by EXPLOITATION: which is a CRIME. It is the TARGETING and HARMING of WE, THE PEOPLE for PERSONAL profit & gain; the ONLY Gov that is set up this way is a CRIMINAL one; it is NOT EVEN a TWO party SYSTEM folks: the AGENDA of BOTH PARTIES is to EXPLOIT the PEOPLE: using the “laws” ILLEGALLY; with a JUDICIAL SYSTEM set up that goes right along with it; YOU wrote the laws says Antonin Scalia with sneering contempt to us, the PEOPLE. FASCISM: Corps who have been CRIMINALIZED by the Gov who can not be held responsible; nor the stockholders, & the stockholders can be anonymous. Monsanto, makers of Agent Orange & CANOLA OIL which is BUSH/CLINTON joint venture; GUARENTEED to give you high blood pressure, slow your mentabolism, weight gain (diabetes folks) & MUCH MORE: POLITICIANS SAID they were NOT going to lose $1.00 when folks found out about the CHEMICALS in everything to HARM them; instantly writting a LAW: no longer need to list ALL INGREDIENTS folks. THINK any law written is every followed by these crooks & criminals? NOT a ONE. http://www.publicintegrity.org ALL laws were AGAINST the PEOPLE; and NOT ONE agency is doing ANY WORK it is being paid the “big bucks” for; meanwhile busy creating drought; destroying fresh water supply in USA claiming it now belongs to THEM (monsanto) and other CORPS working jointly with them;
Report thisBreaking an arm cost Leno’s neighbor $28,000 folks; SEE how they RAISE the PRICES for PROFIT for THIER pocketbooks? NOT population control at all; FREELY they give VIAGARA to EVERYONE who is “unemployed”; and to PREDATORS like KNOWN PEDIFILES who are just like them; predatory: looting & plundering the NATION for “the greater good”; so THEY can blow $100,000,000.00 in 1 single month LIVING LARGE and IN CHARGE; puffing themselfs up via the MEDIA as “superior”; License to STEAL and COURTS to BACK THEM UP doing so! YEP THIS is the USA enslaved to CORPS for YEARS; THAT is why they have to keep saying repeatedly “you are free” for anyone anywhere anytime to do whatever they choose: and get scott free away with it; YEP that’s FREEDOM that they are trying to put on EVERY nation carrying out Hitlers agenda;
By Fadel Abdallah, June 9 at 5:20 pm #
By Cathy, June 9 at 10:34 am #
Thank you Cathy for your feed back. I was sadly entertained (a great irony indeed!) by your reminder of the Razzle-Dazzle lyrics from Chicago. Sadly again, I was a citizen of Chicago for over ten years, yet with all my jealousy for a change to the better, I see that the latest “son of Chicago politics” has brought us another sad reminder that the more things change the more they stay the same in the ugly world of politics!
Obama was schooled in Chicago politics. Despite reports from his supporters that the corruption didn’t rub off on him, you have to wonder.
The lyrics to Razzle-Dazzle from “Chicago,” which I first saw performed by Jerry Orbach a long time ago, and which has always been my favorite because it is so brutally honest and true.
Report thisBy KDelphi, June 9 at 5:11 pm #
Kay is right.
Calling people “consumers” when they are at their most vulnerable is insulting.
Report thisBy P. T., June 9 at 4:33 pm #
By sucking up their customers’ money, the banks are undermining the capability of consumer spending to help end the recession.
Report thisBy Thomas Billis, June 9 at 3:39 pm #
We are in this mess because of legalized bribery better known as campaign contributions and we will continue struggling as long as this corrupt system is allowed to continue.Someone giving 100 dollars might be interested in good government someone giving 100 tousand sollars is not.He wants the rules twisted in his favor.Until we go to public financing of all campaigns for national office this is not a problem it is part of the system.Look at health care.Max Baucus is the largest recipient of big pharma and the health care industry contributions and he will not even let single payer be part of the conversation.I repeat part of the conversation.In other words the idea is too frightening to his corporate masters to even be discussed.One good thing it will give Marie Cocco columns for the forseaable future.
Report thisBy KDelphi, June 9 at 2:48 pm #
Can a faithful Democrat please tell me how in hell Obama can stand at a podium and endorse “psy as you go” , with Blue Dogs, for the PEOPLE, and, pay the bankers whatever they ask??
I am sure there is a perfectly good explanation why a man with Obama’s education would take his own party out of power when they are in power…
ardee is correct, RDv is correct
Leefeller—right, but the problem is in the “asking” is it not? They will dish out whatever we will take. NO, I dont think that the people are primarily to blame, but, whatever you show them you will take, they will give it to you.
One million people showed up in Caracus to support Huge Chabvez in Venezuela, in 2005, and, many had to walk or ride donkies. Many more show up to “see” Obama—but we just cant get anyone to show up over life or death issues here…what a shame….
Cathy—good one…the Chicago Boys are back, no , never left.
Trickle down—-can you taste the trickle yet? It smells like pee in here.
Report thisBy Kay Johnson, June 9 at 2:22 pm #
(Unregistered commenter)
To RdV,
“but we are little more than consumers to them, not participants. Voting didn’t work for change, what makes anyone believe anything else will?”
Thanks for reminding me to e-mail the Ed Show to remind Ed Schultz that “we the people” are CITIZENS, not just consumers.
Last night, I was watching his show for a short time, and several times he used the word “consumer” to describe us in relationship to health care options. I turned off the TV in the midst of the segment.
As long as the pundits continue to think of us, and continue to address the issue from a commercial POV, the profits gained in HMO’s, etc., remain valid.
Report thisBy herewegoagain, June 9 at 1:54 pm #
(Unregistered commenter)
There are few true liberals left in Congress or the Senate, and there’s certainly not one in the White House.
Rather, we have “progressive” neoliberals who believe global finance and investing is the indispensable player in all things economic and political.
Just look at their campaign donor lists. These are the politicians we are to bring our pleas for campaign finance reform to?
Report thisBy godistwaddle, June 9 at 1:02 pm #
Money talks; outrage walks. You want to rid yourselves of vampire plutocrats, you’re gonna have to kill them.
Report thisBy Cathy, June 9 at 10:34 am #
Yes, Fadel, the death of K Street was “greatly exaggerated.” Obama relaxed his own “new rules” on lobbyists with appointees immediately upon coming into office. I don’t believe for a moment that it was some important “exception” to his rule.
Obama was schooled in Chicago politics. Despite reports from his supporters that the corruption didn’t rub off on him, you have to wonder.
The lyrics to Razzle-Dazzle from “Chicago,” which I first saw performed by Jerry Orbach a long time ago, and which has always been my favorite because it is so brutally honest and true.
“Give ‘em the old razzle dazzle
Razzle Dazzle ‘em
Give ‘em an act with lots of flash in it
And the reaction will be passionate
Give ‘em the old hocus pocus
Bead and feather ‘em
How can they see with sequins in their eyes?
What if your hinges all are rusting?
What if, in fact, you’re just disgusting?
Razzle dazzle ‘em
And they;ll never catch wise!
Give ‘em the old Razzle Dazzle”
Report thisBy msgmi, June 9 at 10:11 am #
(Unregistered commenter)
Meyer Lansky and Lucky Luciano brought Organized Crime into the 20th Century. Ironically, their concepts and practices have been incorporated in the 21st Century by Wall Street and their minnions on Capital Hill. L&L made money off Main Street and now Wall Street has taken over that enterprise.
Report thisBy Leefeller, June 9 at 10:04 am #
Cahoots begots cahoots!
Spreading out the issues of the day from end to end, the selected issues which seem to be in the forefront and the ones slipped in back and being hidden by the MSM. Interests of the individual may be quite different in how one perceives and prioritizes.
Propaganda and rhetorical news may be most important in maintaining the status quo, it seems to only foster more heat under the the already simmering pot of fear and discontent, but as for converts?
So the divisions do appear real and propagated as best they can by special interests, this division keeps focus off reality and of course the manipulators.
In my case right now I have some interest in a national medical plan, I used to be against the war, but now survival has converted me to apathy. Why has it changed? Well after finding out impeachment was off the table, and now the same for a single payer medical plan, One feels the impotence of opinion as being worthy of asking an inanimate object for change.
Opportunism as seen from my point of view, is not unlike lifting the cover of a cesspool. Seemingly, what appears to have been rising to the top is not cream.
Report thisBy RAE, June 9 at 9:18 am #
I don’t believe much, if anything, will change in the long run. The name of the game is to MAKE AS MUCH PROFIT AS POSSIBLE, IN THE SHORTEST AMOUNT OF TIME, WITH THE LEAST RISK.
With these as universal objectives it’s only a question of who’ll first come up with the next scheme to CHEAT THE SYSTEM.
It’s the same hypocrisy as exists in the sporting world - especially professional sports. EVERYONE knows, but few will acknowledge, that the very definition of a LOSER is “ONE WHO STICKS TO THE RULES.”
All the gold and glory goes to he who learns to CHEAT THE MOST and GET CAUGHT AT IT THE LEAST. This is really what team sports teach our youngsters… not the BS of “fair play” and “sportsmanship” and “sharing” that the hypocrits would like us to believe.
Similarly, those in charge of our “finances” WILL TRY TO FIND A WAY TO MAKE THEMSELVES RICHER NO MATTER HOW MANY RULES AND REGULATIONS THEY MUST SKIRT IN ORDER TO DO SO.
It will be “THEFT AS USUAL”... you can take that to the bank.
Report thisBy Fadel Abdallah, June 9 at 8:57 am #
After reading this article, one major issue I was always concerned about as undermining both democracy, transparent economic practices and checks and balances jumped to the forefront- and that’s the issue of “lobbying” and “lobbyists.”
I have always maintained that lobbying is incompatible with democracy, transparent economic practices and the concept of checks and balances. At best, lobbying is unhealthy loophole, allowing special interest groups to bend the balance of power, political and economic, for their own narrow interests at the expense of the general public. However, lobbying at worse is a kind of legalized bribery allowing economic whores to buy favors from the political establishment.
I do firmly believe that as long as this corrupting loophole of lobbying is in place, there will never be true democracy nor there will ever be economic justice and honest economic activities. Outlawing this practice is the solution!
Report thisBy RdV, June 9 at 8:00 am #
The outraged act is wearing more than a bit thin.
Report thisFewer and fewer people are buying it with each passing hour of transparent deception and betrayal. The strategy to promote a perspective for public consumption while deliberately undermining it to serve the corrupt corporate class has become business as usual.
Some advocate that it is up to us, the people, but we are little more than consumers to them, not participants. Voting didn’t work for change, what makes anyone believe anything else will?
First people have to recognize that not only Congress, but Obama has betrayed us, only when people get the stars out of their eyes can they muster the will to make demands.
By coloradokarl, June 9 at 7:57 am #
Everyone knew what was going on . It was a HUGE PONZI SCHEME. ALL the Corporations “profited” and now they need fall guys to try to look good. The true scam is Wall Street and the idea that we are “Investing” we are giving these animals our money so they can improve their life styles. Rather YOU give them YOUR money….......
Report thisBy ardee, June 9 at 6:08 am #
Looking for culprits, or scapegoats, masks the fact that the problem is not individuals but a systemic failure of our government to protect or enforce the will of the people, a failure to protect working Americans, children, the elderly, the ill, the needy. Instead our Legislators see only the corporate cash cow and ignore their constitutionally mandated duties.
Unless we the people demand campaign finance reform, an end to second careers as lobbyists, an end to lobbying in fact, the institution of Instant Runoff Voting to aid the election of third party and independent candidates we will never turn the course of our governance back to its proper path, working for the people and not the money.
Report this