http://agonist.org/ian_welsh/20071108/never_let_it_be_said_theres_nothing_to_be_cheerful_about_in_the_housing_meltdownLife's rich tapestry of irony adds another thread:
Washington Mutual Inc. got what it wanted in 2005: A revised bankruptcy code that no longer lets people walk away from credit card bills.
The largest U.S. savings and loan didn't count on a housing recession. The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.
"Be careful what you wish for," Westbrook said. "They wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures."
Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.
The banks are still paying for that decision. The surge in foreclosures has cut the value of securities backed by mortgages and led to more than $40 billion of writedowns for U.S. financial institutions.
And it's going to cost much more than that. Not to mention that, as the article goes on to note, Prince, the head of Citigroup, lost his job over this. Of course, he's still worth hundreds of millions, I'm sure, so you needn't cry any tears for him. This isn't Japan, where executives who screw up that badly commit suicide to expunge the shame and dishonour.
Say what you will about seppuku, but it would be nice to see someone not just "take responsibility" but actually pay a price for all this. Let alone feel something like "shame". I'm sure Prince is familiar with the word, but I doubt he's ever experienced the emotion.
While Prince won't pay any price worth mentioning, the families who are losing their houses because of the banks' greedy decision to revise the bankruptcy act certainly will. I can guarantee that there will be plenty of suicides that can be traced back to the inability to declare bankruptcy but keep their home.
Those deaths stain the hands of every politician who voted for the bankruptcy bill. Everyone knew that bill would cause unbelievable hardship. And they voted for it anyway.
Likewise everyone involved in the financial bubbles that are now popping bears responsibility. Everyone knew the mortgages being sold were crap. Loans with no credit checks; jumper loans where you started with a low teaser rate and then jumped to much higher rates; and no money down loans as if you were buying a sofa. They knew they were selling loans to people who couldn't afford them, and who would default, and they approved their loans anyway. Why?--Because men like Prince knew there'd be no real price for them, that they'd still be rich beyond your wildest dreams. And banks like Citigroup?--They're "too big to fail", which is code for "the executives got the bonuses and now ordinary taxpayers are going to get stuck with the bill." You, personally, are still paying for the S&L fiasco. This is much, much larger when you take it all into account. Your grandkids will be paying for this.
Prince's grandkids, on the other hand, will be going to elite private schools, having holidays at exclusive resorts, will go to the best universities and will get very well paying jobs when they graduate -- if they bother to work at all. They won't need to if they don't want to, odds are.
And that's why this happened, that's why Iraq happened, that's why torture is America's policy, and why the Telecoms broke the FISA law and the 4th Amendment. Because they all expect to get away with it; heck, not just to get away with it, but to get rich and to stick ordinary Americans with the bill. Not just the bill in devalued dollars, but the butchers bill of death, of wasted lives, of suicides, of beaten wives and children, of alcoholism and and of despair. That is their legacy.
White collar fraud isn't even close to victimless. Men like Prince have more victims than even the worst serial killers.
But I'm sure he doesn't lose any sleep over it. Because he's rich, and it's regular Americans who are about to get the bill for all the bonuses he gave himself over the years.