The $200 billion bail-out for predator banks and Spitzer charges are intimately linked
While New York Governor Eliot Spitzer was paying an escort $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.
Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.
This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.
Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers bordello: Eliot Spitzer.
Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.
How? Follow the money.
The press has swallowed Wall Street’s line that millions of US families are about to lose their homes because they bought homes they couldn’t afford or took loans too big for their wallets. Ba-LON-ey. That’s blaming the victim.
Here’s what happened. Since the Bush regime came to power, a new species of loan became the norm, the sub-prime mortgage and its variants including loans with teeny “introductory” interest rates. From out of nowhere, a company called Countrywide became America’s top mortgage lender, accounting for one in five home loans, a large chunk of these sub-prime.
Here’s how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 monthly payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain’t worth a can of spam and the Grinnings are told to scram – because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the “discount” they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. The Grinnings move into their Toyota.
Now, what kind of American is sub-prime. Guess. No peeking. Here’s a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren’t stupid hey had no choice. They were steered as it’s …more
Cutely buried in the 18th paragraph in a story about Alberto Gonzales on Sunday was a slyly-worded updated confession by the New York Times that, in 2004, the Bush Administration leaned on its editors to spike a story about illegal invasions of citizens private records (“data mining”). The Times editors smothered the story. They finally ran it – a year later – after Bush was safely re-elected.
As a journalist, this makes me want to throw up.
For two reasons: First, while The Times was covering up Bush’s KGB-style data-mining operation, the Palast team was revealing its secrets. We published confidential FBI memos detailing horrific schemes for illegal spying using Bush’s favored contractor, a company called ChoicePoint Inc.
The second reason The Times confession makes me ill: While the publishers at the Paper of Record were counting their millions, the Palast Investigative Fund was slowly going broke.
Well, we’ve made it: Last Friday, the main-stream US media, through the venerable PBS program ‘NOW’, finally broadcast our reportage on the “caging” of voters, a story we first broke 3 years ago. BEFORE the 2004 election.
We’ve made it in another way: Friday was also the day I was informed that the Palast Investigative Fund was dead broke, technically bankrupt, with way less than zero in the account.
Bluntly: if we don’t get some help, and fast, we’re sunk. We are throwing staff overboard and halting some operations while we seek funds to keep afloat.
I’m pleading with you to do three things:
1. Watch PBS ‘NOW’ on voter caging. Then, if you think our work is important…
2. Donate at least $100 (tax deductible) to the Palast Investigative Fund. With heartfelt gratitude, I’ll send you a personalized, signed copy of Armed Madhouse (hardbound or paperback, your choice), or the DVD “Big Easy to Big Empty,” the untold story of the drowning of New Orleans.
(For $250, I’ll sign and send a whole BOX of Raw Journalism: 2 books: Armed Madhouse and Impeach the President, 2 DVDs: Big Easy to Big Empty and American Blackout, the Audio Book Armed Madhouse and the Spoken Word CD Live from the Armed Madhouse). Or simply make an open no-gift donation for a sum of your choice. (All options and many other signed items can be found at the Palast Investigative Fund Homepage.) …more
Catch Greg Palast on PBS’ top current affairs program.
‘NOW’ furthers the story Palast first busted open for Britain’s BBC Newsnight, the scheme to attack voters of color – the ‘Blue’ ones.
For Bill Moyers’ capable successor, David Brancaccio, Palast lays out the latest evidence never before televised.
Reporter Palast for BBC interviewing fired US Attorney David Iglesias in New York. Both appear on the PBS broadcast. (photo: J. Soohen)
by Greg Palast
“Can’t he make a living in a more reputable, less disgusting way, say, in child pornography?”