In order for millions of mortgagors to save their underwater homes, all the newly-elected Barack Obama had to do in 2008 was give the O.K. to then-Treasury Secretary Hank Paulson. Obama could have made a moratorium on foreclosures a pre-condition of the $700 billion Wall Street bailout. But like Bartleby the Scrivener, he preferred not to.
We already knew, from former TARP inspector Neil Barofsky's Bailout, that Obama and his own treasury secretary, Tim Geithner, had made relief for the banking cartel their top priority. They used TARP money to "foam the runway" for the Too Big To Fail/Jails (TBTFJs) by spreading out the foreclosures in a gradual fashion so as not to overburden the pampered plutocrats with too much paperwork. (Much of which later turned out to be fraudulent anyway, but that's another story.)
Now, as Dave Dayen notes, former House Financial Services Chairman Barney Frank has casually mentioned in his new memoir that President-elect Obama coldly, callously and deliberately threw millions of innocent victims of the financial meltdown under the bus. Just because he preferred to.
TARP was doled out in two tranches of $350 billion each. The Bush administration, still in charge during TARP’s passage in October 2008, used none of the first tranche on mortgage relief, nor did Treasury Secretary Henry Paulson use any leverage over firms receiving the money to persuade them to lower mortgage balances and prevent foreclosures. Frank made his anger clear over this ignoring of Congress’ intentions at a hearing with Paulson that November. Paulson argued in his defense, “the imminent threat of financial collapse required him to focus single-mindedly on the immediate survival of financial institutions, no matter how worthy other goals were.”
Whether or not you believe that sky-is-falling narrative, Frank kept pushing for action on foreclosures, which by the end of 2008 threatened one in 10 homes in America. With the first tranche of TARP funds running out by the end of the year, Frank writes, “Paulson agreed to include homeowner relief in his upcoming request for a second tranche of TARP funding. But there was one condition: He would only do it if the President-elect asked him to.”
Frank goes on to explain that Obama rejected the request, saying “we have only one president at a time.” Frank writes, “my frustrated response was that he had overstated the number of presidents currently on duty,” which equally angered both the outgoing and incoming officeholders.Now that Obama is in the twilight of his presidency, it is becoming safe for Democrats like Frank to come out of the closet and openly criticize the White House's corrupt allegiance to Wall Street. His fellow Massachusetts Democrat, Elizabeth Warren, has just added a bombshell of her own to the revised paperback edition of her own memoir, A Fighting Chance. Missing from the original hardcover bestseller was an anecdote of a meeting she once held with Obama's favorite banker, Jamie Dimon of JP Morgan Chase, to discuss government regulation of the TBTFJs:
Obama’s unwillingness to take responsibility before holding full authority doesn’t match other decisions made at that time. We know from David Axelrod’s book that the Obama transition did urge the Bush administration to provide TARP loans to GM and Chrysler to keep them in business. So it was OK to help auto companies prior to Inauguration Day, just not homeowners.
When the conversation turned to financial regulation and Dimon began complaining about all the burdensome rules his bank had to follow, I finally interrupted. I was polite, but definite. No, I didn’t think the biggest banks were overregulated. In fact, I couldn’t believe he was complaining about regulatory constraints less than a year after his bank had lost billions in the infamous London Whale high-risk trading episode. I said I thought the banks were still taking on too much risk and that they seemed to believe the taxpayers would bail them out -- again -- if something went wrong.
Our exchange heated up quickly. By the time we got to the Consumer Financial Protection Bureau, we weren’t quite shouting, but we were definitely raising our voices. At this point -- early in 2013 -- Rich Cordray was still serving as director of the consumer agency under a recess appointment; he hadn’t yet been confirmed by the Senate, which meant that the agency was vulnerable to legal challenges over its work. Dimon told me what he thought it would take to get Congress to confirm a director, terms that included gutting the agency’s power to regulate banks like his. By this point I was furious. Dodd-Frank had created default provisions that would automatically go into effect if there was no confirmed director, and his bank was almost certainly not in compliance with the those rules. I told him that if that happened, “I think you guys are breaking the law.”
Suddenly Dimon got quiet. He leaned back and slowly smiled. “So hit me with a fine. We can afford it.”Dimon could well afford to sneer. Every time his bank gets slapped with token criminal charges by Obama's justice department for face-saving public relations purposes, he saunters over to Eric Holder's office to demand and get a sweetheart deal. Holder holds the requisite press conference, collects a fine (on paper only, because banks can always claw back the cash through declaring losses on their tax returns) and he and Jamie give each other big sloppy kisses under cover of darkness.
Matt Taibbi, in one of his many articles exposing the criminal collusion between Wall Street and the White House, quotes a financial reform advocate who describes the perfidy this way:
"The kid-gloves approach that the DOJ and the SEC take with Wall Street is as inexplicable as it is indefensible," says Dennis Kelleher of the financial reform group Better Markets, which would later file suit challenging the Chase settlement. "They typically charge only one offense when there are dozens. It would be like charging a serial murderer with a single assault and giving them probation."Taibbi was writing about the case of a former JPMC employee who blew the whistle on the bank, only to find herself out of a job and her whistleblowing hidden from public view by Eric Holder, thanks to Dimon paying a clawed-backed fine to the government in exchange for the A.G.'s silence.
This past year she (whistleblower Alayne Fleischmann) watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts.After Jamie made his latest deal with Eric, he got a huge raise and the bank's stock value skyrocketed while hundreds of low-level employees were laid off. Crime really does pay during the Age of Obama.
The president not only does not give a crap about you. He openly despises you.
Still, I guess we should count ourselves lucky that we don't live in Yemen, Somalia,Pakistan, Syria, Iraq, Libya and all the other parts of the earth that the Nobel Peace laureate continues to bomb with impunity. Or in Egypt, whose murderous authoritarian ruler just got the Jamie Dimon treatment: a sweetheart deal from Obama of another billion dollars in aid, along with tanks, missiles and F-16s in exchange for a meaningless promise to cut back on persecuting gays, jailing journalists and executing protesters.
Victimization-by-state is always, and only, a matter of degree.