At the moment of Eliot Spitzer’s strange fall from grace — as a “john” in a Federal investigation involving wiretaps, cyber-surveillance and lord-knows-what-else — I instantly flashed on my February 15 posting (“While The Press Was Looking Up Britney’s Skirt”), and thought: Is this the March payback for Spitzer’s brave February op-ed?
[So where was The Press? They were] generally looking up Britney’s skirt.
I looked for the reaction to New York Governor and former muckraking Attorney General Eliot Spitzer‘s exposé in The Washington Post of how the Bush Administration had actively STOPPED 50 states out of 50 from protecting you from predatory lenders, AKA “national” banks:
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.
Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect.
But, except for that army of aggregators who faithfully and ofttimes thanklessly mail out those important stories that you might be missing, day after day, (like michaelp and Raging Grannie hereabouts in cyberspace) no one said anything about it. They were, seemingly, too busy looking up Britney’s skirt.
That was from my eerily apropos post “While The Press Was Looking Up Britney’s Skirt” (15 February 2008…8:17 pm).
And now we are presented with the spectacle of the Press looking up the skirt of the call girl that Spitzer was linked with by the Federal Peepocracy.
Because we have, at last, the perfect confluence: the convergence of the fundamentally sick peeping-tom nature of surveillance, ALL surveillance and the uncontrolled power of the secret police. It is both “I peek into your private life, but you don’t know squat about me,” and the coercive nature of the Beast that destroys your family, ends your career, holds you up to public ridicule and then when the pruderiffic perverts and bluestockings are through being tittilated by your humiliation, they LOOK UP THE SKIRT OF YOUR HOOKER!
Yep. They do.
But it is STILL about meaningless trivia and the lowest forms of gossip and peepery, while the REAL story above is forgotten. Remember? The Bushies used a goddamned CIVIL WAR auditing agency to stop any scrutiny of the banking practices that are causing runs on the banks AS I FUCKING WRITE THIS! The economy is melting DOWN, and the Adminstration didn’t merely look the other way: they actively protected the predatory lending frenzy, the GREED that is suddenly crashing, as though skyscraper banks were dominoes. New York Times:
On Wednesday, Bear’s chief executive, Alan Schwartz, said in an interview on CNBC that his firm had ample liquidity, but his words have not been enough to prevent what seems to be a classic run on the bank.
And this [AP]:
Bear Stearns, which has about 14,000 employees worldwide, has struggled since two hedge funds under its control lost billions of dollars after investing heavily in securities backed by pools of subprime mortgages.
“They were the dominant firm for repackaging mortgages,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC. “That’s where all earnings came from. They had the least diversified earnings stream of all of Wall Street securities firms, and as a result, they’re paying the price today.”
NEW YORK (AP) — The federal government and JPMorgan Chase & Co. teamed up on a bailout of Bear Stearns Cos. on Friday, a last-ditch move to save the investment bank, which acknowledged its dire financial straits after a week of firm denials.
Bear Stearns lost half of its value within 30 minutes of the market open.
NEW YORK (AP) — Gold prices bolted above $1,000 again on Friday, hitting a new record after a liquidity crisis at Bear Stearns Cos. rattled Wall Street and fed buying of safe-haven investments.
But, uh, using their Secret Powers, Bear Stearns (‘Stern Bear,’ in a strange Cosmic pun) was bailed out by the Fed.
Fed Invokes Little-Used Authority to Aid Bear Stearns (Update4)
By Scott Lanman
March 14 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke invoked a law last used four decades ago to keep Bear Stearns Cos. from collapsing after the securities firm sought emergency funding from the central bank.
The loan to Bear Stearns required a vote today by the Fed’s Board of Governors because the company isn’t a bank, Fed staff officials said. The central bank is taking on the credit risk from Bear Stearns collateral, lending the funds through JPMorgan Chase & Co. because it’s operationally simpler to accomplish than a direct loan, the staff said on condition of anonymity.
Bernanke took advantage of little-used parts of Fed law, added in the 1930s and last utilized in the 1960s, that allow it to lend to corporations and private partnerships with a special board vote…. Unanimous vote.
[But, I predict, there are too many dikes and not enough fingers. You might want to get some cash out of your bank account, just for buying groceries and such, if you get my drift.]
I remembered my Feb. 15 post, and wondered if the sudden downfall of Spitzer, by the conscious choice by Federal investigators to publicly “out” him, was a payback for his revelation of the Administration’s complicity in the banking crisis. And I thought about writing up my questions.
And I decided NOT to write that post. It was conscious: because I am NOT qualified to write it. Happily, today, Greg Palast, who IS qualified to write it, wrote it.
Here is some to get you started. Please go and read it:
Instead of regulating the banks that had run amok, Bush’s regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of “federal pre-emption,” Bush-bots ordered the states to NOT enforce their consumer protection laws.
Indeed, the feds actually filed a lawsuit to block Spitzer’s investigation of ugly racial mortgage steering. Bush’s banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.
Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America.
Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.
The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers….
I knew it was a good story. But I also knew that I wasn’t the right writer to write it.
Bravo, Mr. Palast!