Eliot Spitzer: Bush Shielded Subprime Predators

Eliot Spitzer had a deep understanding of the corruption on Wall Street, and he wasn't afraid to take on corrupt fat cats and politicians. Early on he warned that predatory lenders were gauging the little guy, and if left unchallenged, their greed explode our financial system.

Spitzer--along with the country's attorneys general--sought permission to do what the Bush administration refused to do: prosecute mortgage industry lawbreakers. They were flatly denied.

Shortly before Spitzer's fall from grace, he penned a letter to the editor of the Washington Post which included this warning:

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

It's clear that Bush and his cronies just don't care about average Americans. Think about it. The Bush regime not only didn't do their job but they actively worked to bar states from seeking to protect the people.

Now, the Bush regime proposes to bailout Wall Street and nothing for the subprime victims. A modified version of that bailout bill was just defeated -- ironically, by the Republicans egged on by the kings of chaos on rightwing radio. These racists blame the Wall Street meltdown on minority victims of subprime predator lenders.

Link: Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers

Eliot's Mess: The $200 billion bail-out for predator banks and Spitzer charges intimately linked

My "America First" Bail Out Plan: Help The People; Prosecute Wall Street Executives, Corporate Lobbyists and Corrupt Politicians

I agree with Kaptur, Kucinch and Obama, so I offer my own complementary plan:

My plan also focuses on preserving home ownership; however, I'll do it by aligning mortgage payments with the market value of their properties. Lenders would be mandated to refinance existing mortgages to sub prime borrowers (exclusive of investors) at risk of foreclosure.

The refinancing packages would come with a subsidy of between 5% and 30% of principal; long-term, fixed rates; transferability; and default insurance.

The result is greater affordability, stability as well as liquidity.

I figure such a package costs upwards of $360 billion, or about half of what Bush wants to give to Wall Street. However, the the cost to the public diminishes over time as the housing market stabilizes and homes begin selling at appreciated values.

I would add repayment clauses to reclaim all or partial payment on the subsidies for homes selling at appreciated values. Additionally, I would add a transaction surcharge on exotic and large Wall Street transactions, and on executive pay, bonuses and dividends in order to re-coup the public investment.

I would also institute tighter oversight and enhanced regulation over the credit markets; outlaw certain Wall Street practices which do nothing but generate huge fees; prosecute Wall Street executives, mortgage brokers, real estate brokers and others involved in deceptive practices and/or shirking their fiduciary responsibilities; and I would only license the selling and packaging of mortgages and mortgage products to insured, bonded and regulated institutions, banks and consumer credit unions.

What say you?

Rep. Marcy Kaptur's New Rules for Wall Street

U.S. Representive Marcy Kaptur (D-Ohio) skewers the Bush regime and Wall Street fat cats on their rush to bail out the greedy. In addition, Kaptur proposes a series of reforms focused on securing the finances of the people while prosecuting Wall Street criminals.

Her rallying cry - Real Reform Now or Nothing!

Dennis Kucinich: Profits Are Theirs; Losses Are Ours

Dear Friend,

The U.S. government has been turned into an engine that accelerates the wealth upwards into the hands of a few. The Wall Street bailout, the Iraq War, military spending, tax cuts to the rich, and a for-profit health care system are all about the acceleration of wealth upwards. And now, the American people are about to pay the price of the collapse of the $513 trillion Ponzi scheme of derivatives. Yes, that’s half a quadrillion dollars. Our first trillion dollar compression bandage will hardly stem the hemorrhaging of an unsustainable Ponzi scheme built on debt "de-leverages."

Does anyone seriously think that our public and private debts of some $45 trillion will be paid? That the administration's growth of the federal debt from $5.6 trillion to $9.8 trillion while borrowing another trillion dollars from Social Security has nothing to do with this? Does anyone not see that when we spend nearly $16,000 for every family of four in our society for the military each year that we are heading over the cliff?

This is a debt crisis, not a credit crisis. Just as FDR had to save capitalism after Wall Street excesses, we have to re-invigorate our economy with real - not imaginary - growth. It does not address the never-ending war on the middle class.

The same corporate interests that profited from the closing of U.S. factories, the movement of millions of jobs out of America, the off-shoring of profits, the out-sourcing of workers, the crushing of pension funds, the knocking down of wages, the cancellation of health care benefits, the sub-prime lending are now rushing to Washington to get money to protect themselves.

The double standard is stunning: their profits are their profits, but their losses are our losses.

This bailout will not bring real jobs back to America. It will not bring back jobs that make things. It does not rebuild our schools, streets, neighborhoods, parks or bridges. The major product of this financial economy is now debt. Industrial capitalism has been destroyed.

In the next few days I will push for a plan that includes equity for every American in any taxpayer investment in this so-called bail-out plan. Since the bailout will cost each and every American about $2,300, I have proposed the creation of a United States Mutual Trust Fund, which will take control of $700 billion in stock assets, convert those assets to shares, and distribute $2,300 worth of shares to new individual savings accounts in the name of each and every American.

I will also insist that all of the following issues be considered in whatever Congress passes:

1) Reinstatement of the provisions of Glass-Steagall, which forbade speculation

2) Re-regulation of the finance, insurance, and real estate industries

3) Accountability on the part of those who took the companies down:
a) resignations of management
b) givebacks of executive compensation packages
c) limitations on executive compensation
d) admission by CEO's of what went wrong and how, prior to any government bailout

4) Demands for transparencey
a) with respect to analyzing the transactions which took the companies down
b) with respect to Treasury's dealings with the companies pre and post-bailout

5) An equity position for the taxpayers
a) some form of ownership of assets

6) Some credible formula for evaluating the price of the assets that the government is buying.

7) A sunset clause on the legislation

8) Full public disclosure by members of Congress of assets held, with possible conflicts put in blind trust.

9) A ban on political campaign contributions from officers of corporations receiving bailouts

10) A requirement that 2008 cycle candidates return political contributions to officers and representatives of corporations receiving bailouts

11) And, most importantly, some mechanism for direct assistance to homeowners saddled with unreasonable or unmanageable mortgages, as well as protection for renters who have lived up to their obligation but fall victim to financial tragedy when the property they live in undergoes foreclosure.

These are just some thoughts on the run. You will hear more from me tomorrow.

Dennis J Kucinich
www.Kucinich.us
216-252-9000
877-933-6647