by BAR executive editor Glen Ford
President Obama hoped to announce a monetary “settlement” of massive banker criminality in housing foreclosures that would grant banks immunity from prosecution.” But he was thwarted by a small group of state attorneys general that wanted real investigations, forcing the president into setting up a toothless enforcement unit of his own. For Wall Street banksters, impunity and immunity are the continuing states of the union.
State of Obama: Immunity for Wall Street
by BAR executive editor Glen Ford
“Every action he has taken as president has been to protect the innocents on Wall Street.”
Empire and the banks. President Obama’s State of the Union address, bracketed by imperial bombast, made actual news with yet another administration maneuver to protect Wall Street from the wrath of the states. The remainder of his speech was mainly a rehash of previous policies, heavy on tax tinkerings that would have made a previous generation of moderate Republicans – a now extinct breed – proud.
The only newsworthy item, the creation of a “special unit of prosecutors” that the president announced would “expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis,” is not an Obama initiative, but a response to unwanted pressures. Up until almost the moment of the presidential address, the administration has been bullying state attorneys general to drop their independent investigations into banker criminality in the 2008 meltdown and the foreclosure of millions of Americans’ homes. The so-called “robo-signing” scandal calls into question the fundamental legality of Wall Street mortgage securities practices – what some have described as the “crime of the century.” The small group of attorneys general – variously numbered between 5 and 15 – have been buttressed by a vocal Campaign for a Fair Settlement, made up of consumer and labor groups and activist organizations such as MoveOn.
“Obama had hoped to roll over the recalcitrant attorneys general in time to make the settlement the centerpiece of his State of the Union.”
Obama’s operatives have doggedly pressed for a settlement that would effectively give banks immunity from prosecution. Instead, home owners would be “compensated” from a paltry fund of no more than $25 billion – a drop in the bucket, considering the trillions in housing values that disappeared into illegally securitized air in the catastrophe, and much of the money might not even come out of the bankers’ own accounts. Obama had hoped to roll over the recalcitrant attorneys general in time to make the settlement the centerpiece of his State of the Union.
The “special unit of prosecutors,” officially dubbed the Unit on Mortgage Origination and Securitization Abuses, is to be co-chaired by New York Attorney General Eric Schneiderman, whom the White House had booted out of a negotiating committee because of his opposition to Obama’s banker protection racket. Last night, at the joint session of Congress, Obama sat Schneiderman in the First Lady’s box, to give the impression that he and the obstinate New Yorker had been on the same page all the time. Nothing could be farther from the truth. Obama was trying to shut down the attorney generals’ probes into banker criminality, and was finally forced to set up a federal unit of his own. However, with the “investigation” now in Obama’s hands, de facto banker immunity may have been achieved, and the puny “settlement” could soon be announced. Wall Street will be pleased, and no doubt reciprocate with hundreds of millions in campaign contributions.
“With the ‘investigation’ now in Obama’s hands, de facto banker immunity may have been achieved.”
U.S. Attorney Eric Holder, the former corporate lawyer, has been a good soldier. His own investigations of the meltdown and its aftermath – if they actually existed – have resulted in not a single corporate bad actor going to jail. Although Obama told the Congress and the people that what happened when the “house of cards collapsed” was “wrong,” he has also opined that most of what the bankers did was “not illegal.” Every action he has taken as president has been to protect the innocents on Wall Street.
“We’ve put in place new rules to hold Wall Street accountable, so a crisis like that never happens again,” said the president. Nonsense. Obama fought tooth and nail to defend the fatal derivatives market from serious tampering by progressive Democrats. The crisis of 2008 was set off by the multiplier effect of derivatives on the collapse of toxic mortgage securities. At the time, at least $600 trillion dollars in derivatives loomed over the planet. Today, derivatives have rebounded to…over $600 trillion. The banks that were “too big to fail” are even bigger, and there are fewer of them – meaning, capital is more concentrated than before. Obama’s “new rules” have preserved and further consolidated the hegemony of finance capital over U.S. economic and political life. The world economy teeters on the brink.
But, “America is back!” says the president. It is the “indispensable nation” – the one that treats the rest of the planet, and most of its own citizens, as entirely dispensable. Hail to the Chief!
BAR executive editor Glen Ford can be contacted at [email protected].
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