Mayor Bloomberg is supposed to be the technocratic mayor of New York City—the anti-wingnut. So what’s he doing saying things like this (emphasis mine):
“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have gotten them without that.
“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and congress certainly isn’t going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for.”
This is the Peter Wallison/AEI/right-wing media take on the crisis and it’s flat false, as most bankers will tell you. About the kindest thing you can say about it is that it’s ignorant.
— I’m no Tom Friedman fan (that’s also being kind here), but his column this weekend is actually worth a read:
Our financial industry has grown so large and rich it has corrupted our real institutions through political donations. As Senator Richard Durbin, an Illinois Democrat, bluntly said in a 2009 radio interview, despite having caused this crisis, these same financial firms “are still the most powerful lobby on Capitol Hill. And they, frankly, own the place.”
Our Congress today is a forum for legalized bribery. One consumer group using information from Opensecrets.org calculates that the financial services industry, including real estate, spent $2.3 billion on federal campaign contributions from 1990 to 2010, which was more than the health care, energy, defense, agriculture and transportation industries combined. Why are there 61 members on the House Committee on Financial Services? So many congressmen want to be in a position to sell votes to Wall Street.
We can’t afford this any longer. We need to focus on four reforms that don’t require new bureaucracies to implement. 1) If a bank is too big to fail, it is too big and needs to be broken up. We can’t risk another trillion-dollar bailout. 2) If your bank’s deposits are federally insured by U.S. taxpayers, you can’t do any proprietary trading with those deposits — period. 3) Derivatives have to be traded on transparent exchanges where we can see if another A.I.G. is building up enormous risk. 4) Finally, an idea from the blogosphere: U.S. congressmen should have to dress like Nascar drivers and wear the logos of all the banks, investment banks, insurance companies and real estate firms that they’re taking money from. The public needs to know.
Capitalism and free markets are the best engines for generating growth and relieving poverty — provided they are balanced with meaningful transparency, regulation and oversight. We lost that balance in the last decade.
— The Wall Street Journal‘s Scott Thurm has a good piece following yesterday’s report on the Nabors CEO’s $100 million golden parachute. He finds several other huge exit packages waiting to be triggered:
At least three other chief executives are in line for payouts of more than $50 million from “golden parachutes” opened by pending acquisitions, according to a Wall Street Journal analysis of Securities and Exchange Commission filings. Topping the list: Sanjay Jha, CEO of Motorola Mobility Holdings Inc., who could receive $65.7 million as part of Google Inc.’s acquisition of the cellphone maker, according to Motorola’s filings.
Four other CEOs could receive exit packages of $30 million or more from deals that are pending or were completed this year. In most cases, the CEOs must leave the acquiring company within one or two years to qualify for the payout.
And Joe Nocera had a really nice column on former Goldman CEO and Democratic politician Jon Corzine and how he bankrupted MF Global and almost walked away with $12 million.
We found out today that the reason Corzine didn’t get his cash is potential acquirers backed off after discovering that MF Global may have improperly used nearly a billion dollars of clients’ money. That’s one to watch.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.