The folks who have been sinking America can be lovely companions – good conversationalists, charming dinner company, amusing raconteurs – the kind of affable folks you’d want as pals. Just so long as you steer clear of politics and what they do for a living.
I was an invitee sitting across a dinner table from one of those delightful people this Thanksgiving. He was an investment bank institutional securities salesman. The two of us were doing absolutely fine, on the verge of becoming BFF’s, until he asked me how I make my living.
I went through my litany of stuff-I-do-for-money and then I made the mistake of mentioning a non-income-producing sideline of mine, this blog.
“Blogger?” he asked, sounding just a bit suspicious, as if I had told him I’m an assistant university football coach who also leads a cub scout troop and that I occasionally indulge in a bit of playful shower-room towel snapping with the little boys.
“One of those left-wing bloggers?” he asked. As if right-wing bloggers, political neuters and recipe publishers were somehow absent from the blogosphere, if not the entire Internet.
I told him, as I tell everyone, that I’m a 1950’s middle-of-the-road Democrat who has been standing politically pat for over half a century. Meanwhile, the rest of America forgot its roots and its own needs and has begun a long, mad hike to the right. So that today, for example, some people are willing to bargain away – or let the Obama Administration bargain away – a good part of their own old-age Social Security and Medicare benefits in exchange for a minor upward adjustment in taxes for the wealthiest Americans. And that increase would be a small fraction of the rates the rich paid half a century ago.
Before you could say “financial crisis,” we were knee-deep into a mortgage meltdown fracas. “It’s all the fault of the U.S. Government,” he insisted. “Fannie Mae was selling mortgages to people who weren’t qualified.”
I’ll spare you ninety percent of the impassioned back-and-forth wonkery that followed. Suffice it to say that the guy across the table absolved every financial entity on the planet for the mortgage crisis – Fanny Mae and Freddie Mac excepted. He put the blame squarely on Congress and its insidiously destructive secret agents, Fanny and Freddy, for encouraging as many Americans as possible to be homeowners, in part so they’d have a direct stake in the financial stability of America.
I in turn pointed out that it was the mortgage originators who were encouraging liars loans – and putting pressure on borrowers to go for adjustable rate mortgages rather than long term fixed rates – and that this was neither the law nor the intent of Congress. And that it was Lehman, and Goldman-Sachs, and Citi Corp, and Bear Sterns, and Merrill Lynch, and on and on who were peddling bad mortgage securities. Not to mention the role of AIG, the firm that insured the junk without the reserves to pay the insurance claims if they ever came due.
The securities guy, in turn, assured me that Ace Greenberg, the former CEO of AIG, and Sandy Weill, the former CEO of Citicorp had enough “skin in the game” (money invested in their own institutions) that they would have never let this happen had they been in charge.
(Bullpoop! The banks were packaging and trading mortgage crapola, and AIG was insuring it, while Ace and Sandy were still wallowing in the cash from their annual incentive bonuses, set by the boards of directors they helped to appoint. Oh, not to mention Jimmy Cayne, the CEO at Bear Sterns whose “skin in the game” didn’t stop him from allowing his now-defunct company to become a major player in the mortgage derivatives market.)
As for not doing due diligence on mortgage applications, or robo-signing foreclosure orders, or packaging baroque tranches of mortgages into securities that were virtually impossible to evaluate, well, my almost-BFF insisted, that was because there were too many mortgages to process, y’see. And besides, those people who got foreclosed on shouldn’t have had mortgages in the first place.
What it all came down to was, it was everybody’s fault except the financial industry’s for in effect “forcing” the industry peddle that worthless stuff.
Betcha didn’t know that before!
And to think I naively thought the devil made them do it.