General Discussion
In reply to the discussion: weigh in if you hated Matt Taibbi before you read this (because it's what you do) [View all]DirkGently
(12,151 posts)Easier to prosecute? Definitely. But not more egregious and not by a thousand percent as damaging an example of law breaking and willful malfeasance than the suprime / housing bubble collapse and all its associated shenanigans.
There was crime, and fraud on a massive scale, and much more could and should have been done, going well back into the Bush years.
I'd say both administrations failed catastrophically in that regard. But tossing Taibbi under the partisan bus because he dared to point out something everyone knows -- that efforts by anyone to bring anyone to account for any of this have been pitiful -- does not hold up to scrutiny for good faith.
Here's some of Taibbi's excellent work on a civil trial illustrating just one area of fraud going on throughout the mortgage crisis:
http://www.rollingstone.com/politics/blogs/taibblog/lurid-subprime-scams-unveiled-in-long-running-fraud-trial-20131212
( snip )
Just to give one example, Household had a particularly disgusting scam going they called it the "EZ Pay Plan."
In it, customers were urged to junk their old (and presumably safe) mortgages and switch to a new Household Refinance plan that would be both more expensive and more dangerous, using a little sleight of hand. Among other things, they told customers they could save money and reduce their interest rate by switching from a monthly payment plan to a biweekly payment plan.
There were two things going on here. One and this is so sleazy it's almost funny by getting customers to make payments biweekly instead of monthly, they would essentially box borrowers into making an extra payment every year (remember, there are 52 weeks in a year). The other is that the company was using word games to try to tell people they would be paying lower rates, when in fact they would not be.
One example of the fraud perpetrated on borrowers with predatory practices. We did a little a better, unsurprisingly, at prosecuting fraud against investors.
If anything, the problem with punishing anyone was that the entire subprime system became a whirling cesspool of ever-more-egregious scams. Sure, de-regulation got the ball rolling, but there are enough facts and perpetrators out there that we could have done infinitely more in terms of punishing actual crime.