fbpx
Politics Foreign Affairs Culture Fellows Program

Mr. Banker regrets

Nick Kristof visits with a banker who says his professional class is mostly responsible for the home mortgage debacle. Excerpt: Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable — and that all this was driven by pressure from the top. “You’ve got somebody making $20,000 […]

Nick Kristof visits with a banker who says his professional class is mostly responsible for the home mortgage debacle. Excerpt:

Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable — and that all this was driven by pressure from the top.

“You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,” he said. “That was crazy, but the banks put programs together to make those kinds of loans.”

Especially when mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

“The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.”

Kristof said the Federal Reserve bailout of banks is not a scandal; the Fed is the lender of last resort, and its action no doubt saved the US financial system from collapse. But:

Yet what is scandalous is the basic unfairness of what has transpired. The federal government rescued highly paid bankers from their reckless decisions. It protected bank shareholders and creditors. But it mostly turned a cold shoulder to some of the most vulnerable and least sophisticated people in America. Last year alone, banks seized more than one million homes.

Follow the money from Wall Street to Washington. See, this kind of thing is why, when I make my move this month, I’m registering to vote as an Independent, and leaving the Republican Party. I have very, very little faith that the Democrats will do anything serious about this kind of thing. But I have 100 percent certainty that the Republicans won’t, that they will defend and defend and defend bankers and the priorities of the very rich until the bitter end. Why, just this week:

Republicans in the U.S. Senate want to cover the cost of extending a payroll tax cut by freezing federal workers’ pay through 2015 and reducing the federal civilian workforce by 10 percent, putting them at odds with Democrats over how to pay for the $119.6 billion tax break.

The proposal counters efforts by President Barack Obama and Democrats to expand the payroll tax cut and pay for it by imposing a 3.25 percent surtax on income above $1 million.

Because it’s better to cut the pay (given inflation) of middle-class government employees, and add more of them to unemployment rolls, than to ask millionaires to pay more tax. Hey, they tend to vote Democrat anyway, so who cares, right? I see. Got it. But seriously, this is the kind of conservatism middle and working class Americans are supposed to support? More Wall Street, less Main Street?

Advertisement

Comments

Want to join the conversation?

Subscribe for as little as $5/mo to start commenting on Rod’s blog.

Join Now