In 1948, the architect of the post-war American suburb, William Levitt, explained the point of the housing finance system. “No man who owns his own house and lot can be a Communist,” he said. “He has too much to do.”
It’s worth reflecting on this quote on the ten-year anniversary of the financial crisis, because it speaks to how the architects of the bailouts shaped our culture. Tim Geithner, Ben Bernanke, and Hank Paulson, the three key men in charge, basically argue that the bailouts they executed between 2007 and 2009 were unfair, but necessary to preserve stability. It’s time to ask, though: just what stability did they preserve?
These three men paint the financial crisis largely as a technical one. But let’s not get lost in the fancy terms they use, like “normalization of credit flows,” in discussing what happened and why. The excessively wonky tone is intentional – it’s intended to hide the politics of what happened. So let’s look at what the bailouts actually were, in normal human language.
The official response to the financial crisis ended a 75-year-old American policy of pursuing broad homeownership as a social goal. Since at least Franklin Delano Roosevelt, American leaders had deliberately organized the financial system to put more people in their own homes. In 2011, the Obama administration changed this policy, pushing renting over owning. The CEO of Bank of America, Brian Moynihan, echoed this view shortly thereafter. There are many reasons for the change, and not all of them were bad. But what’s important to understand is that the financial crisis was a full-scale assault on the longstanding social contract linking Americans with the financial system through their house.
The way Geithner orchestrated this was through a two-tiered series of policy choices. During the crisis, everyone needed money from the government, but Geithner offered money to the big guy, and not the little guy.
First, he found mechanisms, all of them very technical—and well-reported in Adam Tooze’s new book Crashed—to throw unlimited amounts of credit at institutions controlled by financial executives in the United States and Europe. (Eric Holder, meanwhile, also de facto granted legal amnesty to executives for possible securities fraud associated with the crisis.)
Second, Geithner chose to deny money and credit to the middle class in the midst of a foreclosure crisis. The Obama administration supported this by neutering laws against illegal foreclosures.
The response to the financial crisis was about reorganizing property rights. If you were close to power, you enjoyed unlimited rights and no responsibilities, and if you were far from power, you got screwed. This shaped the world into what it is today. As Levitt pointed out, when people have no stake in the system, they get radical.
Did this prevent a full-scale collapse? Yes. Was it necessary to do it the way we did? Not at all.
Facebook Fired Pro-Trump & Anti Hillary Founder of Oculus
Every so often, Silicon Valley’s virtue-signaling, shadowbanning, anti-conservative media titans appear in Congress or devise a quick PR campaign to show to the world just how truly impartial they are with zero liberal bias. And every single time it backfires as their true ideological face quickly emerges from behind a fake, hypocritical mask.
Take the case of former Facebook executive, Oculus co-founder and virtual-reality wunderkind Palmer Luckey, who was a rising star of Silicon Valley when, at the height of the 2016 presidential contest, he donated a modest $10,000 to an anti-Hillary Clinton group. His donation sparked a backlash from his colleagues, which then led to him being put on leave, and six months later he was fired.
What is odd about Luckey’s termination, is that when testifying before Congress about data privacy earlier this year, Mark Zuckerberg denied, or rather lied that the departure had anything to do with politics. In fact, neither Facebook nor Mr. Luckey ever said why he left the social-media giant.
Until now: according to a report from the WSJ, Luckey told people the reason for his termination from that bastion of apolitical impartiality Facebook, was his support for Donald Trump and the furor that his political beliefs sparked within his employer, and Silicon Valley, some of those people say.
Maxine Waters Wants Trump To Keep His Mouth Shut
As Democrats prepare to let the subpoenas fly early next year, Rep. Maxine Waters (D-CA.), who is preparing to become the first black female chairwoman of the House Financial Services Committee in January, reiterated her vow to investigate President Trump’s ties to Deutsche Bank – which she called “one of the biggest money laundering banks in the world” – during an interview with AM Joy, adding that “it’s one of the big issues that we will be working on.”
During the wide-ranging interview, Waters also blasted President Trump’s threats to revoke federal funding from California, saying she wished he would “keep his mouth shut” when it comes to all issues pertaining to her home state (while offering no substantive response to Trump’s criticisms of harmful forest-management policies that have exacerbated the fires).
Ultimately, Maxine said, Trump and his fellow Republicans attack her because they’re afraid of having a “strong, black woman” in charge of the financial services committee.
“That’s the opposition talking about what would happen if this strong, black woman Maxine Waters is the chair of the Financial Services Committee,” Waters said, becoming animated.
“They’ve never seen anybody like me before. There’s never been a woman in the history of this country that’s been the chairperson of the Financial Services Committee, and certainly never a black woman.”
Circling back to Waters’ response to Trump, the congresswoman, who was one of the targets of several attempted mail bombings last month, accused Trump of being “clueless” about issues of “poor management” and that he was talking about something he has “no knowledge of”.
Judge To Mueller: Prove It
A Washington federal judge on Thursday ordered special counsel Robert Mueller’s team to clarify election meddling claims lodged against a Russian company operated by Yevgeny Prigozhin, an ally of Russian President Vladimir Putin, according to Bloomberg.
Concord Management and Consulting, LLC. – one of three businesses indicted by Mueller in February along with 13 individuals for election meddling, surprised the special counsel in April when they actually showed up in court to fight the charges. Mueller’s team tried to delay Concord from entering the case, arguing that thee Russian company not been properly served, however Judge Dabney Friedrich denied the request – effectively telling prosecutors ‘well, they’re here.’
Concord was accused in the indictment of supporting the Internet Research Agency (IRA), a Russian ‘troll farm’ accused of trying to influence the 2016 US election.
On Thursday, Judge Freidrich asked Mueller’s prosecutors if she should assume they aren’t accusing Concord of violating US laws applicable to election expenditures and failure to register as a foreign agent.
Concord has asked Dabney to throw out the charges – claiming that Mueller’s office fabricated a crime, and that there is no law against interfering in elections.