A synopsis of Bill Moyers' latest report on the financial crisis and its origins
The original Tea Party wasn't directed just against the British redcoats. Colonial patriots also took aim at the East India Company, the joint-stock enterprise originally chartered by the first Queen Elizabeth. Over the years, the government granted them special rights and privileges, which the owners turned into a monopoly over trade, including tea.
It may seem a bit of a stretch from tea to credit default swaps, but the principle is the same: when enormous private wealth goes unchecked, regular folks get hurt -- badly. That's what happened in 2008 when the monied interests led us up the garden path to the great collapse.
So the Tea Party crowd should be demanding accountability from Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, and scores of hedge funds and private equity firms that constitute what we loosely call Wall Street.
But are the culprits taking responsibility for devastating the lives of millions of ordinary Americans? Don't kid yourself. If you've been watching them appear before congressional committees and the Financial Crisis Inquiry Commission -- the independent inquiry that's supposed to find out what really happened -- you've no doubt been reaching for the Pepto-Bismol.
"It was all an enormous accident," the financiers wail, "a once in a century calamity, an act of God." But of course that's not true. Lots of people saw it coming and made fortunes, taking off with the essentially stolen loot at the expense of the millions who lost their jobs, homes and savings. Plus, the banksters continued to game the system even after the collapse -- still paying themselves exorbitant salaries and bonuses while hitting everyday people with usurious same-day paycheck loans, outrageous credit card fees and other charges all the while refusing to provide the loans to small and medium-sized businesses that would allow them to create the jobs and consumers our economy and our people so desperately need.
The Tea Party gang really should have dropped by those Senate hearings this week looking into the failure of Washington Mutual, the bank that went belly up during the meltdown in September 2008 the largest such failure in American history.
As an 18-month Senate investigation revealed, WaMu made subprime loans that its executives knew were rotten, then packaged them as mortgage securities and pawned them off on unsuspecting investors. Loan officers were paid by the number of mortgages they sold, and ran up the numbers by lying to customers and falsifying data so they could make bigger bucks and win trips to Maui and the Caribbean. At one Washington Mutual office in Montebello, California, 83% of the housing loans contained bogus information.
Then there's Lehman Brothers, which secretly controlled a company called HudsonCastle, which was used by Lehman to borrow money for them, and also to hide bad investments in commercial real estate and subprime mortgages, so that Lehman's investors and stockholders wouldn't know how bad off the company really was.
But the week's award for sheer gall goes to a Chicago area hedge fund called Magnetar, which worked with Citigroup, JPMorgan Chase, Merrill Lynch and other investment banks to create toxic CDO's -- collateralized debt obligations -- securities backed by subprime mortgages that management knew were bad, knowledge that Magnetar used to bet against the very same investments they had recommended to buyers, thereby selling short and making a fortune.
To simply call all of this "creative accounting" is to disguise what really happened. What this really amounts to is corruption, cynicism and greed on a scale that would make the Roman Emperor Caligula cringe. Or rather, the Emperor Nero, who didn't just poison the citizens of Rome; legend has it that he burned the place down, fiddling around in the ashes, just like our Wall Street tycoons did and are still doing.
So, since we know all this, why is it so hard to hold Wall Street accountable ? --which brings us to what the Tea Party people should have been complaining about this week. The banking industry and corporate America are fighting against proposed financial reform with all the money and influence at their disposal, attempting to preserve a system that would enable them to ransack the country once again.