A problem with the Country Wide the WaMU settlements.
We have to consider the externalities of the fraud. While a $337 million dollar fine may be sufficient for the individuals defrauded by Country Wide, the cost to the nation and the state was much greater. These could be called externalities or collateral damage. And the costs are truly astronomic. See posts below.
Remember what caused this crisis – it wasn’t the government. First came the housing bubble and the selling of near fraudulent home mortgages by corporations such as Country Wide and WaMU– thus the settlements. To make a profit major banks and corporations looted the economy creating an international meltdown.
Now we have cuts in parks, in universities, in nurses, libraries. School children did not create this crisis. The major bankers, finance capitalists in the U.S. robbed the bank last year – and the federal treasury. They took hundreds of billions of dollars – Goldman Sachs alone took $10 Billion. For example, Ken Lewis of Bank of America received an $ 81 million dollar pension. They have not even been punished. One thing we should do is arrest the top 100 executives and CEO’s of these companies, give them a fair trial, and throw them in jail. Until we arrest some people there will be no real changes.
Note: House Concurrent Resolution 85. Dec. 2011.
Resolved by the House of Representatives (the Senate concurring), That it is the sense of the House of Representatives that any action taken by the Department of Justice should be consistent with the following goals:
(1) The mortgage servicers who engaged in fraudulent behavior should not be granted criminal or civil immunity for potential wrongdoing related to illegal mortgage and foreclosure practices.
(2) The Federal Government and State attorneys general should proceed with full investigations into claims of fraudulent behavior by mortgage servicers.
(3) Any financial settlement reached with mortgage servicers should appropriately compensate for, and accurately reflect, the extent of harm to all victims, including homeowners and State pension beneficiaries, caused by the mortgage servicers’ fraudulent behavior.
For more see:
Those who committed the fraud should pay for the external costs of the Great Recession. Our financial system as a whole crashed not because of one bank. Goldman Sachs certainly played a major role as did JP Morgan Chase, Morgan Stanley, and CitiCorp, along with the many corporate finance institutions like Bear Sterns, Merrill Lynch, Lehman Brothers, WaMu.
While millions of working people have continued to lose their jobs, their homes, their health care, and their futures, it is return to business as usual for Wall street firms, return to casino capitalism.
We had a systemic breakdown because nearly all of our policy makers, academics, politicians, and pundits promoted a failed, self serving ideology of self-correcting financial markets. Finance profiteers walked off with big bucks while contributing to the crash of the system.