Two things have been crystal clear from the outset in the Obama Administration:
1. Banksters cannot be held accountable for anything no matter how awful, no matter how criminal, because that would interfere with the all-important financial sector and murder the confidence fairy.
2. The government won’t enact any programs that would actually help homeowners who have been destroyed by the housing crisis, because that might mean that banksters would have to take losses.
As to point 1, Secretary of the Treasury Timothy Geithner told then New York Attorney General Andrew Cuomo not to prosecute banksters for fraud, because it would kill the Confidence Fairy. Then we found out about the Obama Administration plan for coping with the biggest case of fraudulent banking ever. Paul Krugman saw it as a muddle through plan: “… hoping that the banks can earn their way back to health.” Krugman didn’t like the plan, and it was just one more time Krugman was right and for the right reasons. Now as dday explains, HUD Secretary Shaun Donovan has joined the rest of the Obama Administration in assaulting representatives of the public who stand up to the banksters.
As to point 2, Obama refused to work the Congress to pass cramdown, letting the banksters win, despite his campaign promises. He and Geithner pushed hard for the useless HAMP, a total failure, as Neil Barofsky, the Special Inspector General for TARP said in a report late last year. Now 30 months into his term the Obama Department of Justice has made it perfectly clear that no banksters were guilty of anything. None! It beggars the imagination that this decision was made without even the pretense of a real investigation, and in the face of reports of wire fraud, mortgage fraud and securities fraud, and fraud on state courts around the nation, reports prepared by special commissions, bankruptcy examiners, and congressional committees.
The Department of Justice and the SEC have both voluntarily surrendered to the banksters as Gretchen Morgenson and Louise Story explain. These flabby agencies decided that they were too tough on corporate criminals, so they decided not to do their own investigations, but to rely on the criminals to investigate themselves and report to the feds. In the case of the SEC, the report itself might be punishment enough.
Our federal government has given up on law enforcement. Now we find out that not only are the Feds ignoring their own responsibility to protect us from corporate criminals, they are actively discouraging State Attorney Generals from conducting their own investigations and prosecutions. Among other administration officials, Shaun Donovan, the Secretary of HUD, is pressuring Eric Schneiderman to drop his investigation into the foreclosure fraud, and to agree to release the banks and their employees from criminal liability in exchange for a few billion dollars. They want the State AGs to stop investigating, and to settle before they understand the full scope of wrong-doing.
Hey, it’s good enough for the SEC and the Department of Justice. Screw the American People. Except for the Corporate People.