On January 11, 2009, I had occasion to view broadcaster Sean Hannity on the Fox News Network. Supposedly, Mr. Hannity is an educated journalist who can tell the difference between up, down, left, right, and right and wrong. Therefore one is moved to ask why is this man trying to sell a dead partisan horse, to the same beleaguered public that was saddled with that corpse in the first place?

His claim - a familiar one - is that the Democrats (with an emphasis on the Clinton administration) forced the banks to give mortgages to people who couldn't afford the homes they were buying. How is this possible? We the taxpayers have given $165 billion dollars to the banks in a bail out and, to date, we have been unable to 'force' them to tell us what they did with the money.

At a time when these institutions did not in any way require federal government/taxpayer largess, how was Congress able to force them to do anything they didn't want to do? The answer, they couldn't and didn't, for during the period when the huge 'taken off the top' profits were being made, not one single bank protested.

Those involved executed this fiasco because they wanted to make immoral and sinful profits: and for close to six years that is exactly what they did. But when the bottom fell out - all of a sudden it's the fault of an over extended public and the Democratic Party.

As it has been pointed out so many times in the past, it was these same financial institutions that lobbied a Republican controlled House and Senate to repeal the Glass-Steagall Act of 1933 (which prohibited the joining of banking and lending), which President Bill Clinton signed into law his during his last year in office. But if one is to believe Mr. Hannity the Democrats and President Clinton - without any Republican involvement whatsoever, were solely responsible for the housing crisis by their involvement in the Community Reinvestment Act (enacted by Congress in 1977): thereby laying the groundwork for the Housing Crisis.

However, there is not a single recorded instance where the use of such 'force' can be documented, and available figures don't support the accusation.

The Struggle to Survive - In the Heat of Politics

To varying degrees both parties had a hand in the building of this economic mess the nation, and the world, has become hopelessly stranded in. But the fact remains that the Republican Party, with total control of the Congress and for three years following the passage of the Community Reinvestment Act, could have stopped the financial train wreck that was coming.

So why does this man think we are 'all' data blind and stupid? The answer is simple: partisan politics.

The Democrats and the Republicans appear to be in each other's death grip as they fight to have their principles survive: both sides oblivious to the painful financial struggles of the American taxpaying public.

If that was not the case on the Democratic side, then why a 3.6 trillion dollar stimulus bill, containing enough Liberal Social Agenda pork to choke a donkey and an elephant? And why the main objection to it from the Republican side be the possibility of a tax increase on big business and the wealthy - their long-time clientele?

Fair Play is Fair Play

Although it is not my usual policy to quote from Liberal publications, I firmly hold, as always, that "Truth, Justice and Morality have no political affiliation".

Therefore, when one encounters a fair assessment from a Liberal direction, one is obligated to reveal it. So is the case from Trouthout (www.trouthout.org), a Liberal oriented web publication in which the recent televised rage by commodity trader, Rick Santelli, is viewed from another vantage point:

The Santelli Screed Hits Wrong Target on Mortgage Bailout

Monday 02 March 2009

Commodity trader Rick Santelli made himself into a national hero of sorts with his televised diatribe about being forced to pay the mortgages of "losers" who could not afford, or would not pay, the full cost of their mortgage. Santelli apparently hit a chord among those who want to blame deadbeat homeowners for the country's economic woes.

    At the risk of spoiling a promising artistic and commercial venture, people should know that Mr. Santelli is firing at the wrong target. The big gainers from the latest plan to help homeowners are not "loser" homeowners, but rather banks and investors, who will earn far more on their loser loans than would otherwise have been possible.

This is easy to see if we just adhere to the most basic rule in policy analysis: follow the money. When we follow the money, we see that the government checks do not go to homeowners.

    The government checks are all made out to banks and loan servicers. In millions of cases where homeowners were not keeping up with their mortgages, the government will send checks to banks and investors that make up for much of the shortfall. In addition, the government could send them several thousand dollars more for their efforts in allowing people to stay in their homes.

Santelli's screed is part of a continuing effort to blame the poor and minority communities for the economic meltdown. There are millions of people who think the Community Reinvestment Act (CRA) was responsible for bad mortgages, when most of these mortgages were either made by institutions that were not covered by the CRA or were loans that would not have been covered by the Act even if the institution was covered. Of course, the idea that government bureaucrats were forcing banks to make loans that were hugely profitable at the time is laughable on its face.

    At some point Santelli and his followers are going to have to deal with reality. The problem is not poor and moderate-income homeowners or African-Americans or Latinos. The perps in this case where rich bankers, the vast majority of whom were white males.

Their enablers in policy circles were not the bleeding hearts trying to help the poor, but the Wall Street envoys from both political parties; people like Henry Paulson, Robert Rubin and, of course, Alan Greenspan. The people who sank the economy were the rich and powerful, not the poor and minorities.

Corporate Theft or Theft Incorporated?

As firms in America and around the world furlough their employees in huge numbers, we are simultaneously bombarded by headlines revealing the criminal or near criminal dealings of ' highly placed trust officials' within the financial community. The very same community by the way, that many Republicans wanted to manage our Social Security System.

FBI expects number of major financial bailout fraud cases to rise
Los Angeles Times-February 11, 2009 (excerpt)

Top FBI and Justice Department officials said they believed mortgage fraud and other types of corporate criminal behavior has contributed in great part to the economic tailspin. And they said they already have more than 2,300 open investigations into suspected illegal financial activity -- including 38 probes specifically linked to the crisis.

The Madoff / Allen Scandals - 58 Billion Gone - Just Like That

American businessman, Bernard Lawrence "Bernie" Madoff, former chairman of the NASDAQ stock exchange, and founder the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960 (sitting chairman until December 11, 2008), has been charged with perpetrating a $50 Billion dollar fraud, which may be - the largest investor fraud ever committed by an individual.

Financier charged with $9.2 billion fraud

February 17, 2009

NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission said Tuesday that it has charged financier R. Allen Stanford and three of his companies with orchestrating an $8 billion investment fraud. The SEC's complaint alleges that the fraud centered on a CD program in which Stanford International Bank promised "improbable and unsubstantiated high interest rates."

Bank of America's CEO is subpoenaed

cnn news - February 19, 2008

New York Attorney General Andrew Cuomo has been highly critical of Wall Street firms in general and Merrill Lynch in particular for the way they have conducted themselves in the midst of a financial crisis. "Merrill Lynch's decision to secretly and prematurely award approximately $3.6 billion in bonuses, and Bank of America's apparent complicity in it, raise serious and disturbing questions," Cuomo wrote in a letter to the House Committee on Financial Services.

It is important to note that none of the corporate or company officers involved in any of these scandals has as yet to see the inside of a jail.

Where Were the Controls for Our Runaway Economy?

The answer is as evident as the nose on a taxpayer's face. About 1890 Congress initiated economic controls that were beefed up after WW ll, such as Usury Laws, Securities and Stock Laws, Banking and Mortgage Lender Regulations and, most importantly - Anti Trust Laws.

The origins of antitrust:
Antitrust laws have existed for more than a century. During the late nineteenth century, the Industrial Revolution led to rapid expansion in business activity in the United States. Many industries (including railroads, oil drilling, and tobacco production) were originally small and geographically dispersed around the nation. As these small businesses consolidated into large national enterprises, they threatened to dominate entire industries across the country.

This perceived activity threatened the country's need to maintain diverse competition, and made it difficult for small businesses to stay afloat, encouraging practices that would be frowned upon today. Even back then public opinion ran against large enterprises, which became known as business trusts. In reaction to this type of rapid growth of industry, Congress specifically designed laws to combat this type of large company behavior and were dubbed - antitrust legislation. And the Sherman Act, passed in 1890 enacted strict prohibition of monopolies and restraints of trade.

Later laws defined more specific types of prohibited behavior, and the charging of different prices to different customers was to be illegal under certain circumstances, as was the practice of forcing consumers to buy multiple products in order to obtain the one they wanted.

Nevertheless, antitrust remains a particularly murky area of corporate law, made even murkier by the deliberate legal shenanigans of the Mega Corporations. The main problem with the modern interpretations of antitrust laws is that they depend almost entirely on how one chooses to define a market, which often plays into the hands of Super Corporations. The interpretation the government takes for a given merger rests largely on the Federal Trade Commission, which seeks to protect consumers and prevent anti-competitive business practices.

Unfortunately, in the last three decades or so this vital agency, like so many others, has become politically tainted. And in all practicality, evidenced by recent events, we can no longer trust them to non-partisan judgment.

As a practical matter, however, antitrust laws usually result in modifications to merger terms rather than killing deals outright. In many cases, merging companies will divest themselves of a certain portion of their joint businesses in order to ease antitrust concerns.

When Exxon and Mobil combined to form Exxon Mobil, there were some areas of the country in which the combined entity would have had an overwhelming percentage of the gas station market share. In response to this looming specter, the FTC conditioned its approval of the merger on Exxon Mobil's agreement to sell more than 2,400 gas stations to other oil companies in order to foster competition in those areas.

There are some who argue that antitrust laws have outlasted their usefulness, what with the economy becoming increasingly global. They make the case that applying antitrust laws to relatively small geographical areas may be unnecessarily provincial and irrelevant, compared to broader competition around the world: (Reference - antitrust actions against Microsoft are viewed as unfairly penalizing a large company simply because it happens to be the largest players in their particular industry).

How We Got To the Brink of Financial Armageddon

Under the administration of George W. Bush, we have spent over $637 billion dollars on a 'war of choice' in Iraq, at a time when most of our available capital was dispersed in a massive tax cut. We were virtually driven to fight two wars - on a credit card, as the cost of the war in Iraq is still growing under the radar, and American military personnel in the theater are still dying.

Bush has been the only president to have ever awarded a massive tax cut in the middle of a war, while never vetoing a single special interest pork bill that passed through Congress on his watch.

In point of fact, corporate lobbyists appeared to have had free access to the Office of the President and that of the Vice President, Dick Cheney. And from that 'open access' to the seat of power grew arrogance on the part of these people and the powerful interests they represented that stated silently - anything goes - and so went the commencement of the financial rape of America.

That fostered 'big money' arrogance is why CEO's boldly came to begging meetings before Congress in corporate jets, and why financial instructions given bailout funds, casually used them to pay out billions in bonuses or purchase foreign banks. This is also why the Madoff's and the Standford's of Wall Street feel free to run massive Ponzi schemes - right under the very noses of the federal agencies created to prevent such crimes. And this is why an unheard of small peanut company, felt free to distribute what it 'knew was a contaminated food product' to all parts of America.

These individuals have lined their pockets and gorged themselves in a 'profit making feeding frenzy' at investor and taxpayer expense for almost eight years. And judging by their current behavior, they appear not ready to concede - the party's over.

All Roads Lead to......What?

Let us now say the unspeakable: We in America, and rest of the world are in a Depression! It is a Financial Meltdown that is advancing slower than that of 1929, only because we have in the 80 year interim since the last Depression, had the foresight to install some precautionary controls in place that weren't there the last time. But in spite of these tourniquets to moderate the bleeding, the financial bloodletting is, nevertheless, accelerating.

At this moment in time, no one knows where this global financial crisis is heading, how long it will persist or - how it will end! But we do know that should the world survive this mess, it will never be - Unbridaled Capitalism again as usual.

Your comments - The voices of our readers

I really think you have got the whole mess in a nutschell. I can't believe what is happening to all of my neighbors and possibly us. And these bastards are trying to blame it all on the homeowners. We went to th bank before we took out a mortgage we could afford, and thye told us we could get a better house and remortgage later on. We took their advice because thyey are the people who should know. Right? Well we are hanging on just barely. Keep up the good work Mr. Duffis. To bad you didn't run for president inmstead of this guy. B.Allen, Morristown, N.J .