THE RIGHT KEEPS GETTING MAD AT THE WRONG PEOPLE…. In the wake of fraud and abuse throughout the financial industry, which nearly destroyed the global economy, big banks were facing costly lawsuits from many state attorneys general.
As Pat Garofalo explained, those cases were cut short by a settlement agreement “that would involve the banks modifying about $20 billion in mortgages in order to avoid litigation over the ‘robo-signing’ scandal and other mortgage abuses.”
The problem, of course, is that Republicans and others on the far-right are outraged, not by the scandalous misconduct by the financial industry, but by the agreement that forces them to help homeowners. Sen. Richard Shelby (R-Ala.), for example, called the settlement a “shakedown,” while the Wall Street Journal editorial page equated the agreement with “extortion.”
In other words, conservatives aren’t mad at the banks; they’re mad at those trying to push the banks to do right by American consumers. Paul Krugman unpacks the story to explain the problem.
To get an idea of what we’re talking about here, look at the complaint filed by Nevada’s attorney general against Bank of America. The complaint charges the bank with luring families into its loan-modification program — supposedly to help them keep their homes — under false pretenses; with giving false information about the program’s requirements (for example, telling them that they had to default on their mortgages before receiving a modification); with stringing families along with promises of action, then “sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions”; and, in general, with exploiting the program to enrich itself at those families’ expense.
The end result, the complaint charges, was that “many Nevada consumers continued to make mortgage payments they could not afford, running through their savings, their retirement funds, or their children’s education funds. Additionally, due to Bank of America’s misleading assurances, consumers deferred short-sales and passed on other attempts to mitigate their losses. And they waited anxiously, month after month, calling Bank of America and submitting their paperwork again and again, not knowing whether or when they would lose their homes.” […]
[T]he proposed settlement only calls for loan modifications that would produce a greater “net present value” than foreclosure — that is, for offering deals that are in the interest of both homeowners and investors. The outrageous truth is that in many cases banks are blocking such mutually beneficial deals, so that they can continue to extract fees. How could ending this highway robbery be bad for the economy?
And yet, there was Virginia Attorney General Ken Cuccinelli (R) explaining his opposition to the agreement, characterizing mortgage modification as “welfare.”
It’s almost impressive how a major political party can consistently side against the public’s interests and not face any voter backlash whatsoever. When BP caused an oil-spill crisis in the Gulf of Mexico, Republicans sided with BP and called attempts to hold them accountable a “shakedown.” (There’s that word again.)
When health insurers gouged customers, the GOP sided with insurers. When polluters undermine clean air and water, the GOP sides with the polluters. When Wall Street nearly destroys the global financial system, the GOP sides with the financial industry.
The fact that Republicans win any elections at all is testament to their extraordinary ability to fool a lot of the people a lot of the time.