So Much for Schneiderman Being Tough on Wall Street

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As regular readers no doubt recall, Eric Schneiderman abandoned the dissident state attorney general effort to get a better mortgage settlement, assuring the Administration a win on this sellout to the banks. The bright shiny prize Schneiderman got in return for his betrayal was serving as one of five co-chairmen on a Federal mortgage task force, which appears to have gotten close to nada in resources beyond the staff in various Federal agencies who were already working on mortgage investigations. And given that were are now close to a full five years past the origination of toxic subprime deals, those existing investigations don’t exactly look to have been pursued with much in the way of vigor.

We’ve criticized the Schneiderman sell out, yet the PR push to position him as the True Hero of What Passes for the left continues apace, including some ham-handed efforts like the American Prospect’s “The Man the Banks Fear Most“.

Schneiderman today proved the skeptics to be correct (hat tip reader Peter). From a writeup in the New York Law Journal of a presentation Schneiderman made on white collar crime. It seems Schneiderman is in favor of it:

Noting his role as co-chair of President Barack Obama’s mortgage-fraud task force, he said that he was “very pro-Wall Street” and had represented some financial services firms in private practice.

He said that the majority of people working in the financial industry are honest, but added that the “ability to tell people that and not have people scoff has been damaged” by ongoing scandals.

This telling admission of the truth comes as polls in swing states show that ordinary citizens aren’t fooled about Obama’s sell out on the mortgage front and to big banks. From CFS:

….majorites of independent likely voters in three swing states (Nevada, Arizona, and North Carolina) and near-majorities in two others (Pennsylvania and Florida) say they disapproved of Barack Obama’s handling of the housing crisis, and majorities in each state say the Administration is not doing enough to police Wall Street banksi in the housing market.

Strong majorities of likely voters in each state polled – Nevada, Florida, Arizona, North Carolina, and Pennsylvania – also say the economic crisis was caused partly by criminal actions of Wall Street executives.

It is going to be instructive to see whether token gestures by the Administration on the financial front between now and the election will be enough to fool voters who have suffered serious economic setbacks.

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  1. Mogden

    Obama is such a joke on his supposed attempts to rein in Wall Street. The sad thing is due to tribalism, most people will fall for it.

  2. Mike

    Bill Black on the 3 D’s:

    “On how perverse incentives encourage fraud: Perverse incentives produce criminogenic environments that encourage fraud. When people are able to steal a lot of money, with no threat of imprisonment, nor having to live in disgrace, an environment conducive to fraud is established.

    Establishing such an environment in practice requires the 3 D’s:

    Deregultation, Desupervision, and de facto Decriminalization.

    Deregulation: you get rid of the rules.

    Desupervision: any rules that remain, you do not enforce.

    Decriminalisation: even if you sometimes sue the perpetrators and get a fine, you do not put them in prison.

    On the ideal perverse incentives for accounting fraud: Accounting fraud thrives most with really high pay based on short-term reported income with no way to claw it back -even when it proves to be a lie.

    Also helpful is for assets to not have a readily verifiable market-value; this makes it easy to inflate the asset prices and easy to hide real losses.

    For a true epidemic of fraud, it is also helpful to have easy entry into the industry.

    Bill Black’s Recipe for Bankers to become Billionaires: 1. Grow massively, 2. By making very poor quality loans at high rates of interest, 3. Use extreme leverage (high corporate debt), and 4. Set aside virtually no loss reserves for the massive losses that will be coming.

    If you do these four things, you are mathematically guaranteed to report record short-term income. Akerlof and Romer referred to it as a sure thing – it is guaranteed.

    What the Recipe for Fraud will Guarantee: 1. The bank will report record profits (fictional profits), 2. The CEO will promptly become wealthy, and 3. Down the road, the bank will suffer catastrophic losses. As a bonus, if many banks do this simultaneously, a bubble will be hyperinflated.”

    Mr. Schneiderman, Mr. Parsons is on line 1?

    and btw if Arizona is a swing state, then my name is mickey mouse.

  3. TK421

    Hey, did you hear that president Obama has signed an order letting the Dept. of Treasury freeze the assets of anyone who criticizes the new government of Yemen?

    1. Doug Terpstra

      Yikes, the prosecution of thought-crime. Who’d a thunk, the first black president would become da man, Big Brother hisself? Stranger than fiction.

      Perhaps people who criticize Wall Street, or worse “scoff” at it, may be next. It is so un-American, tantamount to terrorism.

      1. jawbone

        While at Glenn’s place, check out his post on the State Department now changing its classification of the (suddenly a formerly) terrorist group MEK.

        When is a terrorist group not a terrorist group? When we want to use that group to continue its terrorist attacks against a nation we want to destabilize, make “regime change,” aka war, against it. In this case, Iran. But it works for whichever group and country the government wants to use it for.

        And, of course, since high level pols have been persuaded to sing the praises of the MEK, lobby for its getting into the good graces of the US — and these pols could be charged with advocating and offering material support to this terrorist group– then, given its usefulness in attacking Iran, the MEK is now an upstanding terrorist group. Our terrorist group.

        Ain’t hypocrisy grand?

  4. cv

    My question of a week or so ago, wondering whether Schneiderman had any has been answered: He has none and probably never did.

    I would call him a girly man, but that would be insulting to women.

  5. Binky Bear

    Mike citing Bill Black is correct I think. The GOP has had my entire life on this planet to take over the government and the public mindscape and bend it to the will of their corporate masters through propaganda, election fraud, black ops and skullduggery. Two Kennedys, MLK, Malcolm X, dead-Reagan, wounded (Bill Hicks and All backed by the same people who made the Third Reich possible-IBM, Standard/Ethyl, Brown Brothers Harriman, Theissen-Krupp, Ford, GM-Opel, etc.
    It is not an accident nor is it conspiracy theory when it is expressed as policy.

    1. Mike

      interesting you brought up GOP Nazi connection.

      After the war apparently, some of the Nazis found themselves in the GOP’s “Ethnic outreach committees” across the US.

      “Two months before the November 1988 presidential election, a small newspaper, Washington Jewish Week,
      disclosed that a coalition for the Bush campaign included a number of outspoken Nazis and anti-Semites. The
      article prompted six leaders of Bush’s coalition to resign.”

      “The Philadelphia Inquirer ran an article on the Bush team’s inclusion of Nazis (David Lee Preston, “Fired Bush
      backer one of several with possible Nazi links,” September 10, 1988.)

      The newspaper also ran an investigative
      series on Nazi members of the Bush coalition. The article confirmed that the Bush team included [Nazis and/or collaborators]”

      “Journalist Martin A. Lee, has written for The Nation, Rolling Stone, The San Francisco Chronicle, and other
      publications. In THE BEAST REAWAKENS, Lee confirms that during both the Reagan and Bush years, the
      Republican Party’s ethnic outreach arm recruited members from the Nazi émigré network.”

      it’s not conspiracy “theory”…

  6. Guy Fawkes

    I just got back my FOIA request regarding this Mortgage Task Force…..what a joke. They did not provide me with an address where the task force was working, no phone number, and the only thing that was provided were four pages from

    So, there is no fucking Mortgage Task Force. But, y’all vote Democratic because at least they will lie and tell you they care about you losing your home!

  7. Abelenkpe

    Of course his task force isn’t being funded. Are you completely unaware of how DC works? You want the task force funded? Maybe enough so that it can function? You’re not going to get that by bashing Schneiderman or the administration.

    1. Hugh

      Actually we are quite aware of how DC doesn’t work. We have also seen the commission dodge done a dozen different ways. But basically it comes down to this: Commissions are what you do when you don’t mean to do anything. I have to admit though this commission is about the flimsiest flim-flam I have come across.

  8. Conscience of a Conservative

    It damages Schneiderman’s credibility when he makes statements that he is “pro wall-street”. A proscutor should be feared. It’s fine to say he’s fair, but to say “pro wall-street” screams CAPTURED!.

    I don’t know what to say here, I want Dinallo back.

    1. James Cole

      Dinallo was a tool of big insurance, including the monolines, which themselves were the vectors by which credit contagion impacted municipal debt, and he passed up the opportunity to regulate CDS as insurance. Also he was never actually the AG, he was superindendent of insurance.

    2. KYrocky

      Schneiderman’s credibility? Is that a joke?

      He knows he sold out, and by openly saying he is “pro Wall Street” he is only looking to drive up the cost of his services as soon as bolts after November.

  9. indio007

    OH NOES! Not those naughty scandals!
    How bout having people scoff at Wall St. because of some criminal convictions instead of “scandals” Schneiderman….

  10. Next, watersports!

    Wow. I am very pro Wall Street, Slurp, hum. Instead of getting ruined by a bignosed Jersey whore, like his predecessor, he has to be the bignosed Jersey whore. This is what Schnauzerman got for shitcanning his reputation? I can get more outa my nose.

    You gotta hand it to this administration. They are preee-eminent at humiliating ambitious phonies.

    1. jawbone

      This ostensible Democratic administration sure knows how to hobble and take down any Dems daring to even think about representing the people, the metaphoric 99 Percent.

      Looking at how the Edwards’ trial is being run, more like trying him for adultery and being a real bastard toward his dying wife than for election fraud, it almost looks like just another attempt to compeltely crush someone who dared to run on a populist platform.

      I’m not defending Edwards — just noting how it’s of a piece with either crushing or enveloping and neutering Dems who think the party stands for protecting those with less power than the One Percerters.

      Now, Schneiderman’s reputation is craptastic with the actual left and he’s now neutered. I guess he wanted to continue to please the party bosses, aka the Powers That Be. But he won’t get much grassroots support. Gah.

    2. Lambert Strether

      Please, put Dania Londono Suarez in charge of the task force; she’s got oodles more integrity than Schneiderman. Your comparison is insulting to whores, so no more of that, please.

  11. kate

    Has anyone read the new “exit tax” law that is scheduled to go into effect next year? The only countries that applied a similar tax was Nazi Germany, Russia and South Africa. They are going to make it impossible for Americans wanting to leave the country to leave without giving up most of their assets first. Check it out; this is some really scary stuff.

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