Friday Morning Bandinage

I feel like such a fool. Do not mistake that statement as a solicitation for agreement; that mail box is already full.

Among the untold thousands and thousands of warnings issued in and out of government, the one I chide myself for silently ignoring is the one about the repeal of the Glass Steagal Act. Folks in the Clinton administration supported and encouraged this Republican named bill supported by almost all Democrats. A bill everyone seemed to love.

Many members of the current Obama administration which like Michael Moore, claims to be all about the little guy, are some of them according to Rachel on MSNBC.

Banks had been advocating for eliminating Glass Steagall which prohibited the combination of investment bankers and insurance companies with consumer and commercial banking historical businesses. I see that as a logical thing for banks to push for after the US government knocked them out of the mortgage market.

The government, professing to want to “support” the mortgage market, created the Democratic darlings called Fannie Mae and Freddie Did as quasi governmental organizations, regulated essentially by Congress.

Fairly quickly they took over the most profitable slice of the mortgage market, repackaging and selling pools of mortgage, initially benefiting the consumer with lower rates indeed, but which turned banks into brokers who had to price and sell these GSEs all of their 30 year fixed rate mortgages in order to be competitive in consumer pricing.

Sort of a “public option” gone awry, to be imitated in similar fashion by the unexpected results of a public option in health care. Rachel, where are you?

My forecast of a public option disaster after proven correct will not feel any better than the effect of the repeal of the Glass Steagall Act. Unless I get unlucky, I will be alive to experience that disaster unlike Glass and Steagall and so will Rachel, but doubt she will ever interview me.

Of the many elements to this now perfected financial storm, the one most visible and surely single most visible responsible element, the banking sector does stand out; but only if you choose not to look at the real root cause, the 535 members of the legislature who work hard at confusing the issues so you do not, as they  prefer, look at them. Looking at them one at a time at the voting box has by now been gamed so badly, so profusely and so consistently that it does not fulfill it’s expectations. Please, console me, will anything short of revolution or the change of heart of those we elect return  a balance we all deserve but are deprived of by the now biggest industry in our country, politics.

The political catastrophe being played out in the guise of correcting the other guys greed is enough to make one believe in the healing power of the old soap opera shows, recycled as quasi reality shows. There are so many “shows” to watch with non existent judges that the hoi paloi I am a part of, are at the mercy of pure luck no matter what we co.

In the time frame of the mortgage mess, I mark as starting in the early 1990s, with incremental innovative steps taken by Wall Street and Bankers as business is supposed to do, gathering political steam, guidance and political mandates all the way. With Republicans joining forces behind the scenes with silent and still unaccountable opportunist Democrats trying help the poor for votes by getting them a loan, the die was cast by the very.

Democrats who are, were and still are as conflicted and complicit as any of the participating Republicans; the Republicans are noteworthy for their public relations ineptness for having garnered the vast majority of the blame while being, as a group, more like followers to the trough, seeing the opportunity to sup on the teat of big, special interest groups (SIGs), so organized that the great organizer of our time, Barack Obama would be proud.

Bush administration officials who advocated for increased regulations of Fannie Mae and Freddie Mac were defeated by the very teflon Democrats, Barny Frank, Chris Dodd, and the New York poster boy for hair transplant. You know who he is; who said television coverage of political hearings has not affected politics. Funny how Rachel has never done a show on that.

Similar story for HUD regulations proposed by Republican Mel Martinez who while at the helm of HUD which would have given significant power to shops rates and terms to the consumer over anyone, banker or broker. Democrats lead the kill charge and it was not hard to get Republican support.

Mind you, this was to kill a piece of regulation that would have tipped the scale toward mortgage borrowers, making it simple for the average American, including those who do not read well, to compare pricing; literally easier than comparison shopping at Wal-mart. Much easier.

When I read the proposals, I knew, like the great Byron Dorgon did, what it meant. In that case it meant it was so good for the consumer while actually reducing paperwork and other ineffective costly regulations, that it had no proverbial chance of getting approved. Funny how Rachel has never done a show on that.

Funny too, is that, after giving Byron Dorgon (D) much deserved credit for his 10 year warning Rachel did not ask Byron “What then did you do with this great knowledge? Did you then followup and apply knowledge for the benefit of our economy to the many non yet extant elements necessary to fulfill your profesy, such as legislation preventing any regulation of credit default swaps, regulations forcing banks to make loans to unqualified borrowers and not the last, doing the same to Fannie Mae and Freddie Did You.

Mr Glass and Mr Steagall probably do not relish this end. Not funny Rachel. Get your head out of your proverbial politics.