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There are people out there who are asking themselves "how did we get into this mess?" And there are people out there, like Greg Palast, who have been pointing the finger at the Elliot Spitzer ‘take down’ and saying, "Here’s the guy who was looking into it…and who at just the moment when he was shining the most light, got picked up on a banking/prostitution charge. Isn’t THAT interesting?" So, let’s look at this:

On February 14, the Washington Post published an editorial by Spitzer titled, “Predatory Lenders’ Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers,” which charged, “Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

In this editorial, Spitzer explained:

The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

The editorial appeared the day after Spitzer’s ill-fated rendezvous with the prostitute at the Mayflower Hotel. With that article, some Washington insiders believe, Spitzer signed his own political death warrant

Given what AIG did after they got their bailout in terms of throwing themselves a big part and securing senior management’s bonuses, Elliot Spitzer starts to look like a visionary…a nasty, SOB visionary…but a visionary, nonetheless:

New York Attorney General Eliot Spitzer sued American International Group Thursday, alleging the firm manipulated its books to deceive regulators and the investing public.

The civil lawsuit, announced in conjunction with the State Insurance Superintendent, comes just days ahead of the embattled insurer’s long-awaited annual financial report, which is due to be filed with the Securities and Exchange Commission Tuesday.

The suit charges that the nation’s biggest business insurer, ex-CEO Maurice “Hank” Greenberg and former CFO Howard Smith engaged in fraud to falsely exaggerate the strength of the company’s business and prop up its stock price. …The suit cites e-mails and other evidence intended to show that Greenberg was personally involved in negotiating some of the fraudulent transactions, and that he directed other AIG staffers to create other misleading transactions, the statement said.

There are people out there who are asking themselves "how did we get into this mess?" And there are people out there, like Greg Palast, who have been pointing the finger at the Elliot Spitzer ‘take down’ and saying, "Here’s the guy who was looking into it…and who at just the moment when he was shining the most light, got picked up on a banking/prostitution charge. Isn’t THAT interesting?" So, let’s look at this:

On February 14, the Washington Post published an editorial by Spitzer titled, “Predatory Lenders’ Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers,” which charged, “Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

In this editorial, Spitzer explained:

(more…)

Oxdown Diaries

Oxdown Diaries