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Rep. Walsh’s Rant Pathetic, and Also Indicative of Washington’s No-Accountability Policy

Either Rep. Joe Walsh or someone associated with posting the video of his meltdown at a meeting with constituents has now made the clip private, which is kind of hysterical in and of itself (UPDATE: there’s another version of the exchange here). But Think Progress provided a transcript so you can get the gist of it:

WALSH: That’s not the problem! The problem is you’ve got to be consistent. And I dont want government meddling in the marketplace. Yeah, they move from Goldman Sachs to the White House, I understand all of that. But you gotta’ be consistent. And it’s not the private marketplace that created this mess. What created mess was your government, which has demanded for years that everybody be in a home. And we’ve made it easy as possible for people to be in homes. […] Don’t blame banks, and don’t blame the marketplace for the mess we’re in right now! I am tired of hearing that crap! This pisses me off! Too many people don’t listen. […]

WALSH: Quiet for a minute! Quiet for a minute!

CONSTITUENT: Joe, what did I say–

WALSH: Quiet for a minute or I’m going to ask you to leave. You need to listen, or I’m going to ask you to leave.

The real issue, you see, is that people are blaming the banks for ripping off borrowers and investors and stealing homes. The government should clearly be responsible for that.

First of all, he’s ranting in the context of bankers moving seamlessly in and out of government, which messes up his whole narrative. So does the spectacle of a conference call put on by the Office of the Comptroller of the Currency about these heralded “foreclosure reviews,” the latest effort to hold mortgage servicers accountable, where a Financial Services Roundtable lobbyist served as a spokesman for the servicers. Where government ends and lobbyists and corporate lackies begin is hard to decipher in this environment.

It’s almost not even worth getting to Walsh’s core charge, that the government forced banks to lend to people who couldn’t pay them back. I suppose the government forced banks to slice up those loans into securities and then either lose the paperwork or fail to honor the procedures demanded by the pooling and servicing agreements. Or the government forced banks to sell the securities to investors without telling them they were taking the other side of the bet against the securities. Or that they knew about the irregularities with the loans, and received them at a discount from the originators, without passing on the information to investors who thought the loans were highly rated and perfectly legitimate. And on and on.

Walsh has now released a statement that he had a “quicker fuse” than normal, and that while if banks “abused their charters they need to be prosecuted fully,” the problem is that “further government meddling will only exasperate the problem.” I didn’t change a word.

The larger story here, alluded to by Walsh, is that the flip side of blaming the government is, I guess, not blaming the banks. Or at least not holding them accountable. Yet that’s the default setting of most of official Washington. This exchange between Sen. Richard Blumenthal (D-CT) and Attorney General Eric Holder at a hearing yesterday should be at least as viral as idiot tea partier Joe Walsh ranting away:

Blumenthal generously suggested that, “I know the foreclosure crisis is on your agenda,” and then asked if we’ll ever see a prosecution on robosigning and other fraud.

Holder responded, at first, by pointing to states Attorney Generals, claiming they are conducting investigations. I do hope he’s thinking of Eric Schneiderman, Beau Biden, and Catherine Cortez Masto, because the ones working on the settlement are pointedly avoiding any real investigation. Holder then further dodged, suggesting DOJ might find other ways–like civil suits–to hold these banks accountable.

Finally, and perhaps most interesting, Bluementhal asked why DOJ had not intervened in the Bibby, Donnelly v. Wells Fargo suit, a whistleblower suit against Wells Fargo, BoA, Chase, Ally, and others for the illegal legal fees the banks charged homeowners, including veterans.

Holder hedged in response to that question, promising he’d find out who had made the decision not to intervene and the basis for the decision.

Right, the Administration is as desirous of sweeping this under the rug as a maniac like Joe Walsh, no? They want to extract a minor sum of a settlement and send the banks on their way, the same people who generated the crisis, to do their worst. Even though the banks have proven through the Countrywide settlement that they just won’t abide by the terms.

I’m coming around to the belief that Walsh is right, though not for any of the reasons he gives…

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David Dayen

David Dayen