Small Crooks Go To Jail. Big Crooks Get A Fine.

That seems to be the message our government is sending. If you are going to be a crook, be a big time crook because they don’t go to jail. Four years after the biggest rip off in American history, the sub-prime mortgage debacle that sent America into the greatest recession since the Great Depression, Department of Justice has not put one crook behind bars. They had plenty of crooks to choose from, too. Although the mortgage lenders and the big banks didn’t create the housing bubble, our government did that, they did take advantage of it and their methods often went way beyond unethical. They were down right criminal. Oh some companies paid some fines in settling out of court civil charges brought by our Department of Injustice, no one is serving any time.

One of the people who, in my opinion, should be behind bars is Angelo Mozilo the then CEO of Countrywide Mortgage Investment. You can read about  part of the Countrywide’s crimes here.  When Countrywide was about to go bankrupt, Bank of America took them over and that champion of justice, Eric Holder, got them to agree to pay a 355 million dollar fine. CHUMP CHANGE!  But not to fear, because Bank of America continued many of Mozilo’s practices, Eric The Great went after BofA again.

Today Fox News has the story that the US is sueing Bank of America for a billion dollars.

In court documents filed by the U.S. Attorney for the Southern District of New York, the U.S. alleges that a loan origination program in BofA’s Countrywide Financial unit generated thousands of fraudulent and defective home loans that were sold to Freddie and Fannie. The loans later defaulted and caused massive losses and countless foreclosures.

CHUMP CHANGE!

Where in the hell are the criminal charges? So, the big boys will have their multi-million dollar bonuses cut in half. BOO-HOO! The message is clear. If you steal a hundred dollars and get caught, you go to jail. If you steal a hundred billion dollars and get caught, you get a slap on the wrist.

Angelo Mozilo and Countrywide and Bank of America were not the only crooks taking advantage of the housing bubble. Goldman Sachs and others got some wrist slapping too. But what about Fannie and Freddie? They were the first to create Mortgage Backed Securities (MBS) not Countrywide. Sub-prime mortgage lending was pushed on Fannie and Freddie by our own government when Bill Clinton decided all poor people had a right to own a home. But, why didn’t the Republicans under Bush stop this nonsense? Well, they tried but there was a lot of push back by the Democrats, especially Barney Frank. After all his boy friend was the head of Fannie. I snagged this picture from Matt Ross of the great Conservative Hideout 2.0. I think it explains a lot.

How many times have you heard President Obama during the campaigns and the debates say “We can’t go back to the policies that got us into this mess in the first place.”?  He is right, of course. Except the President wants people to think that it was the Bush policies that got us into this mess. Wrong, Mr. President. It was Democrat policies beginning with the Clinton administration that got us into this mess. And,   it was people like Barrney Frank and others that kept the pedal to the metal. No, we do not want to go back to the policies that got us into this mess. Thank you very much, Mr. President!

Well, now you know what I’m  thinking. What are your thoughts?

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24 thoughts on “Small Crooks Go To Jail. Big Crooks Get A Fine.

  1. I suppose I shouldn’t be surprised that the mainstream media continues to press the meme that the evil coldhearted Republicans caused the housing collapse when it was the policies of the socialist/democratic party that actually was the cause.

    Imagine that. The MSM not telling the truth.

    And yes, Bawney Fwank should be in jail. Hell, he’ll probably enjoy those prison showers.

  2. I go back to carter and his misadventure regarding redlining by banks. Banks were forced to loan to those in neighborhoods that were in very high risk.

  3. Our problem is that both parties are systemically corrupt. Once again, it isn’t the fault of Republicans or Democrats —it’s our fault. We elect thugs to office; worse, we reelect them. And our standard for who should represent us in Congress and the White House is very, very low. It really does explain why little crooks go to jail, and big crooks operate with impunity.

    1. In yesterday’s post I said one should never underestimate the stupidity of the eAmerican voter. here is a case in point. Jesse Jackson Jr., the Congressman frm South Chicago, has been AWOL for months, is under FBI investigation, has not campaigned once yet the latest poll predicts he will win reelection by more than a 30% margine. And people wonder why our country is so screwed up? Go figure!

  4. I couldn’t agree more, Jim. The Republicans are not perfect, by no stretch of the imagination, but they have borne most of the public blame for the housing crisis and the resulting financial troubles, but it is not deserved. The picture of Barney Frank explains all we need to know.

  5. Those mortgage backed securities were considered great investments to hold in a portfolio.

    They were considered AAA rated because of the implied Federal Government guarantee with GSE’s, Government Sponsored Entities. I had always wondered if the implied guarantee was real, and it turns out that it was. This was bad economic policy, and I don’t know who to blame except the US Congress. They seem to be the sourc of many of our problems, today.

    I agree that the financial bubble was caused by the government, and the vultures were just waiting for opportunities to game the system. It was like shooting ducks in a barrel for them. Why are we surprised when we have a Bernie Maddoff stealing over $50 Billion? He not arrested even when the SEC was informed about his shenanigans. The SEC ignored Maddoff for years after they were warned about him.

    From what I have read, hardly any of the abuses that went on were legal, anyway. Where was the Securities and Exchange Commission? They are the regulatory watchdog.

    It turns out that many of the SEC lawyers were sitting around looking at porn when they were supposed to be watching for bad players in the financial world. My suggestion is to let the SEC folks go home and look at their porn. We are all screwed,anyway, if they are not going to do their jobs.

    1. Powerful people have powerful friends in government. For all practical purposes, they are above the law. You are right that mortgage backed securities had AAA ratings. It turned out that Goldman Sachs and others pressured the rating agencies into giving the AAA ratings. These people belong in jail; but it will never happen.

  6. The amazing thing to me is the audacity of hypocrisy in this lawsuit. The Federal government (beginning with Carter and then Clinton, and then the rest mentioned above) forced the banks to make these high risk, low or no collateral, loans in the first place. Then, they allowed the resale of these loans back to Fannie and Freddie and the the subprime investors, telling the SEC to look the other way. THEN….they forced BOFA to go through with absorbing Countrywide, even though Ken Lewis wanted to back out of that deal when he saw it was a can of worms. NOW, to turn around and sue BOFA for doing what they forced BOFA to do is just beyond the pale and hardly justice in the slimmest margin. Did some people get rich and benefit from this scheme? Yes. But as you point out…it isn’t those who will bear the price. It will be the consumer and the bank employees who will suffer the brunt of this lawsuit.

    Yes, Bob….Congress, Frank, Dodd, the Finance Commttee, SEC overseers, and the presidents who masterminded this political fiasco should be the ones on trial. Instead we have yet another bunch of lawyers getting rich for a “politically correct” (let’s all hate the banks) lawsuit.

    Just another crummy day for justice in America.

  7. Of course, the biggest crooks of all retire on government pensions and build presidential libraries. The problem with most criminals is that they just don’t think big enough.

  8. Obama might talk a good game but in the end he is taking their money just like the rest of them. So he is indebted to them as much as those who came before him and nothing will be done to these people. Obama even has Clinton on the campaign trail talking about how Obama is like he was, wouldn’t you like to hear someone ask Clinton about his role in the housing collapse and then compare him to Obama?

  9. Amen, Jim. The really stupid thing about the B of A fines is that the government basically put a gun to their head and said “buy Countrywide” and now they are fining them for the malpractice at Countrywide. What? It’s the old, “Don’t worry, everything is fine, but we have to slap you around a little bit so that people think we give a shit. When push comes to shove, though, we’ve got your back.”

    And you absolutely nailed the extreme hair-pullingly frustrating Democrat lie that “the policies of the Bush Administration got us into this mess.” Good God! Talk about playing on the ignorance of the masses. They have to know it’s not true. And, they have to know that what’s really happening is that they are continuing the actual policies that “got us into this mess in the first place.” Like you said, the fourth estate is broken. Actually, I think the problem is that they are either morally corrupt, or too stupid for words.

  10. Yes, Democratic fingerprints are all over the crime scene … but the scene is dirtied with Republican prints too.

    The Bush admin may have pushed for legislation that would have forestalled the inevitable collapse, but these were typical Washington band-aids that completely ignored the root cause of the crisis. After all, it was Bush who reappointed Counterfeiter-In-Chief Greenspan before gifting our nation with the “services” of Helicopter Ben.

    Of course, he had to, because his massive expansion of the welfare state, construction of the police state, and adventures in foreign wars were driving deficits sky-high. The Fed’s counterfeiting machine was the only way he could finance it all. So, yes, Obama is a Keynesian. But so was Bush. And so is Romney. Rumor has it that Romney wants to appoint the world’s greatest Keynesian textbook salesman to the Fed when Bernanke’s term ends. Same as it ever was …

    Now I agree with you wholeheartedly that Democrats deserve a significant portion of the blame (and jail time too), but washing our hands of the other half of the problem in the name of ‘partisan loyalty’ only helps to perpetuate the problems, not fix them. I mean, if we’re willing to stick up for one band of crooks vs. the other … we have nothing to complain about when we get robbed.

    1. Heh! I’ll not be defending the Republicans or Bush. But the mess we are living in was designed an built by the Democrats, in my opinion. do I think Bush and the Republicans could have done more to stop them? Absolutely.

      ” Obama is a Keynesian.”

      I’d say he is a Marxist.

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