THE BUZZARDS IN
THE HALLS OF JUSTICE
The government which was designed for the people, has got into the hands of their bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy.
– Woodrow Wilson
Sightings from The Catbird Seat
~ o ~
"There can be no equal justice where the kind of trial a man gets depends on the amount of money he has."
- U.S. Supreme Court Justice Hugo Black, Griffin v. Illinois, 373 U.S. 12,(1964),
~ ~ ~
"Reason and reflection require us to recognize that in our adversary system of criminal justice, any person haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial unless counsel is provided for him. This seems to us to be an obvious truth."
- U.S. Supreme Court Justice Hugo Black, Gideon v. Wainwright, 372 U.S. 335, 344 (1963),
~ ~ ~
"The Fourteenth Amendment, in declaring that no State 'shall deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws,' undoubtedly intended . . . that equal protection and security should be given to all [and] they should have like access to the courts of the country for the protection of their persons and property, the prevention and redress of wrongs, and the enforcement of contracts...."
- U.S. Supreme Court Justice Steven Field, Barbier v. Connolly, 113 U.S. 27, 35 (1885),
~ ~ ~
"If the motto ‘and justice for all’ becomes ‘and justice for those who can afford it’, we threaten the very underpinnings of our social contract."
- Chief Justice Ronald George California Supreme Court, Annual "State of Judiciary" Speech, 2001
~ ~ ~
"Imperfect as was the ancient common-law system, harsh as it was in many of its methods and measures, it would strike one with surprise to be credibly informed that the common-law courts...shut their doors upon...poor suitors...Even greater would be the reproach to the system of jurisprudence of the state of California if it could be truly declared that in this twentieth century...it had said the same thing."
- California Supreme Court Justice Frederick Henshaw, Martin v. Superior Court, 176 Cal.289, 294 (1917),
~ ~ ~
"In respect of civil rights, all citizens are equal before the law. The humblest is the peer of the most powerful."
- U. S Supreme Court Justice John Harlan, Plessey v Ferguson [dissent], 163 U.S. 537, 559-560 (1896),
California Association of Black Lawyers
Press Release
California Association of Black Lawyers Applauds the State Assembly’s Reprimand of Governor Schwarzenegger’s Judicial Appointments
- - - - -
The California Association of Black Lawyers applauds Speaker Fabian Nunez’s proposed budgetary limitation of new judgeships in response to Governor Arnold Schwarzenegger’s failure to make judicial appointments reflective of the diversity of California.
As local, state and national organizations continue to aggressively promote the necessity and indispensable role of diversity in the legal profession, the executive office of the State of California marches in the opposite direction, as exemplified by its deplorable record of appointing people of color to the judiciary....
Rather than select judges who would inspire the public’s confidence in the impartiality and fairness of the judicial system, Governor Schwarzenegger has appointed candidates to curry favor in the Republican Party as demonstrated by his recent appointments of former Republican Congressman James Rogan and Assistant United States Attorney Laura H. Parsky, daughter of President George W. Bush confidant Gerald Parsky, to judgeships in Orange and San Diego counties, respectively.
If these types of judicial appointments continue, without significant weight attached to diversity and the appreciation of varying backgrounds and experiences, the California judicial system’s fabric will continue to erode and its integrity will be challenged by those who are denied the equal right to participate in its composition....
http://www.calblacklawyers.org/press5.htm
For more, GO TO > > > Confessions of a Whistleblower; The Vultures That Ate HonFed; Vultures in The Meadows
July 28, 2008
DOJ: Former aide broke law
in hiring scandal
By LARA JAKES JORDAN, Associated Press Writer
Top aides to former Attorney General Alberto Gonzales broke the law by letting politics influence the hiring of career prosecutors and immigration judges at the Justice Department, says an internal report released Monday.
Gonzales was largely unaware of the hiring decisions by two of his most trusted aides, according to the report by Justice's Office of Inspector General and Office of Professional Responsibility.
But it singles out his former White House liaison, Monica Goodling, for violating federal law and Justice Department policy by discriminating against job applicants who weren't Republican or conservative loyalists.
"Goodling improperly subjected candidates for certain career positions to the same politically based evaluation she used on candidates for political positions," the report concluded.
In one instance, Justice investigators found, Goodling objected to hiring an assistant prosecutor in Washington because "judging from his resume, he appeared to be a liberal Democrat."
In another, she rejected an experienced terror prosecutor to work on counterterror issues at a Justice Department headquarters office "because of his wife's political affiliations," the report found. It also found she rejected at least one job applicant who was rumored to be a lesbian.
Goodling's attorney, John Dowd, declined comment Monday. Attempts to reach her were not immediately successful.
Additionally, a majority of immigration judge candidates considered by former Gonzales chief of staff Kyle Sampson were recommended by the White House's political affairs office — including one name forwarded by then-top adviser Karl Rove. Sampson told investigators that he did not consider those jobs to be protected from political considerations.
His lawyer, Brad Berenson, described those hiring decisions as an honest mistake and said that Sampson "immediately agreed with the recommendation to put a stop to this process" when he first learned he may have been wrong.
The federal government makes a distinction between so-called "career" appointees and "political" appointees, and the long-accepted custom has been that career workers are not hired on the basis of political affiliation or allegiance.
The 140-page report does not indicate whether Goodling or Sampson could face any charges. None of those involved in the discriminatory hiring still work at Justice, meaning they will avoid any departmental penalties.
However, Justice investigators said that bar associations that license lawyers have asked about the report's findings on Goodling — indicating she could be sanctioned there, potentially including losing her ability to practice law.
Congressional investigators said they also were considering asking the Justice Department to pursue perjury charges against Goodling, Sampson and possibly Gonzales as a result of their spoken or written congressional testimony during House and Senate investigations last year. Lying to Congress is a crime.
Democrats said the report affirms their charges of White House meddling in the hiring and firing of Justice Department employees.
"The cost to our nation of these apparent crimes was severe, as qualified individuals were rejected for key positions in the fight against terrorism and other critical department jobs for no reason other than political whim," said House Judiciary Committee Chairman John Conyers, D-Mich.
"The report also indicates that Monica Goodling, Kyle Sampson, and Alberto Gonzales may have lied to the Congress about these matters," Conyers added. "I have directed my staff to closely review this matter and to consider whether a criminal referral for perjury is needed."
Sen. Charles Schumer, D-N.Y., said "it is crystal clear that the law was broken" by the political hiring process.
"But since it is unlikely that Monica Goodling acted on her own," Schumer added, "the question is, how many others were involved."
In their report, Justice investigators sought to find whether Republican politics were driving hiring polices at the nation's premier law enforcement agency whose appointees are expected to be selected on a nonpartisan basis. The investigation is one of several that examine accusations that Bush administration politics drove prosecution, policy and employment decisions within the Justice Department.
Those accusations were initially spurred by the firings of nine U.S. attorneys in late 2006 and culminated with Gonzales' resignation under fire as attorney general last September.
Gonzales, who has kept a low profile since leaving the department said in a statement that "political considerations should play no part in the hiring of career officials at the Department of Justice. ...I agree with the report's recommendations." His attorney, George Terwilliger, defended Gonzales by saying "it's simply not possible for any Cabinet officer to be completely aware of and micromanage the activities of staffers, particularly where they don't inform him of what's going on."
The man who replaced Gonzales, Attorney General Michael Mukasey, said he is "of course disturbed" by the findings.
"I have said many times, both to members of the public and to department employees, it is neither permissible nor acceptable to consider political affiliations in the hiring of career department employees," Mukasey said in a statement shortly after the report was released Monday morning. "And I have acted, and will continue to act, to ensure that my words are translated into reality so that the conduct described in this report does not occur again at the department."
Senate Judiciary Committee Chairman Patrick Leahy said the report indicates that the effort to politicize federal law enforcement was not just the actions of a few "bad apples," but administration policy.
He called it "a clear indication of the untoward political influence of the Bush administration on traditionally nonpolitical appointments."
~ ~ ~
The DOJ report can be found at: http://www.usdoj.gov/oig/special/s0807/final.pdf
< < < FLASHBACK < < <
November 21, 2007
An Exercise in Political Epistemology:
Mukasey, Schumer, Chertoff, and AIPAC
By Travis Woodson
Epistemology – the critical study of what we know (or think we know) and how we know it – is a distinctive and admirable aspect of Western culture. From Socrates to the proponents of scientific method we learn the importance of caution in reaching conclusions. In Anglo-American law, with its rules of evidence (especially its rejection of hearsay) and presumption of innocence, we see a similar restraint. But caution in reaching conclusions is not always a virtue. In some contexts, it can be a fatal mistake.
I was thinking recently about what we know and don’t know while reading about the confirmation of Judge Michael Mukasey as Attorney General. Here are some things we know with reasonable certainty:
1. We know from Jewish sources that Mukasey is an Orthodox Jew and political conservative, whose Judaism is . . . deeply felt.” He is a lifelong congregant at Kehilath Jeshurun in New York City. He attended the Ramaz School, a Modern Orthodox Jewish prep school; his wife was headmistress there, and both his children attended the school. The Mission Statement for the Kehilath Jeshurun Congregation includes the following:
“[W]e are deeply committed to our religious traditions, to the study of the Torah, the observance of Shabbat and kashrut, the love of, and support for, our fellow Jews and an unbreakable bond with the State of Israel and its citizens.
“Our identification with the State of Israel and our fellow Jews extends well beyond the more conventional UJA/Federation, Israel Bonds and tree-planting campaigns . . . KJ participates in and sponsors political action groups around the world, and runs several well-attended missions each year to Israel for the primary purpose of demonstrating solidarity and support to our brethren, especially in these incredibly difficult times for the State and its citizens.
“KJ sponsors and supports an array of other programs . . . a partial list includes: ... The Israel Action Committee [which] is the vanguard of the growing grassroots movement among American Jewish communities to incubate local, regional and even national initiatives designed to support the beleaguered State of Israel.”
2. We know that Mukasey’s sponsor for the Attorney General Position was Senator Charles Schumer of New York. Schumer is Jewish, a supporter of the Iraq war resolution, a member of AIPAC, and a strident advocate for Israel. Schumer was one of two Democrats on the Senate Judiciary Committee – Senator Feinstein of California was the other – to cross party lines and vote for Mukasey’s confirmation as Attorney General, despite Mukasey’s political affiliation with Rudy Giuliani and his refusal to declare that waterboarding was illegal torture. Previously, Schumer had supported the neoconservative Republican John Bolton as U.S. Ambassador to the U.N. primarily because Bolton was aggressively pro-Israel.
3. We know that Michael Chertoff, the head of Homeland Security, is the son of a rabbi, that his mother was apparently an Israeli national, that his wife was co-chairwoman of the regional Anti-Defamation League’s civil rights committee in the mid 1990s, and that his children attended Jewish days schools. And we know that Senator Schumer was a leading advocate for Chertoff’s appointment.
http://www.wvwnews.net/story.php?id=2436
~ ~ ~
See also: www.kycbs.net/AIPAC.htm; www.kycbs.net/Google-AIPAC.htm
Final Decree entered
Date: Tuesday, June 24, 2008 8:17 PM
From: "Steven Guttman" <sguttman@kdubm.com>
To: "Bobby Harmon" <bobby_n_harmon@yahoo.com>, "David Farmer" <farmerd001@hawaii.rr.com>, "Michael Mukasey" <AskDOJ@usdoj.gov>, "Kevin Chang" <sa@hid.uscourts.gov>, "Robert Faris" <hib@hib.uscourts.gov>, "Barry M. Kurren" <richlyn_young@hid.uscourts.gov>, "Carol K. Muranaka" <ustp.region15@usdoj.gov>, "J P Schmidt" <insurance@dcca.hawaii.gov>, "Janet Kamerman" <HONOLULU@FBI.GOV>, "Mark Bennett" <hawaiiag@hawaii.gov>, "Hugh Jones" <hugh.r.jones@hawaii.gov>, "Linda Lingle" <governor.lingle@hawaii.gov>
Cc:
"Mediation Center of The Pacific" <mcp@mediatehawaii.org>, "Sheryl Nicholson" <office@acluhawaii.org>, "Robert Bruce Graham" <bgraham@awlaw.com>, "James Wriston" <jwriston@awlaw.com>, "Andrew Winer" <winer@pacificlaw.com>, "James Cribley" <jcribley@caselombardi.com>, "Lawrence Goya" <hawaiiag@hawaii.gov>, "Pension Benefit Guaranty Association" <participant.pro@pbgc.gov>, "James B Nicholson" <jamesbnicholson@aol.com>, "Executive Office for U.S. Trustees" <ustrustee.program@usdoj.gov>, "Office of Inspector General US Dept of Justice" <oig.hotline@usdoj.gov>, "George Will" <georgewill@washpost.com>, "Haunani Apoliona" <info@oha.org>, "Leroy Colombe" <lcolombe@ckdbw.com>, "Scott Helman" <shelman@globe.com>, "Bob Nichols" <bob.bobnichols@gmail.com>, "Laura Thielen" <dlnr@hawaii.gov>, "Barry Taniguchi" <communications@hcf-hawaii.org>, "Paul Achitoff" <honoluluoffice@earthjustice.org>, "Laurie Bennett" <info@muckety.com>, "Dave Shapiro" <volcanicash@gmail.com>, "Gail Kim-Moe" <Gkim.moe@gmail.com>, "Marshall Chriswell" <mc@whistleblowers.org>, "Greg Palast" <palast@gregpalast.com>, "Dee Jay Mailer" <ksinfo@ksbe.edu>, "Laser Haas" <laserhaas@msn.com>, "Michael Moore" <mike@michaelmoore.com>, "Texas Observer" <editors@texasobserver.org>, "Brian W. Bisignani" <bbisignani@postschell.com>, "Aon Insurance Managers" <mike_coulter@agl.aon.com>, "William Burgess" <hwburgess@hawaii.rr.com>, "Brian E. Schatz" <teamschatz@gmail.com>, "Patricia Case" <pattycase@aol.com>, "Cheryl Nakamura" <CNakamura@rmhawaii.com>, "Bill Yuen" <billyuen@cymlaw.com>, "Randall W. Wulff" <rwulff@wqsadr.com>, "Karen Spiller" <karen.spiller@baesystems.com>, "Andrew Killgore" <akillgore@wrmea.com>, "Patrick Leahy" <senator_leahy@leahy.senate.gov>, "Pamela A. McCullough" <HONOLULU@FBI.GOV>, "James Duke Aiona" <ltgov@hawaii.gov>, "Ken Conklin" <ken_conklin@yahoo.com>, "William H. Donaldson" <enforcement@sec.gov>, "Ian Lind" <diary@ilind.net>, "Jim Terrack" <tnthawaii@aol.com>, "Andrew Walden" <hfpeditor@email.com>, "All Senators" <sens@Capitol.hawaii.gov>, "All Representatives" <reps@Capitol.hawaii.gov>, "Thomas Fitton" <info@judicialwatch.org>, "Stew Webb" <stewwebb@stewwebb.com>, "Judson Witham" <jurisnot@yahoo.com>, "J C Shannon" <Hapa1234@aol.com>, "Jeff Biener" <jeffandmary@ozarkopathy.org>, "V K Durham" <vkdtdht@pionet.net>, "Richard Grove" <Richard@8thEstate.com>, "Bradley Tamm" <btamm@hawaii.rr.com>, "Susan Tius" <STius@rmhawaii.com>, "Paul Alston" <palston@ahfi.com>, "John Goemans" <wip@kamuela.com>, "William K Slate" <Websitemail@adr.org>, "Lissa Andrews" <landrews@rmhawaii.com>, "John D. Finnegan" <info@chubb.com>, "Terry Mullen" <tmullen@johnmullen.com>, "Margery Bronster" <info@bchlaw.net>, "Michael N. Tanoue" <mtanoue@paclawgroup.com>, "Neil Ambercrombie" <Neil.Abercrombie@mail.house.gov>, "Lyn Flanigan Anzai" <lflanigan@hsba.org>, "Lorraine Inouye" <seninouye@Capitol.hawaii.gov>, "Samuel P. King" <leslie_sai@hid.uscourts.gov>, "Arthur Rath" <imua@spamarrest.com>, "Randall Roth" <rroth@hawaii.edu>, "Rick Daysog" <rdaysog@honoluluadvertiser.com>, "Jim Dooley" <jdooley@honoluluadvertiser.com>, "Robin Campaniano" <aigh001@aighawaii.com>, "Blossom Tong" <blossom.d.tong@marsh.com>, "Sammye Richardson" <sammyerichardson@yahoo.com>, "Daniel Hopsicker" <madcownews@gmail.com>, "Richard L Righter" <righterwmx@aol.com>, "Dirk Kempthorne" <webteam@ios.doi.gov>, "Jeffrey Sia" <Jeff.Sia@excite.com>, "Jim Babka" <downsizer-dispatch@downsizedc.org>, "Truth" <truth@grandecom.net>, "J. C. Jones" <JCJJONES@aol.com>, "Dane Field" <danefl@gucl.com>, "Jeffrey Watanabe" <jwatanabe@wik.com>
Message contains attachments
LT var 6-24-08.pdf (112KB)
Please see attachment
Kessner Umebayashi Bain & Matsunaga
220 South King Street, Suite 1900
Honolulu, Hawaii 96813
Tel. 808.536-1900
< < < FLASHBACK < < <
April 21, 2004
Wulff Chosen to Head 9/11 Panel
on WTC Loss
Attorney was picked by judge in New York to help
on panel determining value of damages
By Josh Richman, STAFF WRITER, The Oakland Tribune
An East Bay attorney and mediator will play a pivotal role in determining the amount of loss resulting from the World Trade Center's destruction at the hands of terrorists Sept. 11, 2001.
Randall W. Wulff of Piedmont was selected Tuesday by U.S. District Chief Judge Michael B. Mukasey of New York to be chief umpire on a three-person appraisal panel that will address reconstruction costs as well as rental value and business interruption damages. Hearings are expected to begin later this year.
The battle over the monetary costs of the World Trade Center's destruction, and who will be paid how much for those costs, has become almost as twisted as the wreckage of the towers. And the battle has turned somewhat political, with New York officials touting the rebuilding of Ground Zero as crucial to the region's economic recovery.
World Trade Center leaseholder Larry Silverstein claims his insurers owe him almost twice their policy limits -- as much as $6.8 billion -- based on a switch in insurance forms that he believes recognizes the two impacts by two hijacked jet airliners as two separate losses. His claim went to a six-man, six-woman federal jury Monday after a 10-week trial.
After the jury -- and those in future proceedings involving other members of Silverstein's jury pool -- has determined the extent of the insurers' liability, it'll be up to Wolff's panel to determine what the actual losses are.
Wulff was with San Francisco's Farella, Braun and Martel from 1974 -- first as a trial lawyer, and from 1994 on as a "neutral" mediator -- until 2000, when he cofounded Oakland's Wulff Quinby Sochynsky, which exclusively provides mediation, arbitration and other alternative dispute resolution services.
He has helped settle almost 2,000 cases in the past 15 years, including the recent $1.1 billion settlement of the California class action against Microsoft. He also has helped resolve monetary disputes related to renovation of the Oakland Arena and construction of other high-profile projects from ballparks to Las Vegas casinos. And he has authored, edited or co-edited books on alternative dispute resolution.
His firm's Web site says his daily fee is $9,500 for cases in the Bay Area or Sacramento, $11,000 for cases elsewhere.
Wulff holds an undergraduate degree from the University of Oregon, attended the Netherlands Institute of International Business and holds a law degree from the University of California, Hastings College of the Law in San Francisco.
http://www.wqsadr.com/articles.html
REFERENCES
A sample of names follows here. A lengthier list of specific references from counsel and parties in cases where Mr. Wulff has acted as mediator is also available upon request....
Hawaii
Diane D. Hastert, Esq.
Damon Key Leong Kupchak Hastert
1600 Pauahi Tower, 1001 Bishop Street
Honolulu, HI 96813
Telephone: 808-531-8031
Bert T. Kobayashi, Esq.
Kobayashi, Sugita & Goda
First Hawaiian Center, Suite 2600
Honolulu, HI 96813
Telephone: 808-529-8700
Andrew Winer, Esq.
Winer Heheula & Devens
Pali Palms Plaza
970 North Kalaheo Ave, Suite A-300
Kailua, HI 96734
Telephone: 808-254-5855
David Schulmeister, Esq.
Cades Schutte Fleming & Wright
1000 Bishop Street, Suite 1000
Honolulu, HI 96813
Telephone: 808-521-9200
John T. Hoshibata, Esq.
Crabtree & Hoshibata
2300 Pauahi Tower
1001 Bishop Street
Honolulu, HI 96813
Telephone: 808-524-5644
Elton John Bain
Kessner Duca Umebayashi Bain & Matsunaga
19th Floor, Central Pacific Plaza
229 South King Street
Honolulu, HI 96813
Warren Price III, Esq.
Price Okamoto Himeno & Lum
Ocean View Center
707 Richards Street, Suite 728
Honolulu, HI 96813
Telephone: 808-538-1113
Roy F. Hughes
Hughes & Taosaka
900 Pauahi Tower
1001 Bishop Street
Honolulu, HI 96813
Telephone: 808-526-9744
Brad S. Petrus
Tom Teetrus & Miller
The Arcade Building
212 Merchant Street, Suite 200
Honolulu, HI 96813
Telephone: 808-522-0800
Milton M. Yasunaga
Cades Schutte Law Firm
1000 Bishop Street, Suite 1200
Honolulu, HI 96813
Telephone: 808-521-9200
John T. Komeiji
Watanabe Ing & Komeiji
999 Bishop Street, 23rd Floor
Honolulu, HI 96813
Telephone: 808-544-8300
Roger Moseley
Moseley Biehl Tsugawa Lau & Muzzi
1100 Alakea Street, 23rd Floor
Honolulu, HI 96813
Telephone: 808-531-0490
James T. Paul, Esq.
Paul Johnson Park & Niles
Pacific Tower, 1001 Bishop St., Suite 1300
P.O.Box 4438
Honolulu, HI 96812
Telephone: 808-524-1212
James Lawhn
Oliver, Lau, Lawhn, Ogawa & Nakamura
707 Richards Street, Suite 600
Honolulu, HI 96813
Telephone: 808-533-3999
http://www.wqsadr.com/randallwwulff.html
May 22, 2008
House subpoenas Karl Rove
By LARA JAKES JORDAN, Associated Press
WASHINGTON - The House Judiciary Committee on Thursday subpoenaed former White House top political adviser Karl Rove to testify about whether the White House improperly meddled with the Justice Department.
Accusations of politics influencing decisions at the department led to last year's resignation of former Attorney General Alberto Gonzales.
The subpoena issued Thursday orders Rove to testify before the House panel on July 10. He is expected to face questions about the White House's role in firing nine U.S. attorneys in 2006 and the prosecution of former Gov. Don Siegelman of Alabama, a Democrat.
House Judiciary Chairman John Conyers had negotiated with Rove's attorneys for more than a year over whether the former top aide to President Bush would testify voluntarily.
"It is unfortunate that Mr. Rove has failed to cooperate with our requests," Conyers, D-Mich., said in a statement. "Although he does not seem the least bit hesitant to discuss these very issues weekly on cable television and in the print news media, Mr. Rove and his attorney have apparently concluded that a public hearing room would not be appropriate."
"Unfortunately, I have no choice today but to compel his testimony on these very important matters," Conyers said.
Neither Rove nor his attorney, Robert Luskin, could be immediately reached for comment.
http://news.yahoo.com/s/ap/20080522/ap_on_go_co/rove_subpoena
Mar 14, 2008
"SPITZER WAS SILENCED."
THE $200 BILLION BAIL-OUT FOR PREDATOR BANKS
AND SPITZER CHARGES ARE INTIMATELY LINKED
By Greg Palast
Reporting for Air America Radio's Clout*
While New York Governor Eliot Spitzer was paying an 'escort' $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.
Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bush's man Bernanke was using ours.
This week, Bernanke's Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.
Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers' bordello: Eliot Spitzer.
Who are they kidding? Spitzer's lynching and the bankers' enriching are intimately tied.
HOW? FOLLOW THE MONEY.
The press has swallowed Wall Street's line that millions of US families are about to lose their homes because they bought homes they couldn't afford or took loans too big for their wallets. Ba-LON-ey. That's blaming the victim.
Here's what happened. Since the Bush regime came to power, a new species of loan became the norm, the 'sub-prime' mortgage and it's variants including loans with teeny 'introductory' interest rates. From out of nowhere, a company called 'Countrywide' became America's top mortgage lender, accounting for one in five home loans, a large chuck of these 'sub-prime's....
Here's how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain't worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the 'discount' they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. Grinnings move into their Toyota.
Now, what kind of American is 'sub-prime'. Guess. No peeking. Here's a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren't 'stupid', they had no choice. They were 'steered' as it's called in the mortgage sharking business.
"Steering," sub-prime loans with usurious kickers, fake inducements to over-borrow, called 'fraudulent conveyance' or 'predatory lending' under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.
But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy "it was OK now to steer'm, fake'm, charge'm and take'm."
BUT THERE WAS THIS ANNOYING PARTY-POOPER.
The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.
Instead of regulating the banks that had run amok, Bush's regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of 'federal pre-emption', Bush-bots ordered the states to NOT enforce their consumer protection laws.
Indeed, the feds actually filed a lawsuit to block Spitzer's investigation of ugly racial mortgage steering. Bush's banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.
Spitzer not only took on Countrywide, he took on their predatory enablers in theinvestment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup's Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called 'securitization.'
What that means is that they took a bunch of junk mortgages, like the Grinnings, loans about to go down the toilet and re-packaged them into 'tranches' of bonds which were stamped 'AAA' - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).
When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide's top man, Angelo Mozilo, will 'earn' a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars - he pulled in from 1998 through 2007.
BUT THERE WERE RUMBLINGS THAT THE PARTY WOULD SOON BE OVER.
Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide's stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.
Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That's Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.
The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the 'public treasure' and got to keep the Grinning's house. There was no 'quid' of a foreclosure moratorium for the 'pro quo'