By reader Jackrabbit, hoisted from comments on “Tim Geithner’s Magical Mystery Tour Of TARP Propaganda Has Little Use For Truth“:
1. If you don’t say “no” it isn’t rape
TARP was presented as the ONLY way to avert a melt down. The rapist used a gun. A more thoughtful approach would have at least extracted some concessions from the banks and ensured some measure of accountability in exchange for the bailout.
2. You brought it upon yourself (you flirted, didn’t cover up, didn’t take precautions, etc.)
The fact is wages have been stagnant for two decades. People turned to credit for relief and responded to what seemed like a good deal (the opportunity for homeownership).
3. If alcohol or other drugs were consumed, you have no case
Financial Services Industry shrills tell us over and over that Americans were credit junkies and the industry was just servicing their clients. This is poppycock. The financial industry pushed credit relentlessly and the regulators let them do it without regard to the consequences (because they were captured). The FBI warned of fraud in the subprime market years before TARP but nothing was done about it.
4. Your past indiscretions will be used against you
Americans have been complacent and politically apathetic. They have allowed politics to be overtaken by moneyed interests. Some say, “you get the government you deserve.” That doesn’t excuse the fact that public trust was violated.
5. What’s done is done, its best to just forget it and move on
Accepting the unacceptable (we were ALL responsible for the financial crisis – TARP was a success that cost little and thereby reflects well on our governments stewardship of the economy) is personally destructive and emboldens the perpetrators.
41 comments
Comments are closed.
“The FBI warned of fraud in the subprime market years before TARP but nothing was done about it.”
Quid? Come again?
A lot was done to make sure that nothing could be done about it!
Remember OCC v Spitzer and other State AGs?
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
One of the moneyquotes from that article:
And this during a period of decades of stagnant wages, when financial services were taking up something like 40% of GDP.
Not a fan at all of the analogy. Seems a cheap trivialization of two difficult and serious subjects.
traderjoe, you forgot the other great bromide of radical leadership analysis by failing to say that as you look around blog you fail to see any people of color and what does this say about us in our little uptight world of white privilege? How can we begin to speak for the powerless and dispossessed if we do not count them right here and right now among our ranks. I denounce this meeting as counter revolutionary political theater by it’s trivialization of the unspeakable. Or something like that joe, you do know how to expose the craven don’t you joe, just put your lips together and blow.
I have no idea if you are talking AT me (with your fancy words and wordplay), or WITH me, but I suspect the former. You seem to have implied or assumed much of my politics or beliefs. Have a good day…
The analogy doesn’t stand by itself. It is a rebuke to Geithner’s “5 Myths About TARP”. TARP was necessitated by failures of public and private governance. The Banks are still on life support and no one has been held accountable. To describe how TARP is a success without acknowledging these facts is dishonest but when it comes from a public official in high office it is also offensive.
I get the analogy – though it might have been better served to say that it was a ‘rape of the american public’ and perhaps make the connection more specific. I agree with most everything you said in the body of the article, but I would highlight the moral hazard issue of the bailouts as having the most serious long-term impact (it was arguably the moment when the concept of capitalism died of its final labored breath, and we most definitively moved into one of the other -ism’s). And IMHO all of the other quiet aspects of the financial rescue were even more beneficial to the banks – FDIC debt guarantees, P-PIP, etc. Of course, that would be beyond the purview of your concept.
My point was using sensitive subjects with a sense of parody/humor is difficult. It’s a tricky thing. While I appreciate the contribution to the site, I’m not sure the attempt at humor fits in with the meme of the site. IMHO, it’s just a bit off, but the criticism is meant to be more constructive and not personal…
Thanks traderjoe.
You should realize that this was not a guest post. As Yves noted (above), it was “hoisted from the comments” to another post. As such it wasn’t as well thought out as a post would’ve been.
Oh, I missed that part, and it is critical in understanding the time/effort put into the construction of the article. I actually was writing a longer response to one of your final comments, but now find it to be moot. As you reference, comments and posts should be held to different standards. Thanks for bringing that clarification to my attention.
P.S. I think the thing we all need to be on the watch for is TARP 2.0. RMBS, CMBS, and put-backs raise this as a distinct possibility. The blogosphere needs to be ready to mount a much more ‘successful’ opposition.
Cheers…
I’d qualify this by saying that TARP, at a mere $700 billion or so, is, by the side of the trillions looted without statutory authority, a diversion and a triviality, but otherwise, yes yes yes yes yes!
Also, if the jackrabbit nym is a reference to Woman on the Edge of Time, that would be excellent.
Careless wording from me. I mean that the bailouts begun under Bush, and normalized under The Big O, didn’t need any new legislation passed, unlike TARP. IANAL, so I don’t know whether those trillions were technically legal.
Looks like the odds are that the banks will be forced to buy back lots of crap loans.
The enormous mortgage-bond scandal: http://blogs.reuters.com/felix-salmon/2010/10/13/the-enormous-mortgage-bond-scandal/
Because the notes for the securitized loans were never properly transferred to the trust, the buyers of these AAA rated crap is suing the seller banks to get their money back:
Federal Home Loan Bank of Chicago sues B of A, others: http://www.chicagobusiness.com/article/20101015/NEWS01/101019921
Chris Whelan was saying just recently that the TBTF banks were going to need another bailout in the spring because of declining revenues, and if that’s true, then mortgage bond buybacks are going to spike them.
Bailing them out last time was a mistake. How about an FDIC restructure, audits, investigate, prosecute and jail em this time?
Glen,
Glen,
Thanks, both great articles. Not sure about the legal remedy for banks and originators, who are sometimes the same party, will they have to repurchase these loans and pay losses of the defrauded party?
Regarding the FHLB’s suit against banks for selling them bad mortgages who are also substantial owner’s of the FHLB’s equity, something tells me the contract wasn’t the result of an arms length transaction and as such, do you know what the FHLB’s can recover? Can they reverse these transactions?
I hope the public goes buck wild if the treasury attempts to bail out TBTF again. Don’t think they can sell it this time, god I hope not.
Stan,
Fed is there with much more than TARP (acronyms, printing and MBS). So who wants TARP. The idea is not how you get it but you should get it. and Banks will. Trust Bernanke!
TARP isn’t the real swindle, the P-PIP (Public-Private Investment Program)provision in TARP is. In March of ’09 Timmy G. and company slipped this through and billed it is a way to move “toxic assets” off the bank books by subsidizing and facilitating the sale and purchase of these MBS’s. This of course, was complete bullsh*t.
P-PIP had 9 capital fund PE companies (AllianceBernstein, LP and its sub-advisors Greenfield Partners, LLC and Rialto Capital Management, LLC; Angelo, Gordon & Co., L.P. and GE Capital Real Estate ;BlackRock, Inc.; Invesco Ltd.; Marathon Asset Management, L.P.; Oaktree Capital Management, L.P.; RLJ Western Asset Management, LP.; The TCW Group, Inc. and Wellington Management Company, LLP) written in to the provision directly, with minimum capital requirements of 10 billions dollars to be in the club. Why 10 billion? Well to price out any body other than the same alumni that started this disaster (It is interesting to note that Wellington was hurting financially to the point they laid off over 10% of their employees 3 months earlier).
The deal was that these capital funds would purchase the MBS’s with a 6 to 1 debt to equity ratio subsidy from the treasury, and the remaining amount was split with a 50% kickback from the FDIC. So 6 cents on the dollar. Sounds bad? It gets even better.
Two of the very few purchases were made by 1) none other than Lew Raneri himself, 2) Penny Mac (All ex-countrywide executives) who was partnering with Blackstone.
Stanford L. Kurland (of Countrywide of course) was the CEO at Penny Mac. Why is this relevant? Because the same people who made a killing of the MBS’s and subsequent windfall from the CDS’s were now going to purchase the same securities they originated (and made a killing on) for literally pennies on the dollar, WITH TAXPAYER MONEY. They intentionally funneled government money into their own pockets under the guise of “cleaning the banks books”. They were literally planning on laundering these MBS’s through TARP with the governments (ie Timmy G. et al)assistance.
The plan at that point was to bust up the bond, take the parts and build yet another MBS, and make an even bigger killing than they did the first time around.
I believe that either a)this was an attempt to launder the dirty MBS’s they knew were f**ked or b)they realized these bonds were f**cked around this time (explains why the purchases abruptly ceased) or most likely, a combination of both.
Remember that the original plan was a government super toxic asset buyback fund? Why wasn’t that plan moved forward? Because this sham was coordinated and designed specifically to further enrich the same people who are responsible for this economic disaster.
This isn’t speculation or conjecture, this is fact. Well researched fact to be honest with you. So now my next question is: are we really to believe this wasn’t coordinated by the Treasury?
I’m starting to think that Obama knew none of this until a few weeks ago, perhaps even more recently. We gave Timmy G. a blank check, and he cashed it. So…who knew what when?
I believe all roads lead to Mozilo. And the real reason he got off with a slap on the wrist is because of the incredible amount of damaging testimony he could have given implicating the highest levels of government. He has the administration by the short hairs, as they say.
To be even more candid, I’m starting to have concerns as to if its really wise for me to post this kind of stuff. Especially considering chatter I’m hearing regarding security hacks and what have you being reported by some of us who appear to be digging to deep and hitting to close to home.
Oh, I almost forgot:
http://bailoutsleuth.com/news/2010/10/sigtarp-reports-on-ppip-managers/
and check out the date on this:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1343625##
Point 5:
I kill Geithner .. Job well done. Let us forget it and Move on!
If this Ok, then I am fine.
This comment is inappropriate, even if it was (somehow?) made in jest.
This does not add to the discussion in any meaningful or worthwhile way. We may disagree with policymakers and wish to for greater accountability but threatening bodily harm is wrongheaded and way over the line for civil discourse.
Oh my goodness, TARP is like rape? Has Ms. Smith started to indulge in self-parody all because a few of us find the borrower as victim theme unpersuasive?
The argument about the unwise accumulation of debt is a legitimate one. Remember, the banks that used debt to live beyond their means too. Credit counseling services have been around for a very long time. Are we pretending that credit junkies are some urban legend? The unwillingness of the borrower apologists to acknowlege and accept that the accumuluation of household debt was part of the problem leaves me as angry as the bankers who claim they are doing gods work.
It is truly sad what has happened to America. The banksters, the mortgage fraud rings, and the overextended “deadbeat” borrowers are symptoms of a sickness in this society. If we can’t bring ourselves to recognize that fact, then perhaps we haven’t hit bottom just yet. The credit junkie analogy is far more persuasive than the rape analogy and far less perverse.
Gee, you certainly have a selective memory. Public opposition to the TARP was exceptionally vocal and clearly grass roots. Congressional staffers were seeing opposition at close to 99 to 1. The number shifted to more like 80/20 against after the banking industry started orchestrating a calling/e-mail campaign.
Public trust was violated. The need for TARP was the most clear expression of that.
People should be careful about how they spend their money. But part of what we expect from our government is to protect us from being misled on such a large scale that it results in a systemic crisis. (Imagine life without traffic laws!)
Banks are licensed and highly regulated for a reason. Until 2008 most people had a fair amount of trust in the banks. Not any more.
Who was best situated to identify and take measures to rectify the credit bubble? Banks and regulators that have dozens of highly paid professionals analyzing gobs of data everyday or homebuyers/consumers of credit?
Lastly, the public, individually and collectively (including those laid off from the financial services industry), have more than paid for their credit transgressions. Whereas many of those who could’ve acted responsibly to avert a crisis have not suffered nearly as much.
I didn’t care for TARP either. Maybe it was a necessary evil or maybe it was a huge mistake. In hindsight, there were lots of mistakes made.
Good one — the old reliable “mistakes were made” (by all) excuse; now is not the time for finger-pointing, as I myself poke my finger in the eye of “deadbeats”; it’s time move on, look forward not backward. Good stuff; it always works until it doesn’t.
Yep.
Like Hannah Arendt observed, if we’re all guilty, then no one is guilty.
Pint number 5 is interesting since it is one of the main points hammered home by the media: the crisis was not the fault of the banking system, it was the fault of the waiter taking out a half a million mortgage. The corollary which is taking hold is that since we are guilty and they are guilty, let’s not point fingers.
This mindset is rampant in France where moral and financial corruption are treated with a Gallic shrug. “Oui, he takes bribes and cheats on his wife, but so do I. And if we punish him, we might punish me!”
After WWII we did not try and execute Germans and Japanese wholesale, though thousands were certainly guilty of war crimes. Instead, we had a few show trials of selected leaders. But, then we changed the system to prevent further problems.
Today, we have no show trials (Madoff and Kerviel are the poster children for a farcical justice). We have no recriminations. And we certainly have not changed the system.
The rape analogy is certainly in poor taste, but it is spot on.
Really offensive post.
Yes, it is “really offensive” when when public officials try to whitewash the truth. TARP was necessary because of a failure in public and private governance, and banks are still on life support.
Its also “really offensive” when people blame the victim: a classic rape defense strategy that is being used effectively to cover for the violation of public trust.
Jackrabbit,
I “get” what you are trying to say. The points you present are not new and the analogy is not fresh, insightful or seriously considered.
Just so you don’t feel I am picking on you, I likewise object to analogies and inferences to murder. I am offended by the implied lack of civility and regard for the boundaries of good taste and meaningful discussion.
I also think if you desire to pen and publish a posting such as this, you need a thicker skin.
I partially do not want to respond so as to not give you further “food for thought” but your bullying tactics and suggestion that I simply do not get your point deserve a response. But of course you already knew that.
LAO
Didn’t mean to bully. Sorry if it that was the effect. “Really offensive post” didn’t give much to go on.
I realize that the rape analogy wrt the financial crisis is not new, but I think the “rape myths” might be. It only occurred to me because Geithner’s defense of TARP was in the form of “5 Myths”. In any case, I wasn’t really trying for novelty. I just thought it seemed a good device to bring a lot of related material together in a way that people could related to.
While the rape analogy IS somewhat distasteful, it is, I think, largely offset by the transgression.
I encourage people to read the first post, “Tim Geithner’s Magical Mystery Tour Of TARP Propaganda Has Little Use For Truth“ (link above), which delves much more into the problems relating to Geithner’s “5 Myths”.
Also, realize that the cost of the credit bubble is like onion. There are multiple layers.
1. TARP – direct cash infusion
2. “back door bailouts”: suspension of mark-to-market accounting rules, Fed purchases of securities, etc
3. $787 billion stimulus package, extended unemployment benefits, and other support for the real economy.
4. Costs born by individuals – both financial and non-financial, that are not covered by 1-3
5. Substantially increased distrust of banks and government. “Moral hazard” is corrosive. When there is no accountability, people notice and act accordingly.
Whatever TARPs success may be, divorcing TARP from the larger picture does us all an injustice and compound the errors that forced TARP upon us.
This is a deeply offensive post, whose effect will be to prevent people taking as seriously as they should the misconduct in the TARP program. This is indeed offensive and misconduct.
The comparison however does not in any way assist the making of this point. One is disappointed in Yves for not seeing this.
This post was pulled from a comment that I made to an earlier post (as noted by Yves above.) It may not have been as well-considered or as well-supported as a “real” post would’ve been. I can’t speak for Yves but I suppose she thought that it brought the issues together in a novel way.
The reference to rape is indirect (rape myths not rape) just as the need for TARP reflected the violation of public trust that brought us to the brink of disaster.
Lastly, it should be read as a rebuke to Geithner’s “5 Myths”, not as a stand-alone critique of TARP. To best understand the context see the original post: “Tim Geithner’s Magical Mystery Tour Of TARP Propaganda Has Little Use For Truth” (linked in the post above).
This post is totally appropriate.
Financial rape is a totally appropriate metaphor.
The parallels it draws are totally appropriate.
Financial rape slave nation and Pharoah money-murderers.
Go down, Moses.
Thanks craazyman. Some are knee-jerking or not understanding the context.
The point is actually bigger than “financial rape.” People do sometimes liken being swindled to rape. The systematic, institutional fraud that nearly brought down the whole system violated the public trust. It didn’t happen by accident. Those who were supposed to look out for the public interest, failed to do so because of regulatory and political capture. By ignoring the fundamental problems that made TARP necessary, as well as its full cost, Geither’s “5 Myths” is not only misleading, it is irresponsible (and self serving, given the role he played in the crisis).
What measures have been take to effectively break the grip of regulatory capture?
craayman,
I agree.
And I don’t find it offensive at all.
Maybe that’s because I live in Mexico where there is a popular saying, ‘Somos los hijos de la chingada‘, which translates to ‘We’re the children of the rape.’
And then there’s the West Texas rancher and oilman Clayton Williams who, likening rape to the weather, quipped “If it’s inevitable, relax and enjoy it.”
The subtext to both these sayings is to surrender to the rape because there’s nothing we can do about it, it’s the natural state of things. It’s a recurring theme throughout history. Jesus, Erasmus, Samuelson, MLK and Marx all told us it doesn’t have to be this way. But from Augustine, Calvin and Frank Knight (the seminal figure of the Chicago School) come the refrain of a fallen, sinful humankind for whom there is no hope and no redemption.
It’s an imperfect world with imperfect solutions. But if one buys into the defeatism, the result is the unchecked corruption of the Medieval Church, much of modern-day Protestantism or the current degenerate state of the Chicago School of economics.
Offensive or not, this is distracting all of us from the larger issues. The analogy could certainly have been in better taste, but the only thing that seems that we are not discussing is the fraud that is TARP. We have enough smoke and mirrors from the MSM, lets not veer off course in the sanctuary that is NC.
The readers at NC are smart and savvy. But most Americans have a 2 minute attention span and are easily distracted/taken in by MSM Reporting of what Serious People say. And corporations like Banks and BP have huge PR/marketing $ to tell their side (oil companies just LOVE love the environment!)
I’m not saying that what I wrote is the best approach (especially since it started life as just a comment – it could use a paragraph or two for context, for example), but I think it pulls a lot of information together in a way that illuminates the issues, counters the “we are all to blame” meme; and reveals how the Administration misleads us with “happy talk”.
And , once again, these are “myths” written as a rebuke of Geithner’s “myths” and relate to violating the public trust on a massive scale, It is a useful abstraction that clearly does not relate to a sexual attack on a human being.
I agree with those who say it trivialises both issues. IMO this is an inappropriate post – how would you feel if you had been the victim of a sexual assault and you read this…
Rape is a violent crime.
The crimes of the banksters are property crimes.
So the proximate consequences of rape are much more egregious than the crimes of the banksters.
However, if one looks at ultimate consequences, the consequences of the banksters’ crimes are no less violent than rape.
Cheale:
We have all been the victims of a *social* assault. How do we give voice to that? How do we adequately describe our anger and frustration, and seek real change so our grandkids don’t face the same? How do we counter the misconceptions and falsehoods that are manipulating people to accept that public trust can be violated with impunity?
The following is the koolaid:
1) no one could’ve know that there was a credit bubble;
2) we were ALL to blame (easily follows from , we all contributed by taking loans);
3) TARP was an unexpected necessity – because we were ALL responsible, it was right that the Government put up the money to rescue the banks.;
4) TARP is a success! It cost much less than people thought; And boy what a good job by the banks (paying it back) and government!
But in fact, there WERE people that saw the bubble, and “responsible” people WERE aware of the warnings and did nothing. TARP was necessary because **nothing was done right up to the end**. TARP is a “success” only because it has largely been replaced by a slew of other, less visible support to the banks. Furthermore, the cost to the economy from the credit mess is MUCH more than all the direct and indirect support extended to the Banks.
We might;ve all *contributed*, but we were not all *responsible* for this $10 trillion mess (just an estimate – the full cost is yet to be determined). Drinking the koolaid only sets up our kids and grandkids for more of the same.
Vous me surprenez, tu m’etonnes!
One would think in light of transgressions ongoing distinctions of personal vulgarity fall wayside. Just look at it all…immensities burden saddled on further promises not unlike those still echoing from not so distance past…yet parse its common-es.
Americans for all their bravado cower in their ponzi assessed asset Dow/Jones rating agency poli teddy bear complacency, unless its time to send the kick ass high tech sons and daughters bomb you back to the stone age from 20 thousand feet then to send in the robbers and looters brute squad spitting on the indigenous population for their barbarity forces.
The French which we ridicule at every opportunity, are showing us exactly how tame and docile we have become, how we blindly accepted the social imprinting handed down to us from above. They do not dally over such…not at the dinner table distinctions, they move, they demand a place at the table or heads will roll.
Skippy…A land of individuals breed to spend…now with out cash…to satisfy its ends…to wander with out meaning laments dourer.