WSJ: Andrew Cuomo has more to answer for than does Bank of America
Politicians love to blame the financial crisis and by extension the recession on greedy bankers, but as the Wall Street Journal notes today many of them, like New York Attorney General and former Clinton Administration Secretary of Housing and Urban Development Andrew Cuomo have much to answer for:
With his fraud lawsuit last week against Bank of America, New York Attorney General Andrew Cuomo has joined the long queue of politicians blaming bankers as the chief culprits in creating the financial panic and recession. We dealt with the merits of those BofA charges on Saturday, but that isn’t the end of this story. There’s also the not so small matter of Mr. Cuomo’s own role in promoting policies that fed the housing mania and set the stage for the meltdown.
Before he pursued statewide office in New York, Andrew Cuomo was Secretary of Housing and Urban Development during Bill Clinton’s second term. And lest you think his tenure is forgotten, the HUD Web site has an instructive item in its Archives section.
Entitled, “Highlights of HUD Accomplishments 1997-1999,” the document chronicles the “accomplishments under the leadership of Secretary Andrew Cuomo, who took office in January 1997.”
HUD’s Web visitors learn that in 1999 “Secretary Cuomo established new Affordable Housing Goals requiring Fannie Mae and Freddie Mac—two government sponsored enterprises involved in housing finance—to buy $2.4 trillion in mortgages in the next 10 years. This will mean new affordable housing for about 28.1 million low- and moderate-income families. The historic action raised the required percentage of mortgage loans for low- and moderate-income families that the companies must buy from the current 42 percent of their total purchases to a new high of 50 percent—a 19 percent increase—in the year 2001.”
It’s a sign of Washington’s continuing failure to examine its own failures that HUD still views such a policy as an “accomplishment.” It’s as if the Pentagon described Pearl Harbor as a victory.
The Village Voice has much more on Mr. Cuomo’s actions at HUD here.
Bottom line the Federal Government and Federal Reserve are every bit as culpable as bankers are in creating this mess… Andrew Cuomo is just one of several prominent political figures who has to answer for his role his roll in creating the financial crisis. Unfortunately, I doubt Washington’s policy makers will ever admit to their culpability, it’s much easier to demonize and scapegoat Wall Street’s greedy bankers.
Peter Schweizer does a good of laying the anatomy of the crisis in Architects of Ruin: How big government liberals wrecked the global economy—and how they will do it again if no one stops them
Is More Spending the Answer to Our Economic Problems?
I mentioned last week that the Government and Federal Reserve had spent, lent or committed $12.8 trillion, here’s video from stopspendingourfuture.org that helps put that in perspective:
In short, we have spent more bailouts than we did on World War 2!
Bloody Monday…
The dust is starting to settle on what has been very ugly day on Wall Street. It’s not over by any stretch of the imagination… It’s going to take several days if not weeks for the markets and Main Street to fully digest the implications of Merrill Lynch’s shotgun marriage to Bank of America, Lehman Brothers bankruptcy filing and AIG’s troubles.
I don’t have any particularly interesting insights in to the situation all I can say is this:
As traumatic as today’s events have been for the employees, investors and clients of Lehman Brothers, Merrill Lynch and AIG they had to be allowed to happen… If our financial system is going to have any kind of integrity financial institutions have to be allowed fail. The government can’t keep stepping in and bailing these institutions out.
The Wall Street Journal has complete coverage here (requires subscription).
If you have a life-insurance, auto or homeowners policy through AIG, you might want to look at this MarketWatch piece:
It’s unclear at this point how AIG will ultimately fare, but the good news for consumers is that each state has a guaranty association in place to protect policyholders in the event of an insurer’s failure.
For its part, AIG says its insurance subsidiaries, all of which are wholly-owned, are “well capitalized and they meet or exceed local regulatory capital requirements,” said Joe Norton, an AIG spokesman. “These companies continue to operate in the normal course of business to meet our obligations to policyholders.” See full story.
But even if AIG — or any other insurer — faced insolvency, state guaranty associations exist to protect consumers.
for a little reassurance.
Ed Morrissey takes a look at the politics here.
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