financial crisis

Freddie Mac’s Conflict of Interest and the Betrayal Of The American Homeowner

/ Jack Marshall / 7 Comments

Possible, but expensive.

Though the political implications of this disturbing story, which broke today on NPR, are wide-ranging, this isn’t a political blog.  I will avoid the temptation  to wade into them. That’s fine: the ethical implications are bad enough.

Freddie Mac, the taxpayer-owned mortgage giant, has been doing a Goldman Sachs, betting against the very homeowners it is pledged to serve by making multi-billion-dollar investments that will profit Freddie Mac only if homeowners can’t get out of  expensive mortgages with interest rates well above current rates. Of course, Freddie Mac’s job is supposedly to do the opposite…to help homeowners find cheaper, fairer mortgages. And we were told, by the Obama Administration, that this what it was working to do.

This is called a conflict of interest. And since Freddie Mac, along with its cousin Fannie Mae, is owned by U.S. taxpayers, this is also a massive breach of trust by the Federal government. Freddie and Fannie were bailed out in 2008. The companies insure most home loans in the United States, making banks able to lend at lower risk, and the companies’ rules determine whether homeowners can get refinanced and on what terms. Now we know that Freddie Mac, at least, profits when they fail.  Continue reading →

Case Closed on Obama’s Leadership Skills

/ Jack Marshall / 6 Comments

Anyone who watched the Beltway public issues panel show “Around Washington” knows that there is no more loyal defender of Barack Obama than Colbert King. King is a Democrat and a card-carrying progressive, and also a Pulitzer Prize winner and career-long Ethics Hero, as he has doggedly and revealingly documented the corruption in all corners of the Washington. D.C. government. Colbert King, in short, is a truth-teller, and while his ideological leanings have often caused him to defend Obama when it would be more responsible not to, he has integrity. This weekend, in his weekly column for the Washington Post,  he joined a chorus of conservative critics by expressing dismay that the President would choose this time to take a vacation on Martha’s Vineyard:

“Is there anyone in the White House with nerve enough to tell Barack Obama that Martha’s Vineyard is the last place on earth that the president of the United States should find himself next week? Don’t get me wrong. I don’t begrudge the chief executive a little time off from the Oval Office. But to be leaving town to spend 10 days luxuriating in an affluent, New England summer town when millions of Americans can’t find work? To fly off to the Vineyard when the public is losing faith in Washington’s ability to fix the nation’s economic problems, and with people anxious about their futures? What is he thinking?”

I can answer that, and in fact I have. Continue reading →

Incompetent Elected Official of the Week: Rep. John Conyers (D-Mich)

/ Jack Marshall / 6 Comments

Is he the dumbest Representative? Let's hope so.This is perhaps the ethical equivalent of shooting fish in a barrel (which, come to think of it, isn’t very ethical), since Rep. Conyers has been displaying his rank incompetence in word and deed for decades (he was first elected in 1964). It was Conyers, after all, who during the health care reform bill debate last year not only admitted that he hadn’t read the bill, but ridiculed the notion that anyone would expect a House member to read such a complex, wide-reaching piece of legislation before voting for it. I might suggest that the Congressman is suffering the mental ravages of age, but  a) that would be age discrimination and 2) he doesn’t deserve an excuse. He’s always been like this.

Conyers is also a powerful and high-ranking member, so his special brand of cluelessness is neither harmless nor cute. It is useful, however, at least to Republicans looking for the perfect example of the proverbial Democratic Congressman who only knows one way to govern: spend as much money as possible in ways that will line the pockets of constituents and thus guarantee re-election. The Republicans would like the public to believe that all Democrats are like this, which isn’t true. The fact that at least one Democrat is like this, however—not only like this, but candid and proud about it—makes the stereotype much more credible.

Here is what Conyers said this week: Continue reading →

The Kardashian Kard Saga: Proof That We Are Doomed?

/ Jack Marshall / 4 Comments

In “Terminator II,” there is  a scene in which young John Connor–desperately trying, along with his mother and the android killing machine sent from the future to protect the boy, to prevent the apocalyptic future that waits for him—sees young children gleefully pretending to murder each other with toy guns.  “We’re not going to make it, are we?” he asks the Terminator. “People, I mean.” The fact that a bank has chosen the Trashy Kardashian Sisters to promote a credit card aimed at teenagers prompts approximately the same sense of futility. At a time of crisis in which our culture that desperately needs to encourage responsible fiscal conduct led by financial institutions we can trust, this is what we get.

We’re doomed. Continue reading →