Banks Declare War on Democrats

Banks declare total war...against Democrats

Which leads us to point number three: who's going to be the target of the banksters' ire at finding themselves the target of government lawsuits?

You guessed it: Democrats.

Ben White at Politico's Morning Money column wrote that banks are considering “Total War,” saying:

“M.M. hears that instead of contemplating settlements of the FHFA mortgage-backed securities lawsuits, big banks and their attorneys are more likely to pursue what insiders describe as an all out war strategy in which they go after Fannie Mae and Freddie Mac (and by default their Democratic supporters) in a scorched earth strategy to show the GSE’s took an active role in creating the very securities they are now suing the banks over.”

You can see the talking points already in several of the business press pieces on this story, which blame the subprime mortgage mess on lawsuits to prevent discrimination against poor people (usually people of color, who faced housing discrimination for oh, most of US history) or on Fannie and Freddie's lending itself.

Never mind that those arguments leave out the responsibility of the big banks to, you know, not commit fraud. Bad mortgages on their own would not have caused the current economic crisis. The securitization of that mortgage debt combined with speculation drove up the price of housing; the decline in real wages led more and more people to borrow against the value of their homes. Systematic attacks on the little wealth that most working people had by a small handful of ultra-wealthy suits on Wall Street and around the world created the crisis, not the desire of low-income folks to maybe have a nice house to pass on to their kids.

But as we see so often, the argument from the banksters and their apologists in politics will be that we all should have known better, that Fannie and Freddie were “sophisticated investors” and should have been able to foresee that bankers were lying to them.

Rep. Miller shrugged off this argument. “I would like to see the cases, the legal authority that makes that a defense to this lawsuit. The argument that he's a bad guy too doesn't strike me as a very strong legal defense.”