Ya gotta love some kangaroo courts. MORE conducted one on Saturday to try the banks that aren’t modifying mortgages, as they promised to do when they took all that bailout money. And the thing about good kangaroo courts is the way they play to the masses. This one did. It gave us righteous indignation mixed with comic relief. Beautiful.
The judge allowed the “prosecutor” to call six witnesses. The first was an “expert in economics”, who testified about the causes of the Great Recession. He said that until the mid eighties, the financial sector of our economy grew in tandem with every other sector of our economy. Our GDP relied on companies that actually made things, that hired people; and the financial sector grew at the same pace as those companies did. But starting with the Reagan era, that evenly paced growth has been out of whack. The financial sector has grown more than twice as much as other sectors. At the same time, jobs were being shipped overseas. Therefore, far too much of the growth of our economy has been concentrated in the financial sector of our market. As the competition in that sector intensified, the CEOs took more chances. They extended credit that should not have been offered; they created financial instruments that should not have existed.
In the forty years between World War II and the Reagan era, everybody’s income almost doubled; but since then, wealth has been increasingly concentrated in the hands of the top one percent of Americans. Meanwhile the middle class–seeing many of its jobs shipped overseas–has basically been deconstructed.
The prosecutor’s other five witnesses were homeowners, and these people were not playing a role, they were telling their all too real stories. Each one described the same basic pattern: once they began having trouble making payments, for whatever reason–because one witness had had to replace the entire plumbing system in an old house and then discovered additional costly problems with it; or because another had lost his job; or because a couple had no health insurance and the wife developed major medical problems; or because a woman’s adjustable rate mortgage went from a monthly payment of $721 to $991 and then to $2100–as soon as those problems put people in need of refinancing or a mortgage adjustment, the vampire banks set about sucking as much blood as possible out of their victims, never mentioning that foreclosure was going to be the probable outcome. The banks, counting on homeowners’ hopes of resolving the problems, extorted unjustified fees and continued teasing mortgage payments out of them–before finally dropping the foreclosure bomb.
Comic relief made it possible to listen to all this grim news. After each homeowner testified, the “defense attorney” smoking a humongous fake cigar, would ask a single question, something along the lines of: “And your husband lost his job because he’s a gambling addict, isn’t that true?” The defense offered two “witnesses”. One was an airhead who dropped out of cosmetology school and took a job as a “stage three loan modification engineer”. Her main duty was to answer phones and pass angry homeowners to other “engineers”, who in turn passed them on to somebody else. The second witnss was a “bank official” who gave us plenty to boo and hoot about. There was lots of hot air about irresponsible homeowners who don’t know what it means to be accountable and much patting of his own back because he works so hard. (By the way, “When a man tells you that he got rich through hard work, ask him ‘Whose?'”–Don Marquis)
Much to the slick defense attorney’s chagrin, the jury, which was everybody in the audience, ruled against the banks. But how could they do otherwise, now that they had been informed, for example, that the banks–unlike us little people–pay practically no income taxes. The jury didn’t it that the banks promised to help distressed homeowners, as a condition of TARP money, and then took advantage of them instead. Let’s see now, how many of those CEOs have been sent to jail for their nefarious actions? Ah, but you know the answer.
Americans hate the big banks. And they should.
I talked to Jeff Ordower of MORE about the purpose of the People’s Hearing. It was, he said, to get the word out–Alvin Reid of the St. Louis American was filming, as was I–and thus to continue exerting pressure on Attorney General Koster to bring suit against banks for their misbehavior. Mary Boehm, who testified, tells me that the investigator from Koster’s office has called several times now but has not yet interviewed her husband and herself. A lawsuit charging Bank of America for its crimes against its customers would be welcome anytime, Mr. Koster. But preferably before all the homeowners seeking modifications die a natural death of old age. Just a suggestion: could you maybe aim for June?