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The Los Angeles Times brings us news of a most cheering sort:
Six former top executives of housing finance giants Fannie Mae and Freddie Mac were accused of securities fraud Friday by federal regulators for allegedly misleading investors about the size of the companies' risky subprime mortgage holdings.
The one issue on which we at Scragged stand foursquare with the Occupy Wall Street protesters is the belief that bankers who knowingly committed fraud should be investigated, charged, tried, convicted, sentenced in a court of law, and locked up for a long time. Unlike OWS, we have nothing against rich people who earned their money honestly and fairly, but we are every bit as enraged about lying criminal banksters and the politicians who enabled them.
The fact that, as of yet, not one single banker or government crook has gone to jail over the mortgage bubble collapse is a travesty. Unlike OWS, we don't believe in lynchings or trial-by-combat in the court of public opinion. That said, there absolutely must be a day in open court when all America can see the evidence of financial crimes put before a jury.
It's not illegal to make mortgage loans that recipients can't pay. It's not even illegal to make stupid loans; in fact, as we've seen before, the government leaned hard on banks to force them to do just that. The very definition of a "subprime loan" is a loan made to someone who probably can't pay it back.
What is illegal, though, is lying about the loans you have made. That's what Fannie Mae, Freddie Mac, and their political supporters did repeatedly both to Congress and in regulatory submissions. Rep. Barney Frank (D, MA), who recently announced his retirement, used his political clout wrapped in a cloak of lies to prevent the Bush Administration from reforming Fannie and Freddie; those blocked reforms, incidentally, would have avoided the housing collapse that triggered our current depression. The fact that Frank was enjoying the homosexual favors of Fannie Mae's assistant director of product initiatives, of all things, had nothing to do with it, of course.
Rep. Frank will probably never answer for his crimes, though it's a relief to know he won't be befouling a Congressional seat much longer. It's a tremendous relief to see that, just possibly, some of the other crooks and liars will pay at least some small portion of the price that is their due.
From the description of the charges given in the Times, the issue is as cut and dried as it is possible to be: the executives of Fannie and Freddie intentionally lied about how many subprime mortgages they'd made. It isn't possible for a banker to be consistently mistaken about that sort of thing; the prosecutor need merely show the balance sheet which shows the number of loans, and then play the tape of what the executives told the public.
Alas, at the bottom of the Times article we see that even they were overenthusiastic:
Updated 8:29 a.m., Dec. 16: An earlier version of this post used the word "charged" in referring to the SEC's action. The SEC filings are a civil enforcement action; they are not criminal charges.
Perhaps not; but let's hope it's merely not yet. Orange jumpsuits all 'round!
The Occupy Wall Street protests can take a fair share of the credit for this worthy development, because they've been hammering on the Democratic party in power to take action for some time. If the end result of OWS is fraudulent bankers and crooked politicians in the slammer, then suffering through the stench of Occupation will have been well worthwhile - the more so because most of the criminals in and out of government are none other than Democrats themselves.
No wonder that Democrat party grandees, after first backing OWS, are beginning to back away in horror! Indignation by voters at politicians covering over theft is non-partisan, just as is indignation on the part of politicians at the very thought that they might be expected to abide by the rules they impose on everyone else.