Let's not look at the burning carnage in the rearview mirror

Let's Not Look At the Burning Carnage In The Rearview Mirror

by digby

Because this has worked out so well for us so far:

U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday that the Obama administration will attempt to protect homeowners and police the kind of paperwork fraud that led the nation's largest banks to temporarily halt foreclosures this month, but added that the administration had yet to find anything fundamentally flawed in how large banks securitized home loans or how they foreclosed on them.

"Where any homeowner has been defrauded or denied the basic protections or rights they have under law, we will take actions to make sure the banks make them whole, and their rights will be protected and defended," Donovan said at a Washington press briefing. "First and foremost, we are committed to accountability, so that everyone in the mortgage process -- banks, mortgage servicers and other institutions -- is following the law. If they have not followed the law, it's our responsibility to make sure they're held accountable."

He added, however, that the administration is focused on ensuring future compliance, rather than on looking back to make sure homeowners and investors weren't harmed during the reckless boom years. The administration is "committed to forcing institutions to change the way that they conduct business," Obama's top housing official said, "to make sure these problems don't happen again."

Well that's a big relief. And I'm sure they won't. And anyway, to get all prissy legal beagle on the finance people would end up threatening the system and that would be bad for all of us (especially the people who run it.) Of course, if anyone should suggest that some of the individuals who caused all this carnage might be required to pay a price for what they did just as a sort of warning for the future ... well then, all bets are off. In fact, there are no bets. The financial firms are to be allowed to do whatever they choose or they'll blow this whole place to smithereens. (That's the "free enterprise" the Koch brothers and our other wealthy overlords are working overtime to protect.)

The deadbeat citizens, however, must be held accountable lest the country creates a monstrous moral hazard. Believe me, it's not something that our dear leaders want to do. It's just that no functioning society can allow average people to believe that they are more important than the wealthy owners who need to risk other people's money for the good of the country. It's tough love. We should be grateful for it.