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Thursday, February 09, 2012

Attacking Schneiderman and Harris is a Mistake

by David Atkins

I don't have too much to say about the big foreclosure settlement that Dave Dayen hasn't already covered far better than I could. It's a complicated mess, but suffice it to say that while the deal does provide some relief to struggling and victimized homeowners, and does allow for the possibility of future investigations, it's largely a slap-on-the-wrist measure that puts no one in jail and lets the banks off the hook for a tiny fraction of what they ought to be paying out for their crimes.

There are many people and factors to blame for what happened here, among them:

1) the banks, obviously, which were engaged in such a frantic rush to build their mortgage-backed collateralized debt obligation castles in the air that they stopped caring if the titles to homes were legitimate, and conveniently entrusted essentially their entire title verification process to the shady MERS system;

2) the financial sector executive compensation system, which ensures that everyone involved in this crime-of-the-century is actually rewarded for their part in it, no matter what settlements might be made;

3) the legal system, which makes prosecuting these sorts of crimes even at an institutional level, to say nothing of an individual level, extremely difficult;

4) the government in general, which failed for years to regulate a patently broken title system and couldn't exactly afford for too many questions to be asked about why the banks were using this patchwork system in the first place;

5) the entire asset-based economic system built by conservatives and neoliberals alike, which has put the entire economy at the mercy of the health of financial institutions and asset-based markets like stocks and housing;

6) the Obama Administration, which has bought into the neoliberal asset-based model lock, stock and barrel, and has wanted nothing more than for this ugly situation to be swept under a rug so that the financial institutions could have "regulatory certainty" and "confidence" again.

But the people who should not be getting the blame are brave folks like Schneiderman and Harris. Schneiderman and Harris stood up to immense amounts of Administration pressure for months in an attempt to secure as much accountability as they could for the recklessly criminal financial sector cartels. A settlement on this issue was always going to happen for the reasons I stated above: the entire weight of the system basically demanded it. As long as banks are allowed to run our economic lives, nothing serious is going to be done to put financial institutions already on precarious footing into even more danger. Nothing is going to be done to throw their major executives in jail as long as people and government are seen as subservient to the Great Free Market, rather than the other way around.

Harris and Schneiderman fought as long and as hard as they could against this tide, and their efforts without question led to a better settlement than would have been achieved without them. I know there's a temptation to rail against them and declare them traitors, and that's understandable.

But I would advise that progressive wrath be focused where it belongs: on Holder, on the President, on the financial institutions and their executives (of course), and on the entire neoliberal ideology that enabled this situation to occur in the first place.

Not, however, on Schneiderman and Harris, without whom this settlement would have been worse, and without whom this issue would have been quickly and quietly swept under the rug without significant national attention. If we, hating the end result, are quick to turn on our best friends and strongest champions no matter whether they fight for us or not, no one will stand up for us in the future.