Fraudclosures and Unemployment in America

Published on Global Research.ca, by Danny Schechter, Oct. 18, 2010.

… What should be done? Webster Tarpley speaks for many in calling for a national moratorium on foreclosures, a course of action rejected by the White House.

“The current chaos in home foreclosures is once again the direct responsibility of the zombie bankers themselves, who have neglected all traditional legal and accounting standards concerning the necessary paper trails in their frenzied desire to securitize mortgage loans and make them into toxic derivatives in the form of asset-backed securities and mortgage backed securities. The zombie bankers, already the recipients of $24 trillion of public largess in the form of the various bailouts, have turned out to be incompetent even in the technical aspects of their own thieving racket. 

But the chaos in the bankers’ filing systems is nothing compared to the chaos created by the millions of foreclosures they have engineered, based on adjustable-rate mortgages and similar misleading contracts which never should have been legal in the first place. For some time, it has been evident that the defense of the American middle class requires a blanket, orderly, federal freeze (or moratorium) on all foreclosures on primary residences, similar to the New Deal protections offered to family farms by the landmark Frazier-Lemke Act of 1935-1949 during the previous depression.”

Ellen Brown, author of Web of Debt, goes further in Yes Magazine, asking if it is “Time to Break Up the Too-Big-to-Fail Banks?

“Popular financial analysts, crippling bank losses from foreclosure flaws appear to be imminent and unavoidable. The defects prompting the “RoboSigning Scandal” are not mere technicalities but are inherent to the securitization process. They cannot be cured. This deep-seated fraud is already explicitly outlined in publicly available lawsuits.

There is, however, no need to panic, no need for TARP II, and no need for legislation to further conceal the fraud and push the inevitable failure of the too-big-to-fail banks into the future.”

The faux populists of the Tea Party right have been silent on the issue. Glenn Beck dropped all populist pretensions by calling on followers to give money to the Chamber of Commerce so they can better pursue a corporate agenda. One Republican here assured me that Barney Frank caused the whole financial crisis and that he will be tossed out of office in the midterm election. (He didn’t just blame him—he hates him!) At the same time, one right wing website did publish a detailed denunciation of housing fraud.

As depressing as the lack of any real ongoing mass-based populist movement of the left or the right is another reality that The Washington Post finally spills even as millions of Americans buy into the illusion that new politicians can save us while angry voters here in Florida prepare to vote the Tea Party in to office.

“Let us tell you an Ugly Truth about the economy, a truth that no one in power or who aspires to power wants to share with you, at least until after the midterm elections are over. It’s this: There is nothing that the U.S. government or the Federal Reserve or tax cutters can do to make our economic pain vanish overnight.”

So what will it be? More money for the banks to bring them under control, more illegal foreclosures, or some type of justice for homeowners? Will this crisis lead us to demand action to break up these financial behemoths or will we just sit by and watch a new crisis sweep us deeper into our own mines of despair? (full text).

(News Dissector Danny Schechter wrote The Crime of Our Time and directed the film Plunder The Crime Of Our Time. (Plunderthecrimeofourtime.com) Comments by e-mail.
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