Cockburn on Spitzer, Wall Street, and UFE

by Dollars and Sense

Alexander Cockburn's column in the March 31st issue of The Nation (alas, not the most recent issue—some magazines are much more timely than D&S) argues that former New York governor Eliot Spitzer's downfall was due partly to the fact that he frightened Wall Street. "There were plenty of powerful financial institutions that craved his downfall and whose employees cheered wildly when it happened." Cockburn goes on:

A little perspective is useful here. We are now well advanced in an election year where the prime candidates, Barack Obama, Hillary Clinton and John McCain, have scarcely made a centerpiece of their campaigns the outrageous and racist thievery practiced by Wall Street in the subprime scandals. A lawsuit filed by the NAACP on March 7 makes for instructive reading in this regard. It seeks to fast-track the NAACP's class-action lawsuit against Washington Mutual, Citi, GMAC and fifteen other mortgage firms that steered African-American borrowers into predatory loans.

And here Cockburn cites a report by our neighbors and comrades, United for a Fair Economy:

The suit cites a 2008 study by United for a Fair Economy estimating losses of $164-$213 billion for subprime loans during the past eight years. UFE considers this to be "the greatest loss of wealth for people of color in modern US history."

(We were happy to be able to provide technical support for UFE's report, with the help of D&S collective member Bryan Snyder and Prof. Irvin Morgan of Bentley College.)

Cockburn goes on to point out that whereas the federal government, including the SEC, has no prosecutorial powers with respect to subprime powers, this was not the case for New York State, whose Martin Act is:

the most powerful criminal enforcement weapon in the country and one used to great effect by Spitzer when he was Attorney General. In January there were news stories about AG Andrew Cuomo using Martin to go after the subprime corporate miscreants. Such an onslaught, with the backing of Governor Spitzer, was undoubtedly making Wall Street nervous. Now Spitzer is gone. Wall Street has nothing to fear from Clinton or from Obama, whose candidac[ies] float on vast contributions from Wall Street, as detailed by Pam Martens in Counterpunch.

 

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3/26/2008 07:28:00 PM