Trouble, trouble everywhere, not just with notorious big cases like Madoff.
Today’s wave of dubious deals is more pervasive and grass-roots in nature than the S&L debacle, which primarily involved thrift executives and their borrowers. Developers, mortgage brokers, appraisers, bankers and borrowers alike are under the microscope of state securities regulators and federal prosecutors.
“We’ve always had people fudging the numbers on their loan application to buy the home they wanted to live in,” said Joe Boyer, supervisory special agent for the FBI in Portland. “During the boom, we had people trying to do 50 homes. It was all about the real estate appreciation.”
Boyer is a key member of a mortgage fraud working group in Portland formed among local, state and federal investigators to combat real estate and mortgage fraud.
It’s good that law enforcement is finally taking action, I guess. The horses are out of the barn, down the road and on a plane to an offshore location, sipping tropical drinks and laughing, but hey, it’s something. Basically huge portions of American society became a kleptocracy, and with nobody enforcing existing laws or lending standards to any great extent, it seems like it became socially acceptable to do wrong.
Thus shall the disastrous neo-liberal epoch of 1980-2008 be remembered. Both parties shared in this, and to a certain extent many politicians seem not to have learned a great deal. This is TWICE in the last twenty years this has happened. It’s inexcusable, and more importantly, downright stupid and unnecessary.
While it’s true that proper regulation must be neither too burdensome nor too lax, we’ve lived through an age where the reflexive attitude of most bidness guys and gals, especially in the house building, buying and selling industry, is to oppose regulation just ’cause they wanna. It makes ’em mad and so they run lying third party expenditure ads and so on, kind of like a child holding its breath. And like a naughty child, they are now very, very sorry that they got caught and everything is all messed up.
Babbling about the invisible hand is all fine and dandy, but it’s neither realistic nor much of a policy. The automatic response to anyone still claiming markets will police themselves should be a belly laugh.