The inimitable Matt Taibbi pens a searing recap of the financial industry’s Ponzi scheme in Rolling Stone: “This wasn’t weather coming at them, but the consequences of years of untrammeled criminal fraud.
“Banks like Lehman had lent billions to fly-by-night mortgage mills like Countrywide and New Century. Those firms in turn sent hordes of loan hustlers into lower-income neighborhoods offering magical deals to anyone who could “fog a mirror,” as former Countrywide executive Michael Winston once put it to me. The targets were frequently minorities and the elderly.”
“In other words, everyone in the upper echelon of the finance community got Paid In Full in the bailout, even the exact people who screwed up the worst. But outside Manhattan? It was like Warren Buffet’s partner Charlie Munger sneered: People should just ‘suck it in and cope.’
“The biggest victims in this miserable story turned out to be poor, nonwhite, and elderly. One of the main things the financial press missed in its countless crash post-mortems is that the subprime scam was significantly about race. In its particulars, it was really just a rehash of ancient race crimes like 'contract selling,’ a predatory white-on-black home loan scam from the Jim Crow days that often involved no money down, but severely punitive rates. …
“The housing bubble devastated black and Latino homeowners, disproportionately to white counterparts. The James Woods/Dick Fuld remark about crack dealing wasn’t far off. Subprime blighted minority neighborhoods with similar speed and ferocity. Debt was the crack of the early 21st century. And we bailed out the dealers.”
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