Commentary
Why we never seem to get the change we need
By Tim Buchholz
Online Journal Contributing Writer


Jan 16, 2009, 00:16

I have a friend who often asks me, �Do you think most people realize how incompetent their leaders are?� Maybe, as George W. Bush said in his final press conference, we �misunderestimate� them.

I know it must be very difficult to run a country. I�m not saying I could do it better, although I�d love the chance to try, but it gets very difficult to keep believing that our best interests are really that important to our leaders. Are they really tied to corporate interests, to the not so mighty dollar, more than to the will of the people? I hope not, but it gets harder and harder every day to think otherwise. And when someone finally stands up, it�s amazing to see how quickly they are the ones that fall.

I was reading an article about the bailout, and the author was discussing the lack of transparency in the way the money is being handed out. Barack Obama recently said that the next $350 billion will come with more transparency, but they promised us that with the initial $350 billion. And even though Congress is calling out the banks, demanding to know how our money is being spent, surprise-surprise, nothing changes.

Reuters reported that the TARP money is being given to �healthy� banks. Do healthy banks need to be bailed out? Wouldn�t you think it would go to the banks that are struggling? Instead, it appears some of those �healthy� banks are using the money to buy the �unhealthy� ones.

My office banks with Chase, and, several weeks ago I was sent to do the daily bank run. While waiting in line I heard the gentleman in front of me talking to the teller, telling her how Chase is now the largest bank in America, passing CitiGroup. If you track Chase throughout this financial crisis, they have made some major acquisitions, such as Washington Mutual and the Federal Reserve financed buyout of Bear Sterns, all while being a struggling �healthy� bank and receiving at least $25 billion in aid from the bailout. Any bank that can afford to buy another bank doesn�t need my tax dollars. I later found that Chase is only number 2, behind Bank of America after their purchase of Merril Lynch. So, instead of helping banks begin lending again, which was the point of the money, the banks are doing �what they will.�

So, Mark Cuban, number 446 on Forbes� 2008 �The World�s Billionaires� list, started a website called BailoutSleuth.com, which will be, according to the website, �tracking the federal government�s $700 billion plan to rescue troubled banks and financial services companies by using public money to buy distressed assets or inject additional capital.� The first post was on October 13. Oddly enough, on November 17, the SEC filed a complaint against Cuban alleging insider trading from 2004. Why did it take four years for this case to be filed? And isn�t it a little convenient that it came a month after he started his website?

Then I was surprised to find former New York Governor and Attorney General Elliot Spitzer had written an op-ed in the Washington Post released on February 14, 2008, entitled �Predatory Lenders� Partner in Crime -- How the Bush Administration Stopped the States from Stepping In to Help Consumers.�

The article began, �Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers� ability to repay, making loans with deceptive �teaser� rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets. Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.�

He said that, frustrated with the federal government, he and the attorneys general of the remaining 49 states put together new rules and regulations at the state level to protect consumers.

�What did the Bush administration do in response?� he asked. �Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no. Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.�

Spitzer said that this was done through, �an obscure federal agency called the Office of the Comptroller of the Currency (OCC).� Spitzer said since the Civil War this agency has been examining national banks� books and making sure they were balanced, but, in 2003, �during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government�s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.� So all the new regulations they had put together became null and void.

I doubt many of us read or remember this article by Spitzer, but I�m sure many of us remember the scandal that came out in the New York Times on March 10, 2008. It seems that the day before Spitzer�s op-ed was published he was being investigated for his involvement with a prostitution ring. Two days after the New York Times article, and about a month after his op-ed, he announced his resignation.

See what happens when you stand up to the government? I am not saying that what these men did wasn�t wrong, though after reading the case against Cuban, I think I would have done the same thing he did. And after seeing the pictures of Elliot Spitzer�s friend, I might have done the same thing on that front too. But surely the crimes they were accused of pale in comparison to what they were trying to bring to the light. These cases, along with the Valerie Plame/Scooter Libby case, the recent report that Obama�s Treasury secretary-designate can�t seem to do his own taxes right, and many more too numerous to count, make it very difficult to believe in the integrity of our government. The sad reality is it appears the only way to take on the government and win is to have a clean slate yourself, which we all know is a rare among today�s politicians. The power of the press and public perception seem to be stronger than the power of truth.

It reminds me of the second draft of the bailout bill, the one that passed Congress. The first bill was just three pages long, the revised bill that finally passed came in around 400. And upon reading all the new perks and pork, I could foresee the headlines in the paper the following day. �Congressman Such and Such voted against the much needed tax break for wooden arrows, designed to level the playing field in our district, but the congressman�s opponent in the next election vows to fight for the tax break for the district�s critical industry.� Or the challenger�s campaign ad in the next election, said in a deep voice with scary sounding music playing in the background: �Congressman Such and Such doesn�t support wooden arrows, how can he (or she) support the people of our district? Vote for So and So. I�m So and So and I approve this message.�

Until we are able to find a better crop to pick our politicians from, and remember, they are coming from us, I think we need to use a little of our own common sense. �Let him without sin cast the first stone� is a hard line to follow when you are dealing with a bunch of sinners. We need to evaluate the crimes. We nearly impeached Clinton for his �antics� in the Oval Office, but Bush got away with taking us to war on false information. And as the apparent �mistakes� keep adding up, and my friend keeps telling me how incompetent they are, maybe Bush is right, and we are �misunderestimating� our leaders. Maybe they knew what they were doing all along.