At a breakfast for ABNY this morning in Midtown, Mayor Bloomberg told a room of the 1% exactly what it wanted to hear: those kids in Zuccotti Park are misguided. "It was not the banks that created the mortgage crisis," Hizzoner said, "It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp." You hear that Attorney General Schneiderman? Leave those innocent banks alone!
Azi Paybarah reports that Bloomberg rhetorically told the protesters, "I hear your complaints. Some of them are totally unfounded," and made the point that the members of Congress "were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will." Good point! Who can forget the Give People Shitty Mortgages, Bundle And Sell Them For Profit Before Betting Against Them Act of 2005?
While Congress (and especially the Bush administration) did in fact push for increased lending to homeowners, they certainly didn't advocate for collateralized debt obligations to be bought, sold, and repackaged to the point where banks like Goldman Sachs and Citigroup bet against them and misled investors to turn a profit. But that was probably Congress' fault too.
Former Mayor Ed Koch was also at the breakfast, and took a more reasoned tone. "I'm not an enemy of Wall Street," Koch said. "I love the stock market..."I would differ with respect to blame here." He continued:
Let's take Goldman Sachs. It's fined by the S.E.C. $550 million. What the hell do they care. That's the cost of doing business. Citigroup, fined $285 million. What do you think they got fined for? Schmutz on the sidewalk?
They got fined because they abused their relationship with their clientele. And I want to see somebody, and I haven't seen it happen yet, some C.E.O., some F.O. C.F.O., I want to see one of them from a major corporation punished, criminally. They beggared the people in this country. More than $2 trillion was lost in the great recession. There's something wrong with a kid who steals a bike going to jail and someone who steals millions paying a fine.
Not to Mayor Bloomberg. Occupy Wall Street protesters: you've had your fun (-sized candy bar) now it's time to head to DC.