Thursday, September 18, 2008

Republicans & Regulation: Crisis Makes for Strange Bedfellows

Posted by on Thu, Sep 18, 2008 at 2:36 PM

click to enlarge Roland_20Arnall.jpg
This man was among the largest predatory lenders in the country... so Bush made him ambassador to the Netherlands. Don’t look now, but the Republican Party appears to be going through a seismic shift – at least within the less loony factions. The people who once loathed regulation, believing the vaunted free market could cure all, have suddenly decided that freedom has a tendency to get self-destructive if left to its own devices. In recent days we’ve had Tennessee Republican Senator Lamar Alexander calling for increased pollution controls on coal plants. Meanwhile, fellow Senator Bob Corker is behind a bill that would force automakers to make 85 percent of their cars fossil fuel-free within 20 years. Even VP nominee Sarah Palin, who appears to hail from the fire-breathing wing of the party, is calling for a complete overhaul of financial regulations. Of course, calling for something and actually doing something are two different things. Alexander must convince a party that until only recently believed there was no such thing as global warming, and now refuses to believe it’s man-made. Corker’s been blistered from the hard right because his bill would naturally require tax money to make it happen. And Palin isn’t the first to ring the bell for increased regulation of Wall Street, which seems to have a crisis every five years. After the accounting crisis, the dot-com bust, the S&L failures, and the latest subprime lending explosion, everybody’s called for heightened scrutiny. Then the campaign funds from Wall Street come flooding in, and both parties begin to pull the teeth out of any bill on the table. But we here at Pith would like to hear from the first Republican to once again embrace the noble concept of consumer protection. Beneath President Bush’s many larger failures – which can’t be calculated without a PhD in math – is his reign of terror on consumers. Be it tort reform to protection from wayward pharmaceuticals, no president has done more to screw the American consumer than our current one. Sure, the big investment banks are currently taking the hit for blowing up their companies. But the origin of the lending crisis largely stems from wholesale fraud at the consumer level. Okay, so some homeowners who defaulted were merely dopes, biting off way more mortgage than they could chew. Yet there’s also pounds of evidence showing lenders systemically defrauding their clients through misleading paperwork, falsified interest rates, and pure scammery. Before predatory lending reached the middle class, it was perfected in poorer, blacker neighborhoods, where mortgage salesmen would convince the elderly to refinance their homes usury rates. At one point in 2005, Bush even nominated one of the nation’s biggest predatory lenders, Ameriquest’s Roland Arnall, as ambassador to the Netherlands. That same day, Ameriquest announced it was setting aside $325 million to settle predatory investigations in 30 states. So much for rewarding the villain. But now that Republicans have presumably seen the error of their ways, can we get someone to call for a little consumer protection? Marsha Blackburn? Anyone?

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