“It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”
This has become the standard right-wing lie, but it’s just a bit surprising to hear it coming from the lips of Mr. Enlightened Capitalist. In fact, as the Financial Crisis Inquiry Commission set up by Congress to review Wall Street’s latest and greatest debacle explained in its final report (pp. 97-98), those congressional mandates were so toothless that the banks never issued mortgages they wouldn’t have issued anyway. It was the greed of the real-estate industry, which financed and refinanced millions of mortgages under the absurd assumption that housing prices would escalate at 10%-20% a year for ever and ever that caused the boom and crash, and it was the further greed of Wall Street that turned a national boom and bust into a global disaster.*
In his gross and grotesque run for a third term as mayor of New York, Bloomberg spent $102 million of his own cash, but that was nothing compared to the cash he spent out of the pocket of New York City’s taxpayers. In 2006, he agreed to a new contract for the city’s 80,000 teachers, increasing the yearly cost of the average teacher to New York from $63,022 in 2002, before Bloomberg’s first term, to $110,551, which comes out to an increase of around $3.76 billion a year. Bloomberg’s “reforms” boosted pension costs to the city by 370 percent.† So that’s how you become a billionaire. Spend other people’s money.
Afterwords
Via Krugman, a more learned takedown of Bloomberg’s lies, by Mike Konczal.
*Yeah, I’m oversimplifying. So sue me!
†I’m taking this from Steven Brill’s Class Warfare. Since Steve doesn’t know how to adjust for inflation, the numbers are probably a bit, well, inflated, but not by much, because the comparison is only for a four-year time span and because inflation was pretty tame during those years.
