Banks, Not Tyra

Columbia Journalism Review http://www.cjr.org/the_audit/center_for_public_integrity_pu.php Economic Crisis, The Audit — May 07, 2009 04:02 PM Center for Public Integrity Puts the Subprime Puzzle Together By Ryan Chittum ...There is something of a myth surrounding the current economic crisis, how it unfolded, and the precise role of the world’s largest financial institutions in the global meltdown. That myth suggests these banks and investment houses were somehow surprised “victims” of unscrupulous subprime mortgage lenders, and that they could not have anticipated the damaging toxic assets that have so infected their balance sheets. What’s missing from this story is the fact that this was a self-inflicted wound for which the rest of us are picking up a massive tab. The largest American and European banks and investment houses were not the unwitting “victims” of an unforeseen financial collapse, as they have so often been portrayed. The mega-banks not only invested in subprime lending institutions — they were the enablers, bankrollers, and instigators driving high-interest lending, and they did so because it was so lucrative and unregulated. Worse, in many instances these are the same financial institutions the government is now bailing out with tax revenues. Our oppressors and destroyers are being paid by our government; the same people who created this nightmare are being rewarded, and will remain in power. The outcome is obvious. As brilliant as Obama is, he does not understand that it is not history as usual: a great dividing line has been crossed, and we cannot go back.