Black and white and barely read at all By Muhammad Cohen March 2008 Last week, Senator Barack Obama gave the most important speech on race in America since Martin Luther King shared his dream 45 years ago. But instead of focusing on Obama's thoughtful words, Americans seem more intent on the sayings of the preacher Obama denounced. In speaking fundamental truths about black and white under the stars and stripes, Obama's speech challenged Americans to prove we want intelligent debate on key issues. So far, America is failing that test as badly as it has so many racial trials, preferring simple sound bites that reduce a vivid, vibrant society to a different kind of black and white. The preference demonstrates how badly the political debate in the US has regressed, and how, as Obama eloquently noted, progress on racial issues has stagnated. In his speech, Obama "condemned, in unequivocal terms" the sermons of Reverend Jeremiah Wright, his former pastor. Wright's top sound bites include a hearty "God damn America" for its white racism and "for killing innocent people", and suggesting the September 11, 2001, attacks represented "America's chickens coming home to roost". Those remarks have become bludgeons against Obama's campaign for the Democratic presidential nomination. Playing the granny card but the Illinois senator also said of Wright, who baptized his daughters, "I can no more disown him than I can my white grandmother - a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe." Wright has retired as a pastor and is not a candidate for president, yet his angry outbursts are still being aired far more than Obama's nuanced perspective on race as the child of an African father and a white mother who once lived in a country with the world's most Muslims (Indonesia). In the speech, Obama acknowledged resentments on both sides of the racial divide, and urged Americans to move beyond them to create the more perfect union the US's founding fathers envisioned. "We cannot solve the challenges of our time unless we solve them together," Obama said, "unless we perfect our union by understanding that we may have different stories, but we hold common hopes - that we may not look the same and we may not have come from the same place, but we all want to move in the same direction." KISS - keep it simple, candidates Unfortunately, now more than ever, America prefers the simple to the thoughtful. Former president Ronald Reagan greatly advanced this ancient school of politics. Recall his simple question in 1980: Are you better off now then you were four years ago? In 1984, he didn't even tax your brain for an answer, presenting the saccharine image of "morning in America". After the complexities of Watergate, the Arab oil embargo, the fall of Saigon in Vietnam, the Soviet invasion of Afghanistan, and the subsequent Olympic boycott, America was ready for Reagan's simple answers. Now, after eight years of Reagan's political heir George W Bush and his simple but wrong answers leaving a legacy of crises at home and abroad, you'd think America would be ready to elevate the degree of difficulty. Reactions to Obama's speech indicate otherwise. Rather than considering the points he makes about race relations - or, yikes, reading the speech - reactions center around whether the Illinois senator sufficiently distanced himself from Wright. It might be that Americans can't handle complexities. Don't underestimate the capacity of voters to confuse and misunderstand. A poll last week showed most Americans oppose Republican nominee-in-waiting John McCain's policy prescriptions for Iraq, yet they say he'd do the best job on the issue as president. But the reaction to Obama and his speech goes beyond seeking simple answers. It's about avoiding the honest racial introspection he's asking us to undertake. Despite Obama's urging to the contrary, Americans would indeed prefer "to simplify and stereotype and amplify the negative to the point that it distorts reality". Make no mistake, race is a key factor in reactions to and the coverage of Obama's speech. Parsley chopped liver? MoveOn.com, the progressive Democratic group, notes the disparity between attention to Wright's remarks and scrutiny of comments by a pair of white preachers endorsing McCain. According to MoveOn, Pastor John Hagee says Hurricane Katrina was divine punishment for homosexuality, Jews are to blame for anti-Semitism, and Catholicism is the "Whore of Babylon" and "a cult". Yet McCain hasn't disavowed Hagee's support; he remains "honored" and "proud" of it. Last month, televangelist Rick Parsley endorsed McCain. In return, MoveOn said, the Arizona senator called Parsley his "spiritual guide". McCain hasn't disavowed Parsley's call for holy war: I do not believe our country can truly fulfill its divine purpose until we understand our historical conflict with Islam. I know that this statement sounds extreme, but I do not shrink from its implications. The fact is that America was founded, in part, with the intention of seeing this false religion destroyed ... Tell me, Reverend Parsley, was it Colin Powell who stopped George Washington at Yorktown, rather than letting him continue to Mecca? Republican pollster Kellyanne Conway found a clever way to combine the lowered tone of political discourse with racism. A couple of weeks ago, when Hillary Clinton suggested Obama would be a good vice president on her ticket, Conway told talk show host Larry King that McCain could get on with his general election campaign while the Democrats "debate whether she should let him ride in the back of her campaign bus", a reference to the racial discrimination laws of the American south of a half-century ago. Conway did not respond to a request to clarify what she called a "metaphor", so I'll say that this white woman found a way to inject racism into a situation that had none and attribute it to someone else. Whenever I see minority supporters of Republicans, I always wonder how they can stomach association with a party that, at least since days of president Richard Nixon's southern strategy, has been so quick to play the race card. Even Poppy Bush, who I'll wager never uttered the N-word in his life, gave us Clarence Thomas on the Supreme Court and the Willie Horton ad showing black men leaving jail through Michael Dukakis' revolving door. 'Show me the racism!' I was shocked that Conway's comment on CNN didn't provoke outrage, but I admit I don't get the state of race relations in the US. You lost me with the Don Imus disgrace of just about a year ago. I couldn't understand how anyone could defend a radio host who called the Rutgers University women's basketball team "nappy headed hos". Yet a lot of white people I once respected defended Imus, and not on narrow free speech terms where I'd be compelled to concede they had a point. They contended that latest slur in Imus' racist chain wasn't that big a deal, certainly not something that should cost a white millionaire his job. Somehow, I doubt that if Imus had called any of his advocates' sisters, partners or daughters "lard-butt honky streetwalkers" or tagged the Yeshiva University basketball team (either gender) "hooknose Hebe shylocks" that he would have attracted a similarly rigorous defense. Imus eventually got a richly deserved pink slip, but he's already found a new home on the national airwaves. Backlash against political correctness has apparently promoted white racism to a sign of rugged individualism and original thinking from its former status as a relic of America's shameful past. It's ironic that, at a time when America has more racially diversity and mixing more than ever before, racism is making a comeback. Whites think the race problem got solved back in the 1960s. Now we've got affirmative action and a national King Day (although some may confuse it with celebrating Elvis Presley's birthday) and a black guy running for president, so America must have buried its racist past, and we don't need to talk about race anymore. Or more accurately, we don't need to listen about it. Especially now that everyone has a cousin in an interracial marriage and a multiracial workplace, Americans all believe they're experts on race relations with nothing left to learn. (By age 12, most people feel the same way about sex.) Given their cheerful coexistence with other races, they couldn't possibly be bigots. With that inoculation against prejudice, Americans feel they've earned a pass to say anything they want about race. When they use this liberty to express themselves, a lot more Americans seem to favor the easy racial anger and divisiveness of Wright to Obama's more difficult prescription of understanding and reconciliation. That could spell real trouble for the one who is running for president. Former broadcast news producer Muhammad Cohen told America’s story to the world as a US diplomat and is author of Hong Kong On Air (www.hongkongonair.com), a novel set during the 1997 handover about television news, love, betrayal, high finance and cheap lingerie. (Copyright 2008 Asia Times Online Ltd. All rights reserved.)

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Spitzer Was Silenced: Elliot's Mess And The $200 Million Bailout

By Greg Palast
 
While New York Governor Eliot Spitzer was paying an 'escort' $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bush's man Bernanke was using ours.

This week, Bernanke's Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers' bordello: Eliot Spitzer.

Who are they kidding? Spitzer's lynching and the bankers' enriching are intimately tied.

HOW? FOLLOW THE MONEY.

The press has swallowed Wall Street's line that millions of US families are about to lose their homes because they bought homes they couldn't afford or took loans too big for their wallets. Ba-LON-ey. That's blaming the victim.

Here's what happened. Since the Bush regime came to power, a new species of loan became the norm, the 'sub-prime' mortgage and it's variants including loans with teeny 'introductory' interest rates. From out of nowhere, a company called 'Countrywide' became America's top mortgage lender, accounting for one in five home loans, a large chuck of these 'sub-prime's.

Here's how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain't worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the 'discount' they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. Grinnings move into their Toyota.

Now, what kind of American is 'sub-prime'. Guess. No peeking. Here's a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren't 'stupid',  they had no choice. They were 'steered' as it's called in the mortgage sharking business.

"Steering," sub-prime loans with usurious kickers, fake inducements to over-borrow, called 'fraudulent conveyance' or 'predatory lending' under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.

But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy "it was OK now to steer'm, fake'm, charge'm and take'm."

BUT THERE WAS THIS ANNOYING PARTY-POOPER.

The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.

Instead of regulating the banks that had run amok, Bush's regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of 'federal pre-emption', Bush-bots ordered the states to NOT enforce their consumer protection laws.

Indeed, the feds actually filed a lawsuit to block Spitzer's investigation of ugly racial mortgage steering. Bush's banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.

Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup's Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called 'securitization.'

What that means is that they took a bunch of junk mortgages, like the Grinnings, loans about to go down the toilet and re-packaged them into 'tranches' of bonds which were stamped 'AAA' - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).

When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide's top man, Angelo Mozilo, will 'earn' a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars he pulled in from 1998 through 2007.

BUT THERE WERE RUMBLINGS THAT THE PARTY WOULD SOON BE OVER.

Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide's stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That's Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the 'public treasure' and got to keep the Grinning's house. There was no 'quid' of a foreclosure moratorium for the 'pro quo' of public bail-out. Not one family was 'saved,' but not one banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo's Countrywide stock rose 17% in one day. The Citi sheiks saw their company's stock rise $10 billion in an afternoon.

And that very same day the bail-out was decided - what a coinkydink! - the man called "The Sheriff of Wall Street" was cuffed.

SPITZER WAS SILENCED.

Do I believe the banks called Justice and said "Take him down today!" Naw, that's not how the system works. But the big players knew that unless Spitzer was taken out, he would create enough ruckus to spoil the party. Headlines in the financial press, one was 'Wall Street Declares War on Spitzer' - made clear to Bush's enforcers at Justice who their number one target should be. And it wasn't Bin Laden.

It was the night of February 13 when Spitzer made the bone-headed choice to order take-out in his Washington Hotel room. He had just finished signing these words for the Washington Post about predatory loans:

'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 he federal government was turning a blind eye.'

Bush, said Spitzer right in the headline:  'was the 'Predator Lenders' Partner in Crime.' The President, said Spitzer, was a fugitive from justice. And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.

Spitzer wrote: When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably."

FALLEN ON HIS OWN GUN

But now, the Administration can rest assured that this love story - of Bush and his bankers - will not be told by history at all ''now that the Sheriff of Wall Street has fallen on his own gun.''

A note on 'Prosecutorial Indiscretion.'

Back in the day when I was an investigator of racketeers for government, the federal prosecutor I was assisting was deciding whether to launch a case based on his negotiations for airtime with 60 Minutes. I'm not allowed to tell you the prosecutor's name, but I want to mention he was recently seen shouting: "Florida is Rudi country! Florida is Rudi country!"

Not all crimes lead to federal bust or even public exposure. It's up to something called 'prosecutorial discretion.'

Funny thing, this "discretion." For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.

Naming and shaming and ruining Spitzer - rarely done in these cases - was made at the 'discretion' of Bush's Justice Department.

Or maybe we should say, 'indiscretion.'

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www.GregPalast.com
Greg Palast, former investigator of financial fraud, is the author of the New York Times bestsellers Armed Madhouse and The Best Democracy Money Can Buy