Friday, December 21, 2012

Romney advisor sells out for $1.2K an hour to fraudulent bank

You will breathe a huge sigh of relief that Mitt Romney lost the election for president when you read this story by Rolling Stone's Matt Taibbi.

Romney's lackey economic advisor Glenn Hubbard was rumored to be the next Treasury secretary if Romney won the election. Hubbard is dean of Columbia University's business school and, it turns out, a high-paid hustler for a fraudulent bank.

Hubbard testified on behalf of Countrywide Financial, blamed for a big part of the financial crisis. Countrywide is a major mortgage lender that systematically made crappy loans and then offloaded them. The  housing market ultimately collapsed, foreclosures skyrocketed and taxpayers bailed out banks. The Huffington Post summarizes the fallout:
...the company has agreed to a litany of settlements since 2008, including a $600 million class-action settlement, an $108 million settlement with the Federal Trade Commission and the ousting of former CEO Angelo Mozilo, who paid $67.5 million in penalties to the Securities and Exchange Commission.
Hubbard was paid $1200 an hour (no, that's not a typo) to testify before a court that Countrywide's loans didn't fail because of fraud. Writes Taibbi:
He conducted an "analysis" that essentially concluded that Countrywide's loans weren't any worse than the loans produced by other mortgage originators, and that therefore the monstrous losses that investors in those loans suffered were due to other factors related to the economic crisis – and not caused by the serial misrepresentations and fraud in Countrywide's underwriting. 
In other words, the Dean of the Columbia University business school testified that the fact that Countrywide claimed to have conducted thorough due diligence when in fact it was pressuring underwriters to approve 60 to 70 mortgage applications a day and failing to verify any income levels or other key information (to say nothing of the outright falsification of such data, which also went on on a mass scale) – he testified that these issues were irrelevant.
Taibbi concludes:
...he's just yet another grasping jobholder who's been exposed as a paid mouthpiece in a court proceeding.
Note on the video above: It was credit derivatives that caused the financial crash in 2008 -- the crash for which working people are still paying.