Lending Orgy Led Bush Justice to Ruin Spitzer

"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."

- Greg Palast ["Eliot's Mess", Greg Palast.com]

Greg Palast ruminates on the possible reasons for the Bush Justice Department using their 'discretion' to ruin NYS Governor Spitzer (with Spitzer's help, of course). Destroying a man's career in this manner is rarely done. So why, you may ask, was it done to Spitzer? Palast highly suspects there were reasons for defending the corrupt practice of lending that's been taking place on Wall Street and protecting the economic policy espoused by Bushites and all who agree with them. It's the type of economic policy that hides all kinds of built-in moral hazards. Reassuring that the sharks of Wall Street can keep partying while we taxpaying suckers and the Fed cover the losses and while hard-working African-Americans continue to be lumped together as just another group of high-risk mortgagees...I guess that kind of thing was more important to Bush and his Justice Department than having a politically ethical and emboldened Governor out here willing to take just about any risk to expose corruption but, unfortunately, couldn't keep his pants zipped up when he left his house.

Bush Justice smoked Spitzer out before he could smoke BushCo out of the swamp and bring them to justice. When Bush Justice yelled "Draw!" in this proverbial duel, Spitzer pulled out the wrong gun. But we're not so dumb to be lulled into the false belief that it's actually good for the public that a tough, persistent, risk-taking fighter against corruption is stepping away .... impotent.

.....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.”

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.

Related:

The Face-Slap Theory by Paul Krugman [NYTimes]

Betting the Bank by Paul Krugman [NYTimes]

Fed Pledges to Supply Cash by Martin Crutsinger [WSJ]

Ben Bernanke: Socialist by bonddad [Daily Kos]