According to Senator Chris Dodd (D-CT), our current financial crisis is a direct result of “toxic instruments” of the financial institutions who created problematic home mortgage loans, particularly sub-prime mortgages. I quote the Wall Street Journal:
Several high-ranking members of Congress also appeared on Sunday morning programs, as lawmakers rushed to bring on the far-reaching legislation to a vote next week.
“We need to give the secretary the authority to work,” Senate Banking Committee Chairman Christopher Dodd (D., Conn.) said on ABC’s This Week. “These are complex issues. I don’t think we ought to micromanage that part of it.”
Sen. Dodd expects strong interest from lawmakers in dealing with the Main Street aspects of the financial crisis.
“There are things we might do to try to help clean up a lot of these bad mortgages out there,” he said. “We need to try and address that without compromising the ability of the secretary to get rid of the toxic instruments that exist in these institutions.”
Dodd, in other words, believes our economy will recover if and only if we eradicate all the “toxic instruments that exist in these [financial] institutions.” One would hope Democrat Barack Obama would agree with Dodd, especially as Democrats are viewed by Americans as the Party most committed to addressing and ameliorating financial crises.
But Obama cannot confront this crisis in the manner Dodd desires, for his National Campaign Finance Chairperson, Penny Pritzker, is largely responsible for the creation and lending of the “toxic instruments” Chris Dodd decries as responsible for our current economic woes.
Beholden to Penny Pritzker as well as to Freddie Mac and Fannie Mae, Barack Obama is essentially one of those “toxic instruments” we must shed if we are to recover from the mortgage and sub-prime lending crisis.
Danny Schechter, Leftist media critic and author of Plunder: Investigating Our Economic Calamity and the ‘Sub Prime Scandal,’ offers a history of the sub prime mortgage. I quote one of the reviews of his magisterial text:
When it began, “subprime lending” wasn’t a term in common usage, let alone understood outside financial circles. One of its late 1990s originators was Obama campaign finance chairperson Penny Pritzker when she served on the Board of the failed family-owned Hinsdale, IL Superior Bank. It cost the FDIC $700 million and depositors another $65 million, while Pritzker made millions on predatory lending now called “subprime” mortgage schemes. One definition is as follows: “the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history.” Another in the recent environment was to force-feed them to the largest number of homebuying prospects possible.
According to the short history Schecter’s recounts, it is Penny Pritzker who invented the “toxic” financial instrument that has precipitated our current financial crisis. The doyenne of predatory lending, Penny Pritzker is just another Jim Johnson and Frank Raines: both the cause and the symptom of all that is wrong on Wall Street, Penny Pritzker and her position of power on the Obama campaign raises serious doubts about Obama’s ability to reform the institutions responsible for our current economic doldrums.
Pritzker’s involvement in this crisis is not limited to the invention of the sub prime mortgage instrument; she is also largely responsible for the current financial crash. I quote Dennis Bernstein, who cites Timothy Anderson, a finance expert who relentlessly pursued the late Republican Henry Hyde for the latter’s entanglements in the failure of Clyde Federal Saving & Loan:
Though Superior Bank collapsed years before the current sub-prime turmoil that is rocking the world’s financial markets – and pushing those millions of homeowners toward foreclosure – some banking experts say the Pritzkers and Superior hold a special place in the history of the sub-prime fiasco.
“The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages,” Timothy J. Anderson, a whistleblower on financial and bank fraud, told me in an interview.
“The sub-prime mortgages,” Anderson said, “were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits. Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.”
In other words, if you traced today’s sub-prime crisis back to its origins, you would come upon the role of the Pritzkers and Superior Bank of Chicago.
It all stems from the questionable practices of Penny Pritzker and the Superior Bank of Chicago. Prtizker, by the way, is a major bundler for the Obama campaign. Indeed, the scion of one of Chicago’s wealthiest families has raised between $200,000 and $500,000 for Barack Obama’s Presidential bid. Her family also donated over $40,000 to Obama’s 2004 Senate campaign. Now wonder why Obama is opposed to interest rate freezes and a moratorium on sub prime mortgages: most of his campaign cash is from those who have shamelessly profited from our current economic collapse.
Democrats are aware of this problem, and a few are not very pleased. One Democratic member of the House uttered the following when interviewed by a reporter for the conservative American Spectator on 8 Sept 2008:
“How can Obama go out with a straight face and saw it was Republicans who made this mess, when it is his key advisers who ran the agencies that made the big mess what it is?” says a Democrat House member who supported Sen. Hillary Rodham Clinton. “It’s his people who are responsible for what may well be the single largest government bailout in history. And every single one of them made millions off the collapse that are lining Obama’s campaign coffers. If the McCain campaign lets this one go, they deserve to lose.”
Hopefully the McCain campaign will not ignore this egregious conflict of interest of Barack Obama. And hopefully the Obama campaign will fire and denounce Penny Pritzker for creating the current economic crisis on Wall Street. But I doubt Obama will, for Obama is the recipient of cash from many who are the beneficiaries of the sub prime mortgage scandal: he accepted $1,180,103 from the top issuers of subprime loans during the primaries. And here are the names of a few of Obama’s bundlers who earn their profits in the unscrupulous sub prime loaning industry:
Louis Susman, Michael Froman and J. Michael Schell of Citigroup; Steve Koch of Credit Suisse; Bruce Hayman, David Heller, Eric Schwartz, and Todd Williams of Goldman Sachs; Mark Gilbert, Christine Forester, John Rhea, Nadja Fidelia, and Theodore Janulis of Lehman; and Robert Wolf of UBS Americas.
Beholden to the interests responsible for creating the sub prime mortgage crisis that has rippled across our country and across the world, Obama cannot eliminate those who created the “toxic instruments” Democrat Chris Dodd decries, for he is too dependent on their largesse.
Will Obama return the donations and bundled cash he received from the subprime industry? Will he fire and denounce Penny Pritzker? Or will he simply ignore his complicity with the unscrupulous sub prime mortgage industry and simply give us more “okie doke,” “bamboozling” and “hoodwinking?” Even if he does denounce the industry that has financially sustained his campaign, it will be too little, too late: the economy has already collapsed; the foreclosure crisis has already destroyed communities; and families are on the streets.
Barack “Sub Prime” Obama: unable to reform the industries responsible for our current economic crisis, he is anything but ready for prime time. Indeed, Obama is and will remain “sub prime.”
See also Uppity Woman’s 16 SEPT 2008 essay entitled “Obama’s Finance Chair, Failed Bank Owner Penny Pritzker And Today’s Wall Street Problem.”