Rantt Media
Published in

Rantt Media

Trump Admin Is Filled With Financial Predators Who Profited From The Recession

Jackals to Oversee the Wolves

Treasury Secretary Steven Mnuchin listens at right as President Donald Trump speaks during a meeting on the Federal budget — Feb. 22, 2017 (AP/Evan Vucci)

In the aftermath of the 2008 economic meltdown, most of America reeled at the news of people being evicted from their homes from massive foreclosures; and were alarmed at the swelling tent cities that surrounded many a major metropolis like the shantytowns of the poorest of developing nations.

Yet one group saw only opportunity.

It is an unscrupulous mentality that can make money off the backs of the poor. Perhaps, they are like scavengers enjoying what normal animals would reject. Apparently, they can sleep happily enjoying that wealth, undisturbed by the fact it was made from the suffering of others.

The relevant question is: What happened to all the houses covered by the subprime mortgages after 2008?

SIGN THIS PETITION AND DEMAND TRUMP STOP HIS EFFORTS TO REPEAL DODD-FRANK

The NHA (the National Housing Association) had bought many of those mortgages to prevent the investors from suffering any loss. How important is it to have the right person in the positions to decide financial policy implementation? We will get a good lesson in this by the choices for what happened to the houses.

Recall that even though these mortgages were largely a result of predatory lending, the borrowers had been able to make the mortgage payments for two years — until the higher rates kicked in. Fans of The Big Short will recall that the four money manager anti-heroes could predict not only that the housing market was going to tank, but exactly on the day because that was the day on which the higher rates kicked in.

As the NHA owned the mortgages, the Fed (the Federal Reserve Bank) could have gone to the aid of homeowners. It could have recommended reinstating the mortgages without penalty and told the borrowers they could continue at the lower rates of say about 5% and, where possible, extend the amortization period to lower the monthly installments.

The Fed had to lower the prime rates anyway (to 3 % currently 4.5%) for the rest of us. But instead, led by the then chair, Ben Bernanke, the Fed recommended a sale of all the mortgages to Wall Street private equity firms. That choice shows very twisted values; it demonstrates that too much wealth can detach you from your humanity.

However, if you are an elitist, Bernanke’s choice makes perfect sense. The private equity firms saw the opportunity to evict the homeowners and become the largest landlords of single family rental homes in the country — which they have indeed become.

Source: MarketWatch

Now that Wall Street is in control of a large segment of the single-family home rental accommodation, they are acting exactly as you might expect. As predatory landlords on an eviction spree. The Atlanta Fed sounded the alarm this past April indicating ruthless eviction policies in comparison to smaller landlords (would you really expect anything else from Wall Street?). Colony Starboard Capital was the leader in evictions.

First, a legal geek point is necessary to understand why the tenants’ position is so vulnerable. The law states that a tenant cannot withhold rent even though the landlord does not do necessary serious repairs nor provide necessary services — not even adequate heat in the winter. That law is against any reasonable person’s sense of justice, but it is ruthlessly applied by judges.

What happens is that, for example, whenever a landlord refuses to fix plumbing so that the tenant doesn’t have any hot water for over three months in the winter, the tenant may withhold rent believing it can force the landlord to do the repair.

Aggressive landlords simply get an eviction order based on the nonpayment of rent after the first month. When the bailiff shows up at the tenant’s door with three or four staff, who are usually burly ex-cops, who make Dog the Bounty Hunter look preppy, threaten to remove the entire family, that tenant knows it has to pay up — not only the rent arrears, but interest, and all the court costs including for the bailiff and his staff.

That is why there are so many eviction orders obtained so quickly. It doesn’t mean that the tenants are actually thrown out, it only indicates that the tenants are being disciplined — as hawkish landlords like to put it.

There is an easy fix. Aggrieved tenants could be allowed to pay their rent into court, so that when a landlord tries to evict them for withholding rent because of non-repair, the judge could decide if the landlord was in default and order the landlord to make the repair before releasing the funds — and order costs against the landlord to compensate the tenant for time and taking a day off work.

The landlord would be completely protected. Ethical landlords would have nothing to fear.

Trump Assembles the Jackals

In an interview in April of this year by the Associated Press, Trump was asked if his previous experience as a real estate magnate was in conflict with his role as president. He volunteered a remarkable insight into his personal values: “Well in business, you don’t necessarily need heart,” he said. “In fact, in business, you’re actually better off without it.”

True to his principles, Trump has gone about putting men who have proven heartlessness in evicting homeowners and tenants in charge of government departments that influence the policy of housing matters.

The above-mentioned Colony Starboard Capital was quick to see the glint of gold amongst the suffering. It is the third largest of the Wall Street private equity firms that got houses on the cheap through the Bernanke scheme and became the third-largest landlord of single dwelling homes in America.

Trump chose Colony’s CEO, Thomas Barrack, as his campaign advisor.

But choosing men who had lived up to Trump’s heartless requirement for success in business didn’t end there. It was only the start.

The Pack Gets A Leader

The Treasury Department is unquestionably the most important government department not only for setting policy over Wall Street, but the policy of who gets to own a home and who gets to rent.

The Treasury Department has that outsized influence because most politicians don’t know any more about the inner workings of the financial service industry than the average citizen. How could they? It’s never taught in any university or college course. So, politicians are dependent on advice they get from Treasury.

Here’s a recent example: It is Treasury that has produced the policy papers which were the basis for the repeal of carefully selected sections of Dodd Frank through the recent Financial CHOICE Act.

One West, another equity fund, bought Indy-Mac (Independent National Mortgage Corporation — not a government agency) for its inventory of mortgages in default, quickly evicted the homeowners and rented out the houses.

It went into such a vigorous foreclosure mode that one of its staff testified before a Senate hearing that she had no time to read the court documents and had to reduce her signature to a single initial to keep up with the necessary signing. Joe Nocera, writing in Bloomberg, said it’s undeniable that One West ran one of the most aggressive foreclosure machines in the country during the time Steve Mnuchin was its CEO.

Steve Mnuchin, as lead overseer of those efficient evictions, certainly qualified for Trump’s criterion as heartless in business. Trump rewarded Mnuchin’s proven prowess at making money on the vulnerable with the top position in Treasury.

In June, Trump appointed Mnuchins’ former right-hand man at One West, Brian Brooks, to be his present right-hand man at Treasury.

The Office of the Comptroller of Currency

This may be a little known but very important office within Treasury. Its title/name does little to explain the crucial role it plays as supervisor of commercial banks and thrift institutions. (The SEC supervises investment banks). The OCC is called a prudential regulator as its main function is to enact policies that ensure the soundness of commercial banks. (In 2008, they were not very sound!) The OCC also investigates misconduct by commercial banks and their executives.

Last week Trump appointed another of Mnuchin’s sidekicks at One West, Joseph Otting, to be Comptroller of Currency.

The Deep State of Financiers

However, Trump cannot be criticized alone for appointing banker alumni to positions of power in government departments that influence Wall Street. Charts showing just how many Goldman Sachs alumni hold senior positions in Treasury are widely circulated. Those charts are only of the Goldman guys. Both Democrat and Republican presidents have routinely appointed ex- Streeters. Other banks have also got their own men in high places.

The chart below shows only the recent Trump additions to what is rightly called Government Sachs.

Source: Office of Marcy Kaptur, Ohio’s 9th Congressional District

Both parties have accepted that the best people to advise about Wall Street are from the Street. That belief is the source of the problem. To the contrary, the best people to have positions of influence in government departments are those that have proved their independence from the Street and that their loyalty to their country is above their loyalty to their paycheck — and there are many, but they are never chosen.

Even the Obama administration fell prey to this myth of the need for Wall Street alumni in government. Michael Froman, then an executive at Citigroup, wrote an email to John Podesta, then counselor to Obama, on October 6, 2008, with the subject “Lists.” He attached three documents: a list of women for top administration jobs, a list of non-white candidates, and a sample outline of 31 cabinet-level positions and who would fill them.

It was, as bankers like to say, on the money. The bankers got most of their wishes fulfilled.

No review of Wall Street landlords now in positions of power in Washington would be complete without mention of Jared Kushner who has been a landlord of often decrepit low-income housing. A New York Times investigation disclosed the expected swift use of court proceedings against low-income tenants.

In response to the allegation of unnecessary aggressiveness, the Times investigation quotes the Kushner Companies’ chief financial officer, Jennifer McLean, as saying that the company has a “fiduciary obligation” to collect as much revenue as possible. Pro Publica investigator, Alec MacGillis added: “One way to make sure that tenants are paying their rent and to keep them from breaking leases early … is to instill a sense of fear about violating a lease.”

One of Trump’s budget cuts eliminated funding for the Legal Service Corporation, which represents poor tenants fighting to stay in their homes.

Prediction (no crystal ball needed): In the coming days of the jackals: housing prices will rise. Bankers will successfully continue their false propaganda that helping low-income people caused the 2008 financial crisis. Attempts to help lower income people buy homes will be curtailed forcing them to rent. Demand for rental units will exceed supply justifying serious increases in rent. The working class will have no idea of how it’s happening. When they lose faith in Trump, a new demagogue will arise.

The jackals will run free with the wolves.

SIGN THIS PETITION AND DEMAND TRUMP STOP HIS EFFORTS TO REPEAL DODD-FRANK

Rantt Is Expanding — Join Us

First off, we’d like to start this by saying thank you! For being a loyal reader. For aiding in our mission to speak truth to power. And for making the choice to embark on this journey with us. These are turbulent times so your patriotic vigilance is appreciated and more needed than ever before.

Since we’ve launched in November, we’ve grown into a 14 person organization based in Washington, DC. We have a growing list of contributors and hundreds of thousands of brilliant and patriotic monthly readers like you. And now, we’re expanding. Rantt is ready to hire on a full-time Editor, launch our weekly podcast, build out our new website, expand our writing staff, and provide you with even more hard-hitting stories that get to the heart of issues you care about.

So, we’re launching on Patreon. We’d rather rely on the support of our readers than rely on coverage-corrupting advertising. You can help support our efforts by donating/subscribing and joining the community.

JOIN US

Stay in the know and subscribe to our newsletter by following us on Rantt

Follow us on Twitter: @RanttNews

Join us on Facebook: /RanttNews

­­­­

--

--

--

Speaking Truth To Power

Recommended from Medium

That Ain’t No Way To Treat A Lady: On Al Franken Resignation Speech

Let’s talk about this Impeachment thing real quick

Pollyanna?

Trump chooses to follow Ivanka, US media: Ivanka’s political ambition is the White House

Democrats Can Truly Be our own Worst Enemies at Times

After the Fight With Disney, Ron DeSantis Will See a Boost.

Introducing Token Ibis

The Answer to Authoritarianism That Polarises Lies in the Co-Creation of Our Political Culture.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Jan D Weir

Jan D Weir

Trial lawyer, has taught Business Law at the University of Toronto, Author, Critical Concepts Canadian Business Law @JanWeirLaw | http://jdweir.com

More from Medium

My Opinion About Today’s Big News (April 30)

High Gas Prices Are on Biden Not the Russians

For Russia, It’s All About the Benjamins

What Happens If China Launches Its Own Cryptocurrency