Gretchen Morgenson: From Outside or Inside, the Deck Looks Stacked
“The banks could manage only so many foreclosures at a time, and Treasury wanted to slow down the pace so the banks wouldn’t be overwhelmed. And this was where the new foreclosure program came in: It was just big enough to ‘foam the runway’ for them.” ~ Timothy Geithner
From Outside or Inside, the Deck Looks Stacked
“The game is rigged and the American people know that. They get it right down to their toes.”
That’s Elizabeth Warren talking, the former consumer advocate and law school professor and now a Democratic senator from Massachusetts. I interviewed her about her new memoir, “A Fighting Chance,” in which she discusses one of America’s biggest challenges: how to level the playing field so that Main Street doesn’t always come second to Wall Street.
Although the book recounts Ms. Warren’s childhood and formative years as a law professor, mother and dog lover, it also examines in considerable detail the government’s deeply inequitable response to the financial crisis of 2008.
Ms. Warren was on the scene for the aftermath of that mess, when she became the chairwoman of the Congressional Oversight Panel for the Troubled Asset Relief Program, which carried out one of the government’s major bailout deals. In her retelling, we watch as the banks that caused the crisis receive special treatment and costly rescues while troubled homeowners get little or nothing.
The Congressional Oversight Panel, she writes, “couldn’t change a system that seemed hellbent on protecting the big guys and leaving everyone else by the side of the road.” About President Obama, she writes, “The president chose his team, and when there was only so much time and so much money to go around, the president’s team chose Wall Street.”
“A Fighting Chance” is the latest in a line of books by participants in the government’s response to the financial crisis. Like “Bailout” by Neil Barofsky, former special inspector general of TARP, and “Bull by the Horns” by Sheila C. Bair, former chairwoman of the Federal Deposit Insurance Corporation, Ms. Warren’s book describes the troubling patterns and practices of high-level Washington.