Is The U.S. Becoming A Third World Nation?

The following is an excellent excerpt from the book “WITH LIBERTY AND JUSTICE FOR SOME: How the Law Is Used to Destroy Equality and Protect the Powerful” by Glenn Greenwald
from Chapter 3 on page 140 and I quote: “Even the administration’s claim that it had “yet to find anything fundamentally flawed” in the mortgage process was the by-product of a deliberate see-no-evil scheme of protection. Commentators, experts, and state officials had already assembled vast and growing amounts of evidence suggesting that the fraud was systematic and reckless, sometimes even deliberate. But by waiting for iron-clad proof before concluding that serious wrongdoing took place, the administration skewed the inquiry in advance to protect the banks from the rule of law.
The career Wall Street financial services expert Yves Smith, writing on her blog, gloomily reflected on the administration’s efforts:
“The effect of the official “don’t rattle the markets” posture is a refusal to dig too deeply, and the end result is to sanction fraud. Rewarding criminal behavior has never been the foundation of a well functioning capitalist society; indeed, Singapore was able to become an economic success against considerable odds by having a clean government and tough enforcement. But the powers that be seem determined to try this experiment, since they’d rather not rattle the power structure, no matter how rotten it might turn out to be.”
But even more remarkable than the Obama administration’s steadfast refusal to subject these banks to criminal proceedings is the fact that a mere month or so into the scandal, government officials began openly plotting how to vest the mortgage banks with retroactive immunity and thereby shield the industry from all liability, criminal and civil alike.
In November 2010, John Carney of CNBC reported that the lame-duck Congress “may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.” That system, known as MERS (Mortgage Electronic Registration Systems), administers mortgages on behalf of the largest banks. It was through MERS that the fraudulent foreclosure network at the heart of the scandal had been created. In the wake of reports that liability for MERS-related reckless foreclosures actions could run into the billions of dollars, Congress began planning—just as it did with telecoms two years earlier—to retroactively legitimize the fraudulent mortgages and immunize the industry. As Carney wrote:
“MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines. Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.
So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MER’s private database.”
Indeed, politicians had been looking to protect the mortgage industry even before the public and the media became aware of the existence of the scandal, let alone its breadth and depth. More than a month before Carney’s piece, and just before the election recess, Congress had passed a bill designed to make it significantly more difficult for homeowners to challenge banks that improperly approved a foreclosure. That bill, called the Interstate Recognition of Notarizations Act of 2010, would have substantially eased documentation requirements for banks planning to foreclose on people’s homes. Amazingly, the Senate passed this bill without debate of any kind—it did so by unanimous consent—even in the face of growing reports of foreclosures across the country being approved by so-called bank robo-signers, which were both illegal and inherently unreliable. Not until public anger over that bill had become widespread did the White House announce that President Obama would refuse to sign it, though White House aides signaled that he was receptive to the underlying goal of the bill’s sponsors and was open to approving a revised version. Those efforts are still pending.
So the banking industry perpetrates a huge fraud on the American public and its court system, stealing people’s homes in the process, and the first reaction of the Obama’s administration is to announce that it has no intention of criminally investigating the practice, while the first response of Congress is to draft legislation to retroactively legalize what was done and prevent any lawsuits against the bankers. There, in a nutshell, is proof of how completely unrevealed the rule of law in America has become.
In November 2010, as I was writing this chapter, the Nobel Prize-winning economist Joseph Stiglitz argued that the mortgage fraud crisis exemplifies what has happened in America to the concept of equality under the law:
“The mortgage debacle in the United States has raised deep questions about “the rule of law,” the universally accepted hallmark of an advanced, civilized society. The rule of law is supposed to protect the weak against the strong, and ensure that everyone is treated fairly. In America in the wake of the sub-prime mortgage crisis, it has done neither.
Part of the rule of law is security of property rights—if you owe money on your house, for example, the bank can’t simply take it away without following the prescribed legal process. But in recent weeks and months, Americans have seen several instances in which individuals have been dispossessed of their houses even when they have no debts. . . .
To some, all of this is reminiscent of what happened in Russia, where the rule of law—bankruptcy legislation in particular—was used as a legal mechanism to replace one group of owners with another. Courts were bought, documents forged, and the process went smoothly.
In America, the venality is at a higher level. It is not particular judges that are bought, but the laws themselves, through campaign contributions and lobbying, in what has come to be called “corruption, American-style.” . . .
In today’s America, the proud claim of “justice for all” is being replaced by the more modest claim of “justice for those who can afford it.” And the number of people who can afford it is rapidly diminishing.”
Surveying both the scandal itself and the eagerness of the political class to protect the wrongdoers, the Seton Hall law professor Frank Pasquale had a similar reaction:
“Is the US becoming a third world nation? . . . We as attorneys can at least insist on a common rule of law for all. And that’s what our legal system has grievously failed to provide during the foreclosure crisis. As the indisputably pro-market [corporate law professor] Jonathan Macey notes, “the banks have created significant legal exposure for themselves ‘by committing fraud upon the courts.’” And yet the first thing our Congress could think to do was to endorse legal cover for them, as eagerly as it retroactively immunized warrantless wiretapping. . . . If we continue to subordinate the rule of law to the whim of banks, what former IMF Chief Economist Simon Johnson described as the “quiet coup” will be complete.”
The reality, as we have seen, is that this ship sailed some time ago.
Stark Contrast With the Past – It has always been an undeniable fact of American political life that the wealthy and powerful enjoy substantial advantages, in the legal and political realms as elsewhere. But American history is replete with examples of elites being held accountable and even severely punished for political and financial crimes far less egregious, and far less destructive, than those that the nation has witnessed over the past decade. Examining some of those incidents highlights how much has changed. While it has always been the case that possessing large amounts of money and power is preferable to having little or none, the principle that all citizens are accountable under law was applied in the past with great force and determination. Throughout the eighteenth, nineteenth, and the early twentieth centuries, even the most influential men in America were kept in check by the legal system; and if the executive or Congress failed to do its part, an adversarial mass media served as a crucial backstop against elite lawlessness.
The prosecution of Tammany Hall and its infamous leader, William “Boss” Tweed, is a classic example of the media and elected officials combining to preserve the rule of law. The 1860s and 1870s were the peak years for Tammany Hall, the Democratic political machine that controlled New York City. As head of the machine, Boss Tweed oversaw a system of spectacular corruption. Tweed and his cronies wielded their control of city contracts to personally enrich themselves to the tune of tens of millions a year—the equivalent of billions in today’s dollars.
Most newspapers in New York were also held within Tweed’s grip. In his 1901 book The History of Tammany Hall, the historian Gustavus Myers describes the largesse the Tammany machine famously showered on the press:
“One paper at the Capital received, through his efforts, a legislative appropriation of $207,900 for one year’s printing, whereas $10,000 would have overpaid it for the service rendered. The proprietor of an Albany journal which was for many years the Republican organ of the State, made it a practice to submit to Tweed’s personal censorship the most violently abusive articles. On the payment of large sums, sometimes as much as $5,000, Tweed was permitted to make such alterations as he chose.”

(I QUOTE FROM PAGE 143: “IN NOVEMBER 2010, AS I WAS WRITING THIS CHAPTER, THE NOBEL PRIZE-WINNING ECONOMIST JOSEPH STIGLITZ ARGUED THAT THE MORTGAGE FRAUD CRISIS EXEMPLIES WHAT HAS HAPPENED IN AMERICA TO THE CONCEPT OF EQUALITY UNDER THE LAW:
“The mortgage debacle in the United States has raised deep questions about “the rule of law,” the universally accepted hallmark of an advanced, civilized society. The rule of law is supposed to protect the weak against the strong, and ensure that everyone is treated fairly. In America in the wake of the sub-prime mortgage crisis, it has done neither.
Part of the rule of law is security of property rights—if you owe money on your house, for example the bank can’t simply take it away without following the prescribed legal process. But in recent weeks and months, Americans have seen several instances in which individuals have been dispossessed of their houses even when they have no debts. . . .
To some, all of this is reminiscent of what happened in Russia, where the rule of law—bankruptcy legislation in particular—was used as a legal mechanism to replace one group of owners with another. Courts were bought, documents forged, and the process went smoothly.
In America, the venality is at a higher level. It is not particular judges that are bought, but the laws themselves, through campaign contributions and lobbying, in what has come to be called “corruption, American-style.”. . .
SURVEYING BOTH THE SCANDAL ITSELF AND THE EAGERNESS OF THE POLITICAL CLASS TO PROTECT THE WRONGDOERS, THE SETON HALL LAW PROFESSOR FRANK PASQUALE HAD A SIMILAR REACTION:
“Is the US becoming a third world nation? . . . We as attorneys can at least insist on a common rule of law for all. And that’s what our legal system has grievously failed to provide during the foreclosure crisis. As the indisputably pro-market [corporate law professor] Jonathan Macey notes,” the banks have created significant legal exposure for themselves ‘by committing fraud upon the courts.’” And yet the first thing our Congress could think to do was to endorse legal cover for them, as eagerly as it retroactively immunized the rule of law to the whim of banks, what former IMF Chief Economist Simon Johnson described as the “quiet coup” will be complete.”
THE COMMENT WAS MADE THAT WE’RE BECOMING A THIRD-WORLD NATION IS A COMMENT I’VE USED A NUMBER OF TIMES IN MY BLOG SITE RESPONSES TO A NUMBER OF ARTICLES. OUR LEGAL SYSTEM HAS SO VASTLY BECOME ALMOST NONEXISTENT THAT I’M WONDERING IF WE EVEN HAVE A LEGAL SYSTEM. WHERE ARE THE DAYS OF FRANKLIN ROOSEVELT AND THE PROGRESSIVES THAT HELPED HIM FORM HIS VIEWS? IF ALL THE THREE SEGMENTS IN OUR SYSTEM FAIL TO WORK TOGETHER, THEN THEY ALL BREAK DOWN AND WE TRULY DO HAVE THE BEST CORRUPT SYSTEM FOR THE 1 PERCENT THAT MONEY CAN BUY. THIS IS WHY WE MUST GET RID OF THE SOCIAL WELFARE GROUPS (501 © 3 and 501 © 4). OTHERWISE, DEMOCRACY WILL BREAKDOWN AND LEAD TO WORLDWIDE CIVIL WARS WHICH I BELIEVE YOU’RE SEEING IN SYRIA BUT THE MEDIA IS FAILING TO REALLY LOOK INTO WHAT THE REAL CAUSES ARE BECAUSE THEY CAN’T SEEM TO FIND EQUALITY EITHER.

LaVern Isely, Overtaxed Independent Middle Class Taxpayer & Public Citizen & AARP Members

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About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog (my.barackobama.com) and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
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