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New York AG pursues bank accountability
Posted By Barry Ritholtz On October 26, 2011 @ 10:00 pm In Bailouts,Video | Comments Disabled
New York Attorney General Eric Schneiderman talks with Rachel Maddow  about new investigations aimed at holding banks accountable for destroying the American economy.
WOLF BLITZER, CNN ANCHOR: And I’ve seen a lot of weird campaign ads. This one ranks up there.
UNIDENTIFIED MALE: Herman Cain releases a new ad that features his chief of staff smoking a cigarette.
UNIDENTIFIED MALE: It’s an ad on Cain’s official YouTube page that’s causing a bit of a stir.
TAMRON HALL, MSNBC ANCHOR: This online campaign ad for Herman Cain is sparking controversy.
BLITZER: This is an official Herman Cain campaign ad.
MADDOW: Lots of politics chatter today about Herman Cain’s suddenly viral super weird web video ad-ish thing. The one starring his chief of staff, the head of Koch brothers funded group Americans for Prosperity in Wisconsin, talking about Mr. Cain apparently during a smoke break. Whether you think this is super weird on purpose or not, this super weird thing, the inexplicable smoke break ad, is having the desired effect, in the sense that everybody is talking about it in Mr. Cain’s candidacy because of it. And that kind of thing usually doesn’t happen with Democratic ads. Nobody really ever talks about Democratic ads. Not recently at least because generally speaking, Democratic ads are not that good. I’m sorry. Be mad at me. My e-mail is
DONALD TRUMP: If I — if I — if I –
MADDOW: That’s the punch line. But you know what? The Democrats have, despite that recent track record, actually just made a good ad, on a good issue. Check it out. Here’s this anti- Romney ad from the DNC on an issue that’s hard to get into in a 30-second ad, the housing crisis. But they did it and they did it well. This totally works.
NARRATOR: Almost half of Arizona homeowners under water. Foreclosures everywhere. And what’s Mitt Romney’s plan?
MITT: Don’t try and stop the foreclosure process. Let it run its course and hit the bottom.
NARRATOR: Let Arizonans hit the bottom?
ROMNEY: Don’t try and stop the foreclosure process. Let it run its course and hit the bottom.
NARRATOR: Mitt Romney’s message to Arizona: you’re on your own.
ROMENY: Let hit the bottom.
NARRATOR: The Democratic National Committee is responsible for the content of this ad.
MADDOW: They did it. That made sense. And it was 30 seconds. And that ad has the added bonus of not only being true and well done for once but it is an issue on which the Democrats are actually doing something right now.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.
MADDOW: President Obama in Las Vegas yesterday announcing a rules change at the federal level essentially to help allow people, allow more people to refinance their mortgages, to make them more affordable. A change he will make even without cooperation from Congress. But some way, way, way more aggressive action on mortgages, and specifically on holding Wall Street accountable for using mortgages to blow up our economy, is happening not at the federal level but at the state level where New York state’s progressive attorney general has thrown a wrench in the works of a planned settlement with big banks over their worst practices that led to the financial meltdown. Instead, pushing forward with a wide-ranging investigation into the big questions here, like what the banks did, what they knew, when they knew it and how criminally liable they might be for their actions. Joining us now is attorney general for the great state of New York, Eric Schneiderman. Mr. Attorney General, thank you for being here. I know you don’t do a lot of interviews about this.
ERIC SCHNEIDERMAN, ATTORNEY GENERAL OF NEW YORK: I’m glad to be here, Rachel.
MADDOW: The big picture issue of housing and the continuing reverberations of the fiscal crash of 2008, are the biggest economic issues facing the country. They’re also very obtuse partisan politics around these things. Do you think that Democrats have done well in responding to the mortgage crisis and misbehavior of the banks?
SCHNEIDERMAN: Well, I think we’ve done some things. I think the president’s move this week was a good step. I’m a prosecutor and I took office in January, and Beau Biden, who’s the attorney general of Delaware, and I, thought we really needed to dig in a little bit deeper. And we were doing an investigation into what caused the bubble and the crash in the housing market. And it’s really not all that obtuse. I mean, there are a lot of folks who are trying to rewrite history and paint it like it was a volcano or an earthquake and that now we can move on to the problem of paying too much to cops and teachers and firefighters. This was a manmade crisis. It was created by regulatory neglect and greed. I assure you, without telling you about secrets of our investigation, we have not found a trace of evidence that a cop, firefighter, teacher, or sanitation worker contributed to blowing up the American economy. So, we’re digging in and think we can do more. We think we’re going to be able to obtain real meaningful relief. There are 11 million whose homes are underwater not just in Arizona but all across the country. We think we have to hold accountable to people who caused this disaster. And just as important, as I say, we got to get this out in the open so they can’t rewrite history. I mean, Mr. Romney’s comments, we should just let things hit bottom — this is the same sort of deregulatory mania that they were dishing out in 2005 and 2006. That didn’t work so well for the economy.
MADDOW: Did this catastrophe happen because — as far as what you have been able to determine so far, because deregulation proceeded to a part — to a point where banks could act legally in a way that was nevertheless, dramatically, fiscally irresponsible or are we looking at a case of potential illegal behavior — behavior that was against the law despite the fact that they had been so deregulated?
SCHNEIDERMAN: Well, that’s why you have an investigation. There may well have been a combination of the two. There’s no question that they dismantled a lot of the safety mechanisms that have protected our markets for a long time. But, you know, we’re also looking at the conduct of individual institutions and individuals to see if there were misrepresentations made, to see if there was fraud committed, to see if criminal acts were also a part of this. And that’s what Beau and I are looking at and we’re determined to follow it through until we get the relief the homeowners need and hold accountable the people who caused this.
MADDOW: That issue of holding people accountable is a guttural instinct in American politics now because we know the fiscal crisis was a manmade crisis. We know that this was something that people did the wrong thing and thereby hurt the entire country. And the country is still paying but nobody paid for what they did. That is — that’s just a base raw feeling that’s driving “Occupy Wall Street” protests right now — but I think it’s also driving a lot of anger in the country, left, right and center. You and Beau Biden have jurisdictional opportunities here because of where institutions are incorporated that had a lot to do with these problems. Is there more that could be done at the federal level right now, starting now in 2011 that hasn’t been done? Are there demands that should be made both of the administration and the Congress in terms of ways they can hold Wall Street accountable?
SCHNEIDERMAN: Well, it’s challenging for the president because the Republicans in Congress have essentially openly declared they’ll do things that they know hurt the American people just to prevent him from getting a win. But as you say, we do have jurisdiction, because the mortgage-backed securities that brought down the country were all issued out of New York trust or Delaware trust. We’re pursuing it. And you’re absolutely right. A lot of folks look at “Occupy Wall Street” and the other occupations and think they’re fringe characters. I hear the same sense that we don’t have one set of rules for everyone anymore, that people are not held accountable for misconduct. From every average American you run into, anywhere else, in a community hall meeting, in a diner, all over New York state, I’m sure all over America– there is a sense that equal justice under law is no longer the rule for this country. And we got to get that back. I mean, as much as the economic damage is terrible, for Americans to lose the sense that this is a country where law governs and you’re not above the law and you’re not below the law — I mean, you know, the law applies to everyone. The sense of accountability is one of the key motivators for our investigation and there are other A.G.s who are coming our way. I think there are actually going to be quite a few investigations before this is over.
MADDOW: As New York state’s attorney general, am I right that your office is quite near the Lower Manhattan”Occupy Wall Street” encampment?
SCHNEIDERMAN: It is, right across the park.
MADDOW: When you — when you look — from what I hear you saying right now, my sense is when you look at the folks out there protesting every day, you have some sympathy for what they’re doing?
SCHNEIDERMAN: I, you know, I see them as part of a — they’re the tip of a much bigger iceberg. I spend a lot time traveling around the state. I have 13 regional offices. And I assure you that if anyone who thinks the American people have gotten over their anger at the bubble and the crash, over their sense of betrayal that the fundamental American idea of equal justice under law has, you know, really been let go by the wayside — they’re wrong. People are mad. People want — not because they’re hostile or vicious, they just want to know there’s one set of rules for everyone. I don’t hear that much different in most of the “Occupy Wall Street” folks from what I hear everywhere else in the state as I travel around.
MADDOW: New York State Attorney General Eric Schneiderman– thank you for taking the time to talk to us tonight. Again, I know you don’t do this often. I really appreciate it.
SCHNEIDERMAN: Thank you.
MADDOW: And I would just say that in terms of looking at accountability issues and Wall Street and where “Occupy Wall Street” goes and that feeling in the country– keep an eye on New York state Attorney General Eric Schneiderman and also Delaware Attorney General Beau Biden. Set Google alert on these guys. Just watch what they do. That’s all
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