1%er Michael Bloomberg is no Warren Buffett

What I know about his honor the mayor of NY City, Michael Bloomberg could fill a urine sample cup but, based on what I read in the mainstream media, he has always given most of us the impression that though he sits among the wealthiest income earners in this country (world’s 23rd richest), he’s seldom seen as the plutocrat type.

There of course is that glaring exception when he wanted to charge homeless people rent while staying at the city’s shelters, which, some would argue, had some merit.  Deputy Mayor Linda Gibbs stated in a NY Daily news article that “the goal here is to give homeless families a sense of ownership over their space in the homeless shelter; charging them rent will make them feel like it’s theirs.”  The rates seem reasonable for those families making over $10,000 a year.  They would be charged less than 0.5% of their gross income while a family making over $25,000 annually would pay closer to 4%.  But one could quibble over whether this creates a sense of ownership or a sense of guilt, with a measure of shame.

We can all acknowledge though that the mayor has a duty to all citizens and Bloomberg’s actions here seem humane compared to his predecessor’s, Rudy Giuliani, who wanted to have homeless people arrested back in 1999 because their presence on the streets was seen as unconstitutional.

”Streets do not exist in civilized societies for the purpose of people sleeping there,” the mayor said yesterday during his weekly radio call-in show. ”Bedrooms are for sleeping.” He added that the right to sleep on the streets ”doesn’t exist anywhere. The founding fathers never put that in the Constitution.”  SOURCE

It is this 18th century aristocratic attitude towards people who dwell within and on the threshold of poverty in this country by the likes of many conservatives of wealthy means that generates the fire in those people who have come to represent OccupyWallStreet (OWS).  It is a failure of the 1%ers to empathize with the people of modest means who were targets for Wall Street predators during the housing mortgage scheme that ultimately put many people out of their homes and onto the streets.

I never felt that Bloomberg was one of us but I felt he was at least honest within the ranks of the Republican establishment; those who were quick to condemn the protesters at Zuccotti Park in the Wall Street district and the grass roots movement that sprang from it in urban areas and small town settings across the country.  His recent comments however when asked on what he thought about the OWS protesters while attending a 40th anniversary breakfast for the Association for a Better New York, an organization of New York City businesses, laid this feeling to rest.

“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have gotten them without that.

“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and congress certainly isn’t going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for.”  SOURCE

Image shattered.  Smarter than the average anti-government type he’s not.  All of these right-wing talking points have been thoroughly debunked and only the seriously delusional continue to use them and believe them.  So why would Bloomberg throw in with this lot and make a fool of himself?

On the Senate floor in May of 2010 Senate minority leader Mitch McConnell referred to Fannie Mae and Freddie Mac as “the main protagonists in the financial meltdown.”  He called the attempts at financial reform then “worse than irresponsible; it’s the legislative equivalent of wrongful conviction.”  Who would have thought then that Michael Bloomberg would come across as the water boy for these same lame beliefs.

For any who are willing to support this myth there is a standing challenge out there by Barry Ritholtz, a financial expert and wildly popular blogger, who has offered $100,000 to anyone who can prove that Fannie and Freddie are the “main protagonists in the financial meltdown”.

Andy Kroll’s report on this last year in Mother Jones lays out the details of Ritholtz’s analysis.

  • The origination of subprime loans came primarily from non-bank lenders not covered by the [Community Reinvestment Act, a law pushing the two GSEs to purchase more loans in the secondary markets and thus expand access to housing loans to low-income neighborhoods];
  • The majority of the underwriting, at least for the first few years of the boom, were by these same non-bank lenders;
  • When the big banks began chasing subprime, it was due to the profit motive, not any mandate from the President (a Republican) or the Congress (Republican controlled) or the GSEs they oversaw;
  • Prior to 2005, nearly all of these sub-prime loans were bought by Wall Street—NOT Fannie & Freddie;
  • In fact, prior to 2005, the GSEs were not permitted to purchase non-conforming mortgages;
  • The change in FNM/FRE conforming mortgage purchases in 2005 was not due to any legislation or marching orders from the President (a Republican) or the the Congress (Republican controlled). It was the profit motive that led them to this action.       SOURCE 

In the previous year a McClatchy news story by David Goldstein and Kevin G. Hall revealed “that the charges [against Fannie and Freddie] aren’t true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis”.

Federal Reserve Board data show that:

  • More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
  • Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
  • Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.

The “turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007,” the President’s   SOURCE

Notice that date when a dramatic weakening of underwriting standards for U.S. subprime mortgages began.  This factor too is overlooked by Bloomberg and his new found friends on the Right.  All of this occurred during those years when the neo-conservative mindset prevailed in the White House and the Congress which were under GOP control.  If, as they claim this all originated during the Clinton years, there is no evidence of life in the committees and subcommittees of these two Houses at the time that showed any concern for what was going on in our financial capital.

Though there are still those within the 1% of America’s wealthiest who seem to understand the legitimate concerns of OWG protestors, there also remains many like Bloomberg who can’t quite seem to grasp why anyone would find fault with how businesses, especially large financial institutions in America, do business.  Those men and women who occupy Zuccotti Park in New York, Oscar Grant Plaza in Oakland and other similar domains around the country have astutely watched the Tea Party and concluded that their focus was misdirected.  The initial grass-roots success of the Tea party came from legitimate Libertarian political interests but they ultimately allowed themselves to be co-opted by moneyed interests to lay blame at the feet of public officials whose efforts benefitted the  “general welfare” or were trying to correct the abuses that allowed the private financial sector to run wild.

There’s something wrong with free markets when many who have made it a part of their life began to question the direction some are taking in it.  Esther Dyson, who holds a degree in Economics, is a former securities analyst and reporter for Forbes magazine says “I became a real free market fanatic. I’m probably less so now than even two or three years ago.”  In a 1996 interview she expresses her faith in free markets, calling them “moral systems” but then quantified that by saying not everybody in it is moral”.  This is the component of OWS movements that seek to change this flaw in what Dyson feels is a moral system.  Dyson would agree with their intended efforts I believe.  “People want things better” she said.   Change means that what was before wasn’t perfect.”

So when Bloomberg and people like him use the worn out Reagan idea that “government is not the solution to our problem, government is the problem”, they ignore the good that government has done and can still do when those who represent the people are responsive to all of their constituents and not just those who can afford to pay $10,000 dollar-a-plate fundraisers or promise to bring jobs to a community needing the human resources which that community has to offer.  Capitalism and democracy work best when there is shared responsibility between them.  Exploitation by one over the other will take both of them down.

Inspiration for this article is gratefully attributed to digby over at the Hullabaloo blog  


Matt Taibbi’s “Mike Bloomberg’s Marie Antoinette Moment”


10 responses to “1%er Michael Bloomberg is no Warren Buffett

  1. Not at all Dr. Chuq. Be my guest.

    BTW, I realized that I have been missing your daily post. It appears somehow I got “unfollowed” from your site so I have corrected that today.

  2. Thanx Larry….and I was wondering what had happened……glad you are back always a pleasure…..your post will be in tomorrow;s edition….I have a morning and an evening….not sure which one but tomorrow for sure and thank you……

  3. Bloomberg has a lot invested in Wall St. so of course he’ll take their side. He’s a sellout who’s gotten a taste for the life of a career politician and so wants to be one himself now. He’ll do and say anything, just like Mitt Romney. It’s all narrative.

  4. I was under the same misapprehension about the FMs. I know I read it somewhere that they began the entire crisis by being allowed by Greenspan and others to get into that market. And then others, not wanting to be left out, followed. I wish I had the reference still. Anyway, excellent post. I am so thoroughly sick of the ties that Wall Street has to our elected officials.

    • I would really be interested in seeing that reference blaming the FMs and what connection Greenspan had with it Jean. I hope you find it.

      I’m sure Greenspan was involved on the side of how it would benefit private financiers but part of Clinton’s reason for making it easier for low income families to buy homes was because he thought they should have that opportunity.

      I don’t think anyone up front thought that mortgages would be financed without some credits checks or a least a viable source of income. This is where the greedy, predatory people got imaginative, and not within the FM’s.

      The FM’s are at fault for not paying closer attention to the trash they were buying from private institutions and shutting it down before it got to the level it did.

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