Tuesday, November 06, 2007

BBC Report on US Foreclosures: The Usual BBC Objectivity?

Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US 'rust belt'...It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes....Foreclosure Wave Sweeps America, BBC Report, 11/5/2007

No offense to Clevelanders, but choosing this city as representative of the sub-prime mess is about like picking Chernobyl as a good example of a city developed by nuclear power. Fact is, with the best efforts of local politicians, not to mention the federal government, Cleveland has been sinking for half a century. A downtown revival does not rebuild a metropolitan center nor replace productive enterprises that have found better places to do business. And throwing subprime mortgages out like so much raw meat in Cleveland, as in Buffalo, another city where massive government subsidies have not been able to reverse decades of local and state government misconduct, was just stupid, not to mention mendacious and politically manipulative.

The writer recalls similar exercises in banker stupidity and is not impressed. As with those who threw billions at Filipino colonels and African dictators in the 1980s, the senior officers of banks who offer loans to people who can't afford them, and are unlikely to pay them back, should be fired. They won't be, however, and they know it. As with the merry band of loan pranksters in the 1980's, they know very well that a massive credit problem will force Congress to offer legislative relief to banks that should be allowed to fail for their bad business practices.

It will be offered in the guise of "helping the average American." Right -- the collusion of bankers and creditors to loot the taxpayers is justifiably described as criminal behavior, not as the innocent gulled by Satan's agent at Citigroup. However, as with the S&L disaster, it won't matter which party dominates Congress. The loot and plunder philosophy that's informed American bankers and their creditors since the "sovereign debt" days of the 1980s to the subprime market of today will be upheld in Congress and ignored by the Courts.

Don't expect this to be reported by the BBC.


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