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Showing posts from June, 2009

Leverage or Banks Running Amock

For those over 50, when we think about banks, we think about our neighbor who operates the local bank that gave our neighbors mortgages. Not any more. Now we are dealing with huge multinational banking corporations. In 1989 the five largest firms controlled just 7% of the mortgage servicing industry; by 2007, the five largest firms controlled 46%.  The Nation tells us that after Bank of America merged with Countrywide, three banks, Bank of America, Wells Fargo and Chase controlled 48% of the nation’s $11.5 trillion in mortgages. These banks have become so large that any financial problems they meet will become the nation’s problems. And indeed that has happened.

Banks became too highly leverage particularly in the mortgage business. Until recently, homeowners were required to put 20% down on any mortgage they sought. However, terms changed as deregulation of the marketplace was encouraged after President Reagan was elected.  Banks began offering mortgages with little or n…

How the rich use access to money during fiscal crises to control the nation’s politicians.

Author Lynne Weikart is available for radio, television and print interviews on how the fiscal elite use access to capital to undermine the voters’ will. She puts a human face on each of New York City’s fiscal crises, analyzes their historical patterns, and compares the tenure of several mayors. This timely book, Follow the Money: Who Controls New York City Mayors, has become an invaluable book for those interested in the future of American cities during the nation’s severe financial crisis.
Through the history of politics, Weikart reveals how financial elites in New York City have exploited recurring fiscal crises and sharply curtailed the range of choices open to mayors in setting priorities and implementing budget choices. In the face of enormous pressure during a fiscal crisis to defer programs and compromise promises to constituents, however, committed mayors from Fiorello LaGuardia to Michael Bloomberg have at times managed to overcome obstacles and achieve their go…