Matt Stoller is a fellow at the Roosevelt Institute
Last month we had New York Fed Board Member Kathryn Wylde whining and meddling about Eric Schneiderman’s investigation into big banks. That seriously backfired. HUD Secretary Shaun Donovan put pressure on him as well, and that didn’t go over so well. And after Tom Miller petulantly stopped allowing Schneiderman on his AG conference calls, there was a mini-media storm over the rancid character of the DOJ and bankster-owned Miller. None of the insider signals worked, so now it’s on to stage two of neutralize Schneiderman. It’s time for…. the smear campaign!
Two editorial boards are coming out and using innuendo to paint Schneiderman as a self-promoter looking to make a name for himself by unfairly tarnishing banks. It’s pretty standard – throw up rumors that have a narrative basis in the American psyche, and chip away at public faith. Here’s the Washington Post’s editorial.
The majority of the other attorneys general, led by Tom Miller of Iowa, have kicked Mr. Schneiderman out of the negotiations, accusing him of making excessive demands. Mr. Schneiderman protests that the banks are to blame, for trying to use the robo-signing case to get immunity they could use on the securities front. Mr. Miller and his colleagues respond that they have no intention of letting the banks off that particular hook.
We’re tempted to declare a pox on everyone’s house — or at least say that the banks are getting what they deserve for being sloppy, and that the attorneys general are getting what they deserve for exploiting an overblown scandal to shake down the banks.
After all, the banks will have to come up with that $20 billion somehow — perhaps through reduced lending and higher fees. That wouldn’t be a problem if the money were going to compensate victims. But it won’t, because there don’t seem to be many victims
Notice the lie (repeated below in the other editorial) – that the majority of Attorneys General threw Schneiderman off the 50 state task force. No, it was Tom Miller’s decision, period. Or at least, that’s what some newspaper called The Washington Post reported last week.
So why is the Post lying about this situation? Why the split between the news and editorial? It might have something to do with, well, money! You see, the Washington Post newspaper isn’t profitable, the company makes most of its money from its for-profit educational subsidiaries (hence the nickname “Kaplan Test Prep Daily), including its for-profit university. And guess who is investigating the shady practices of the subprime university educational racket?
Mr. Schneiderman is looking into whether the schools and their recruiters misrepresent their ability to find students jobs, the quality of instruction, the cost of attending, and their programs accreditation, among other things. Such activities could constitute deceptive trade practices or fraud.
Oops. Looks like the Washington Post has a financial interest in kneecapping the New York Attorney General. While Kaplan isn’t being investigated, the entire sector is reliant on government subsidies that are at risk should criminal charges nail a few of the schools.
Next up is the New York Daily News, a paper which has now gone after Schneiderman twice for… being an elected official. The latest hit is that Schneiderman sent out an email to his political list after getting pressure from Tom Miller and the Obama administration. The horror! A politician wants to communicate his side of the story after the President, major money center banks and the New York Fed go after him. How inappropriate! For shame!
It’s not like the regulators, banks, and Tom Miller’s office have been leaking like a sieve and lying to the press for months. Oh wait, they have. And it’s not like Tom Miller took enormous sums of money from out of state banks and then turned around to negotiate a sweetheart deal with those same banks. Oh wait, he did.
Finally, there’s Mort Zuckerman himself, the real estate billionaire who owns the New York Daily News. He wouldn’t have a financial interest in the banks, would he? Well, let’s see. In 2008, he was busted shilling for a bailout of Citigroup, because Citigroup rented more than a million square feet of space from his company. The guy went on TV and passionately advocated public policy positions that would help his bottom line, while owning major media outlets. Fascinating.
Schneiderman’s gotten on the wrong side of some very aggressive and very powerful people. It’s enjoyable to watch them flail around, at least for a little while.. They have given him hints, they have told him publicly and privately to back down, and you can hear the increasing frustration at New York cocktail parties. He should just know better, right? For now, it’s fruitless – they can’t sway him, and they can’t destroy him, and everything they try backfires. It’s not only hilarious, it’s also a window into just how these people exercise power.
You can reach Matt Stoller at stoller (at) gmail.com or follow him on Twitter at @matthewstoller
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