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Let me explain: The administration accomplished this feat through an obscure federal [Treasury] agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers. In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal When v government's actions were so the mz egregious and so unprecedented that all 50 state attorneys general, prepa and all 50 state banking superintendents, actively fought howeve the new rules. that they But the unanimous ° opposition of the 50 states did made in < not deter, or even slow, the of civil Bush administration in its goal of protecting the banks. the { In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation... coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure." a yen OCC examined the books of national banks to make Funding the American Empire sure they were balanced, an important but What are we to make of Spitzer's charge that the Bush uncontroversial function. But a few years ago, for administration interfered to pre-empt state laws against the first time in its history, the OCC was used as a predatory lending, and of the fact that the mainstream tool against consumers. media did not report that? A petty motive for the OCC's In 2003, during the height of the predatory lending behaviour in 2003 might have been to allow the housing crisis, the OCC invoked a clause from the 1863 bubble to continue through 2003 and 2004, thus National Bank Act to issue formal facilitating Bush's re-election. But the opinions preempting all state persistence of Treasury obstruction predatory lending laws, thereby thereafter, despite the unanimous rendering them inoperative. The opposition of all 50 states, and the OCC also promulgated new rules continuing silence of the media about that prevented states from this disagreement suggest that some enforcing any of their own broader policy intention may have consumer protection laws against been at stake. national banks. The federal When we turn to One is struck by the similarities with government's actions were so the martial law the Savings and Loan scandal which egregious and so unprecedented . was allowed to continue through the that all 50 state attorneys general, preparations, Reagan 1980s, long after it became and all 50 state banking . apparent that deliberate bankruptcy superintendents, actively fought however, we find was being used by unscrupulous the new rules. that they are being profiteers to amass illegal fortunes at But the unanimous ° rer) what was ultimately public made in anticipation opposition of the 50 states did expense. not deter, or even slow, the of civil unrest in In the same way, the long- the future. Bush administration in its drawn-out housing bubble, and goal of protecting the banks. particularly the derivative bubble In fact, when my office that was floated upon it, allowed opened an investigation of the Bush administration to help possible discrimination in offset the trillion-dollar-plus cost mortgage lending by a of its Iraq misadventure by number of banks, the OCC creating spurious securities that filed a federal lawsuit to stop sold for hundreds of billions, not the investigation... just in the United States but through the rest of the world. Eliot Spitzer submitted his op- In the long run, this was not a ed to the Washington Post on 13 February. If it had an sustainable source of wealth for America's financial impact, it was not the one Spitzer had hoped for. On 10 class, which is now suffering like everyone else from the March, the New York Times broke the story of Spitzer's | consequent recession. But in the short run, the financial encounter with a prostitute. According to a 21 March crisis and bail-out made it possible for Bush to wage a Times story, "on Feb. 13 [the day Spitzer's op-ed went up _ costly war without experiencing the kind of debilitating on the Washington Post website] federal agents staked _ inflation that was brought on by America's Vietnam War. out his hotel in Washington". The trillion-dollar meltdown, in other words, can be It is remarkable that the mainstream media found rationalised as having helped finance the war in Iraq. Spitzer's private life to be big news, but not his charges | When we turn to the martial law preparations, however, that Paulson's Treasury was prolonging the financial __ we find that they are being made in anticipation of civil crisis, or the relation of these charges to Spitzer's unrest in the future. Why such intense preparation for exposure... this? After Spitzer's op-ed was published, according to The obvious answer, of course, is memory of the journalist Greg Palast (14 March) the Federal Reserve rioting that occurred in San Francisco and elsewhere "\..for the first time in its history, loaned [sic] a selected during the Great Depression of the 1930s. Indeed, that preparations, however, we find the future. exposure... After Spitzer's op-ed was published, according to journalist Greg Palast (14 March) the Federal Reserve "\..for the first time in its history, loaned [sic] a selected 14 ¢ NEXUS When we turn to the martial law that they are being made in anticipation of civil unrest in www.nexusmagazine.com FEBRUARY — MARCH 2009