Political Class Dismissed

The Wall Street Journal editorialist is correct; Andrew Cuomo himself is personally responsible for much of the current recession due to his reckless management of HUD and his grossly negligent encouragement of Fanny and Freddy while he was the HUD Secretary in the Clinton years. In those years, and during the Bush years as well, HUD obtained mortgages for folks it knew or should have known could never pay them back, and Fanny and Freddy encouraged the banks to give out cheap loans to borrowers with bad credit because Fanny and Freddy—in essence the taxpayers—guaranteed re-payments of the loans. Cuomo should have known that this could not last. Unfortunately, the statute of limitations has run on Cuomo’s misdeeds, and he can neither be prosecuted not sued for them. As for his pursuit of Ken Lewis for the fraudulent acquisition of Merrill Lynch (ML), there, too, Cuomo is not doing his job. The pursuit should he an indictment of Lewis, Sheila Bair (head of the SEC), Henry Paulson (then Sec. of Treasury), and Jeff Lacher (head of the Richmond Fed). Bair, Paulson, and Lacher all conspired to threaten Lewis to force him to buy ML for about $17 billion more than it was worth. That coercion was a crime: Both the coercion and the acquisition were criminal acts. Suing Ken Lewis because he harmed Bank of America (B of A) is absurd. Lewis has an indemnity agreement with B of A, whereby it must defend him and cover any judgments against him for all civil lawsuits. So, if Cuomo is suing Lewis because B of A wasted $17 billion by buying ML, what he is accomplishing by suing in such a manner is that if he wins, B of A will pay the judgment! On the other hand, if he had indicted Lewis and the federal officials, and they were convicted, public policy prevents any indemnity. The answer to all this is that Cuomo is running for Governor, and just wants bragging rights.

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