It looks as if another mind trick, well known in the Congress — delay and deflection — will now work to make Americans forget one of the biggest scandals of our time: the housing collapse that triggered the 2008 financial meltdown we are still suffering from. We shouldn’t just gaze over the fiscal cliff everyone else is scrutinizing; we should also examine the droids who helped set in motion our current economic mess.
Last week, over the holidays, the House Ethics Committee quietly joined its Senate counterpart in finding that no members or staffers — or at least any it claimed jurisdiction over — broke congressional rules while obtaining “VIP” mortgages from Countrywide. This failed lender at one time provided a huge share of the questionable subprime mortgages issued by Fannie Mae and Freddie Mac, the government-backed mortgage lenders that were some of the first players to fall in the 2008 financial collapse.
Left unsaid is that Countrywide, Fannie, and Freddie were also able to kill attempts to rein in the subprime-mortgage market while it was pumping up the unsustainable housing bubble, starting in the late 1990s, and peaking between 2004 and 2006.
The Ethics Committee insists that some House members and staffers didn’t know they were receiving favorable treatment; the committee also suggests that the discounts these individuals obtained might have been equal to or less generous than the terms offered by other lenders. The entire culture of Congress was corrupted by the housing government- industrial complex, and the Ethics Committee report only skims over the surface of that scandal.