Mourning Spitzer’s demise and the Fed’s Bear Stearns bailout

I liked this article from investigative journalist Greg Palast on the coinciding timing of the Federal Reserve’s surprising loan to Bear Stearns (via JPMorgan Chase) and the forced resignation of the “Sheriff of Wall Street” Eliot Spitzer. Though a little overbearing, the article has it right about the fraud of sub-prime mortgage loan securitization and makes me want to read more about the Bush administration’s stifling of state consumer protection law enforcement, which Spitzer, more than any other Attorney General, fought. It is sad that he is gone from public service.

Without further ado, Palast:

This week, Bernanke’s Fed, for the first time in its history, loaned a selected 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.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.

Even Palast does not assert that the revelation about Spitzer was deliberate, but he rightly insinuates that it would be naive to think George W. Bush’s highly politicized justice department wasn’t gunning for Spitzer’s offing.