Hoover Institution research fellow Peter Schweizer has a potential blockbuster of a new book hitting the shelves Oct. 6 entitled “Architects of Ruin: How Big Government liberals wrecked the global economy and how they will do it again if no one stops them.” Whew, is that a mouthful of a title or what?
Anyway, Schweizer – whose past books include the superb “Reagan's War,” as well as “The Bushes,” “Makers and Takers,” and “Do As I Say (Not As I Do): Profiles in Liberal Hypocrisy” – documents in grinding detail how progressive and Democratic politicians and radical activists used the federal government to force lending institutions to give mortgages to clearly unqualified poor and minority applicants caused the economic meltdown of 2008.
In short, it wasn't “deregulation of the financial markets” or “out-of-control capitalism,” as depicted by purveyors of the conventional wisdom, it was too much politically correct regulation mandating that lenders throw out common sense and decades of experience in order to make loans that were almost certain to go unpaid.
The effort was launched during the Carter administration but really gained momentum and a head of steam during the Clinton years. (GOPers shouldn't feel too smug as the Bush administration continued and even expanded the practice).
“Architects of Ruin” can be advance-ordered now on Amazon.com. No doubt, it will generate a flood of negative reviews from liberals in the mainstream media and their allies in the political and academic worlds in part because of sensational tidbits like the fact White House Chief of Staff was paid “more than $46,000 an hour as a board member for Freddie Mac.”
What caught my eye today, though, concerns a little known fact about a long-forgotten class-action lawsuit filed in 1994 by three young trial lawyers, one of whom just happens to be sitting in the Oval Office today as president. The case was Selma S. Buycks-Roberson v. Citibank Federal Savings Bank.
Obama and his colleagues claimed in the suit that Citibank had had rejected loan applications by the plaintiffs simply because they were black, or because they lived in predominantly black neighborhoods. In short, the suit was one of thousands filed during the 1990s claiming racial bigotry, not poor credit histories, explained high rejection rates among minorities applying for mortgages.
Whatever you think on that issue, here's what struck me: After four years of haggling, Citibank settled with Buyck, a Chicago woman, out of court. She received $60,000. Obama and the other lawyers on the plaintiff side got $950,000.
Such outcomes help put in perspective why the class-action trial lawyers spend millions of dollars every year lobbying Congress and state governments either to protect the lucrative turf they already have, or to create profitable new lines of litigation.
And it also helps explain why they have so much money to contribute to politicians like Obama who aid their efforts. Supporting medical malptractice caps in health care reform would put a serious crimp in one of the plaintiffs lawyers' most lucrative litigation areas. And if that happened, where would the lawyers get the money to contribute to the politicians who help them?