Really?
Bernie Madoff and
Bill Clinton are at fault? Time must love list reporting: it lets them write logically flawed, soundbite-quality posts that are the length of a real piece of journalism without the hard work of thinking, supporting arguments, and demonstrating that their spurious connections have any base in reality.
Take person 1 for example, Angelo Mozilo. What does Time say?
The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them. In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress. Mozilo left Countrywide last summer after its rescue-sale to Bank of America. A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general.
We now know:
- Mozilo spent years founding, then building up an institution that survived nearly 50 years in the financial industry.
That's an interesting biographical detail, I guess.
- Countrywide "legitimized a notion" that exotic mortgages were okay
They don't demonstrate how his company legitimized this notion. They don't have any statistics, surveys, or even flavor quotes that suggest that Countrywide's lending changed industry perceptions. Wikipedia cites a text source and suggests that Countrywide was even
one of the last companies to enter the subprime market, held back by Angelo's caution. Moreover, as I stated above, subprime loans to NINJAs weren't the problem. The FICO scores of borrowers were rising! Loans to rich adults with a little more appetite for debt and bay windows than prudent are the problematic ones.
- There were people, including people in Congress, who said that they were frustrated with Mozilo's compensation
You may or may not think that it's fair, but to attract and retain top talent, you have to pay top dollar. In 2006 Angilo was a financial professional intertwined in the company's DNA with a 45 year record of incredible performance and foresight. That makes his total 2001-2006 compensation of
$470 million seem pretty reasonable. Yes, $80 million a year is a lot of money, but I think a reasonable argument could be made that he was worth that to the company, which made
more than $6B in revenue the last year it was reporting. Beyond that, much of his payment was in stock options, so his pay was tied to the company's performance, and the company had to bear less risk in paying him. If Countryside performed poorly, he would've done much worse or been shown the door as its figurehead. Besides, what does his compensation have to do with the subprime crisis exactly? Nothing, nothing whatsoever.
- Countrywide was sued for predatory lending by several state AGs
"Countrywide's lending practices turned the American dream into a nightmare for tens of thousands of families by putting them into loans they couldn't understand and ultimately couldn't afford,"
said California's AG, in response to the settlement. If you ask me, if you choose not to read your own mortgage before you sign it, that's your own goddamn problem. What's the logic by which predation is assumed? Any loan above 34% of your income
must be predatory, and you must not have understood what you were doing when you got it. The settlement required that Countrywide waive refinancing fees for mortgageholders with those awful, predatory mortgages who choose to refinance.
Look, maybe the lawsuit was much more substantial than the MSNBC article suggests. Mozilo has even done other bad things, like insider trading and refinancing homes with sweetheart loans for his buddies in Congress and at Fannie Mae, but it doesn't seem like those things contributed to the 2008 crash.
The point is that Time ultimately has up to half of a sentence of a legitimate beef against any of the 25 'culprits', and it's so hidden in irrelevance and drivel that it's impossible to actually learn anything from reading the article.