Occupy the mortgage lenders
A sign sits in the front yard of a home being offered for sale January 25, 2010 in Pleasant Prairie, Wisconsin. (Getty Images)
October 20th, 2011
01:15 PM ET

Occupy the mortgage lenders

Editor's Note: Simon Johnson, a former chief economist of the IMF, is co-founder of a leading economics blog, BaselineScenario.com, a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-author, with James Kwak, of 13 Bankers. For more, visit Project Syndicate or follow it on Facebook and Twitter.

By Simon JohnsonProject Syndicate

Participants in the Occupy Wall Street movement are right to argue that the big banks have never properly been investigated for the mortgage origination, aggregation, and securitization behavior that was central to the financial crisis – and to the loss of more than eight million jobs. But, thanks to the efforts of New York’s attorney general, Eric Schneiderman, and others, serious discussion has started in the United States about an out-of court mortgage settlement between state attorney generals and prominent financial-sector firms.

Talks among state officials, the Obama administration, and the banks are currently focused on reported abuses in servicing mortgages, foreclosing on homes, and evicting their residents. But leading banks are also accused of illegal behavior – inducing people to borrow, for example, by deceiving them about the interest rate that would actually be paid, while misrepresenting the resulting mortgage-backed securities to investors.

If these charges are true, the bank executives involved may fear that civil lawsuits would uncover evidence that could be used in criminal prosecutions. In that case, their interest would naturally lie in seeking – as they now are – to keep that evidence from ever seeing the inside of a courtroom. FULL POST

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Topics: Business • Protests
September 20th, 2011
08:00 AM ET

Who will eclipse America?

Editor's Note: Simon Johnson, a former chief economist of the IMF, is co-founder of a leading economics blog, BaselineScenario.com, a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-author, with James Kwak, of 13 Bankers. For more, visit Project Syndicate or follow it on Facebook and Twitter.

By Simon JohnsonProject Syndicate

According to Voltaire, the Roman Empire fell “because all things fall.” It is hard to argue with this as a general statement about decline: nothing lasts forever. But it is also not very useful. In thinking, for example, about American predominance in the world today, it would be nice to know when it will decline, and whether the United States can do anything to postpone the inevitable.

Contemporary commenters despaired of the Roman Empire for several hundred years before it finally collapsed. Could America find its way to a similar extension? FULL POST

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Topics: Global • United States