The Village Voice‘s cover story this week slams Andrew Cuomo as a sort of bumbling godfather of the current subprime mortgage crisis that has done so much to damage the American economy and to ruin lives.
A summarizing paragraph from the long story by legendary investigative reporter Wayne Barrett:
Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded “kickbacks” to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.
Basically, according to the article, Mr. Cuomo, now New York State attorney general, drove efforts by HUD to increase minority homeownership. His agency encouraged this by encouraging subprime lending. The subprime lending eventually led to the subprime crisis several years after Mr. Cuomo left HUD when the Clinton administration ended.
That’s it, really: A place-holder Cabinet secretary who left office six years before the crisis started breaking is responsible because he wanted to increase minority homeownership. The rate-slashing Fed, predatory lenders, securities rating agencies, media cheerleaders, etc.–they’re largely off the hook because it all started with Mario Cuomo’s boy and his good intentions.
We don’t buy it. If anything, Mr. Cuomo’s effects on what was to come were wholly unintentional. Note the very last sentence of The Voice‘s massive story:
He seems more comfortable at 50 in the state attorney general’s office than he has ever appeared in his public life, but the country will be living with his HUD mistakes, ill- or well-intended, for a long time to come. [emphasis ours]
Check out this New York Times story from Tuesday by Abha Bhattarai on the origins of the current economic downturn. Two words: Green. Span.