Michael Bloomberg is yet again treating Wall Street protesters' gripes with his unique style of empathy, "utter dismissiveness." The billionaire, who can thank the robust growth of the financial services sector over the decades for his fortune, knows the truth! The banks did nothing wrong; it was all Fannie Mae, Freddie Mac and Congress forcing everyone else to give houses to poor people.

Here's Bloomberg addressing the commies' complaints at a "business breakfast," via Capital New York:

"I hear your complaints," Bloomberg said. "Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I'm not saying I'm sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn't have gotten them without that.

"But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it's one target, it's easy to blame them and Congress certainly isn't going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for."

Congress did urge banks early on to expand into mortgage markets that were previously deemed unacceptable. But only a small percentage of really bad loans were made under the Community Reinvestment Act. Fannie and Freddie were terrible businesses with poor accounting skills, and they invested a lot of their money in crappy securities. But their share of risky new securitizations was considerably less than that of the private banks as the as the bubble went on. They were not the drivers of the crisis.

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If you're going to blame the government, you can always do that, but not in the way Bloomberg thinks: You can blame them for allowing the big banks to do the awful things they wanted to do! To pick one example out of many, let's look at this episode involving the SEC in April, 2004:

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

So here we have the five big investment banks pushing the SEC to waive leverage requirements on all things mortgage-related. The SEC agreed to it, because the SEC sucks. But it was the five big investment banks who wanted and were lobbying for this, and then screwed everything up after they got it! So it seems like the big banks, and the business strategies they agitated for, to make lots of money, were the problem.

But what's the point of getting mad at Michael Bloomberg? He's the mayor of New York City, and his prerogative is going to be to protect his city's major industries from any sort of downsizing at the hands of federal regulators, even if it might put the nation on a more sustainable course. So just ignore him.