I know, calling John Edwards a hypocrite and then pointing out that hypocrisy is getting to be fish-in-a-barrel easy, but this latest one takes the cake:
Democratic presidential contender John Edwards has investing ties to subprime lenders who are foreclosing on victims of Katrina, according to a report published Friday.
The Wall Street Journal said there are 34 homes in New Orleans that face foreclosure from the subprime unit of Fortress Investment Group. Edwards has about $16 million in Fortress (Charts), a hedge fund and private equity manager, the newspaper said.
...Rising defaults among subprime mortgages - those home loans given to borrowers with the weakest credit records has triggered a credit crunch and resulted in a wave of foreclosures.
Where to begin? Edwards has $16 million invested in a company that offers mortgages to those with credit problems. Many of those people are the poorer among us or many are the unfortunate such as victims of Katrina. Subprime lenders saw a market niche whereby they could lend to these people -- generally at higher interest rates--and make a lot of money. In essence, they lent money to those who were incapable of qualifying anywhere else and probably shouldn't have received loans and charged a premium for the service.
Edwards says he may or may not have known about subprime lending. That's a real endorsement for president, "I can't remember."
Anyone who has an iota of brains saw this subprime crash coming. Lending money to those who are not able to pay it back does nothing for those people but drive them into bankruptcy. There's a reason it's known as "predatory lending". The markets are experiencing huge swings because of this issue and it's not going to end soon.
Now to Edwards; he's spinning this as if he invested the money to help poor people and once he discovered that -- gasp! -- they were actually foreclosing on those who couldn't pay and some of them are Katrina victims, well, he's going to pull his money out or make sure it isn't used for subprime lending. I would imagine with a nice, tidy profit.
This is Edwards in a nutshell; he has spoken out against subprime lending before saying that it wrong but was at Fortress when they increased their subprime business. He knew about the lending practices and he knew that they were making money on the backs of those who have the most to lose.
To add to the hypocrisy, this is from Edwards campaign blog (posted by one of his diarist's and we know how selective he is about them) posted less than a week ago:
Predatory lending - including pay day lenders as well as sub prime mortgagors - is a genuine populist issue where John can clearly distinguish himself from the crowd. I'd like to see him really go after it.
First, predatory lending - including but not limited to sub prime mortgages - is not new despite the only recent attention it is receiving in the main stream media. It is and has been directed against the poorer consumer for at least 10 years - there are consumer experts who have gone unheeded for at least a decade. The results are tragic but not that well known outside consumer circles.
Emphasis mine. Yeah, "two Americas", one where you can make money off of those you claim to be standing up for and another where you talk out of both sides of your mouth when asked about it.
Update: (8/17/07 1609) OK, people seem to not understand that Edwards worked for Fortress:
BusinessWeek has learned that Edwards has signed up to work for the New York-based private investment concern Fortress Investment Group as a part-time senior advisor. As such, he will be "providing support in developing investment opportunities worldwide and strategic advice on global economic issues," says Edwards spokesperson Kim Rubey. Fortress declined to comment about hiring Edwards, who teamed up with Massachusetts Senator John Kerry in a losing bid against President George Bush and Vice-President Dick Cheney last year.
He was an investor and an employee in a senior position.
Reader Comments ( Page 1 of 3)
1. How does that make him a hypocrite?
He gave these people a chance when no one else would.
They failed. How is that his fault? Did they ALL fail or just a few?
I'll bet you aren't telling the whole truth here either.
Richard at 11:10AM on Aug 17th 2007
2. Just another reason NOT to vote for John Edwards.....and there are many...
R Thrower at 11:26AM on Aug 17th 2007
3. Richard,
I'll make this as clear as I can. These subprime companies do indeed give those a chance that wouldn't have it without them. They are, however, charging higher interest rates for that service. They are making money from this, not doing it out of the godness of their hearts and concern for humanity. Edwards profited from this practice while simultaneously condemning it. That is the definition of hypocrisy.
Did they all fail? No they did not, but there's a reason that businesses look at you credit history when you apply for a loan and a reason they don't give loans to those who can't afford them or who have horrible credit histories.
Clear enough?
Nice try defending your boy but you can't defend the indefensible.
Scott at 12:02PM on Aug 17th 2007
4. This is such a ridiculous post, that at first consideration responding struck me as, possibly, a waste of time...but couldn't help myself, given the ludicrous nature of this accusation of hypocrisy.
First, no Presidential candidate on either side of the aisle has done more with his/her status to seek to give voice to those who have become voiceless under the current failed Republican administration than John Edwards. Talking about entrenched poverty, civil rights, predatory lending, and the need for all to ante up and cover the cost of quality health care for EVERY American, regardless of socio-economic status, doesn't typically score political points. Senator Edwards genuinely is committed to these things because he deeply believes they're better for the nation and the world.
As to the investments and the various uses by private firms, who among us can state with certainty what investments their banks, retirements funds, annuities, etc. have, and how our contributions to those funds are being used? Certainly once one learns of something that he/she can control, he/she can choose to act on it. However, to mislead readers to believe that Senator Edwards somehow knowingly--if, in fact, this is even true to begin with--invested in companies who turned a quick book by taking advantage of poor and/or desperate Americans in the wake of the Katrina tragedy...well, that's disengenuous at best--AND the lowest form of political discourse. If there's any good news here, it's that, over and over again, posts like this one on hypocrisy serve to reveal the lack of depth, the level of duplicity, and the absence of basic fairness on the part of the partisan author. The bad news, of course, is that this type of thing breeds such cynicism, and demeans further our political process.
John N at 12:25PM on Aug 17th 2007
5. Since when is making a profit a bad thing?
There is nothing in the Democratic Party platform opposed to capitalism.
Thom at 12:40PM on Aug 17th 2007
6. Hey John N,
Edwards did not "invest" in this company, he was an executive for them.
Don't spin this as a smear, the guy worked for a major subprime mortgage company and that company is now foreclosing on Katrina victims.
Edwards is an empty suit and the American public knows it. He has a spiel about "Two Americas" and the people hear it and think of his $400-$1,250 haircuts.
Edwards is a hypocrite and no amount of spin from you will change that salient fact.
Scott at 12:42PM on Aug 17th 2007
7. Aren't all politicians hypocrites? Not a single one I've listened to will give a direct answer to any questions. As for John Edwards haircuts, do you know how much the other candidates pay for theirs, like I could care less for what he pays for a haircut as long as it's his money that he worked for. Looking at all the things wrong in my government today, foreclosing on some houses is the least of our worries. You should be caring about the corporate bail out that is going on for all the corporations that loan money.
EULA at 1:03PM on Aug 17th 2007
8. So, Scott,
Where does your bank invest? Are all its investments above prime? Is it an exemplary actor in efforts to empower your community? What about the company/ies that invest your IRA/401k/etc? Give us a chance to applaud your compassion.
Kay at 1:06PM on Aug 17th 2007
9. You must listen to Fox, the infoentainer. Get you facts straight. Edwards is the most truthful, and honest man running for President. This type garbage will not work this time. You are just afraid of the lockstep Rep. running against him as you know he will win. Get a grip!
mjjenkins2131 at 1:09PM on Aug 17th 2007
10. So Kay,
Edwards didn't invest or bank there, he worked there. Besides, it isn't a bank, it's a mortgage firm.
I'm constantly amazed that people don't click on the links to read the sources before commenting.
A simple suggestion, folks; read the source link, get the facts and then comment. Knee-jerk reactions just make you look silly if you don't have the facts.
Scott at 1:16PM on Aug 17th 2007
11. Hey Scott,
If I were you, I'd get your facts straight. The more you blog, the more rediculous you look. Ever heard of quitting while you are ahead? Apparently not!
Connie at 1:24PM on Aug 17th 2007
12. John N.
Great Piece! Actual intelligence is a nice thing to witness.
Connie at 1:27PM on Aug 17th 2007
13. I am preparing to buy my first home, and of course I have self-inflicted wounds on my credit score from college (THAT's preditory lending...giving a college kid a credit card!). Because of that, I am having to eagle-eye my credit report to make sure that I am ready & polished (was at 720 FINALLY from 613 a year ago...but that's scrunched back down now b/c I have my cards maxed out on medical debt...another huge issue in this country...they wrote off half of it for the insurance co...why not me?)
So, thank you to the preds for preying on these people to the point that I am going to have a much tougher time getting a decent rate b/c they realized their little scheme is causing them to go belly-up. Sure, the market is dropping, but so are the chances I can get a loan at a rate that doesn't make my head spin!
It's people like Edwards that "fight for the little guy"...encourage & support them, give them confidence that "Yes, you, too, can have your own slice of the American Pie" and then fold his hand in his lap like a decent gentleman as he is squandering money from the drop box under the register.
I'd love to be more proactive in politics, but honesty only gets you sent home with a thank you and a band-aid.
Someone should red-tape their mouths shut and move them to the 9th ward. That may be a nice reality-check for them.
Until then, I'll keep paying my income taxes so they can go on vacation & ship washers for a million in freight, and then take my taxed left-overs to the mortgage co. to over-charge interest on & tack on superfluous fees, and then I'll go over to the hardware store to pay another 9% in taxes to fix up the best home I could afford.
Oh, and don't forget to pay for the inflated energy bills each month, too. Can't let the gas companies skimp on those shower curtains, can we?
SomeonesMom at 1:32PM on Aug 17th 2007
14. In a free market economy there are going to be subprime lenders for housing, for cars, for all forms of credit. If there weren't sub-prime lenders, then there would be no credit for the poor. Are you saying that it's wrong to encourage people to lend to the poor by investing in sub-prime lenders? Or are you really just twisting and spinning the facts to your right wing tilt?
steve at 1:32PM on Aug 17th 2007
15. If bamks realy want to help those with questionable credit retings or who are a poor risk, why don't they give them their loans at a reduced rate of interest, instead they add more interest to them, making it more likely for them to fail, sounds like the pay day lenders all over again, trying to fill their own pockets and heck with those who are less fortunate.
Jm
jonas at 1:50PM on Aug 17th 2007