Wall Street’s P.R. whopper: How its big new lie can trigger another crisis

Hoping to gut regulations in the housing market, big banks are pushing a new line. The problem is who's buying it

David Dayen

In the wake of Attorney General Eric Holder’s resignation last week, a former Obama administration official made an incredible statement. The Washington Post reported that Jim Parrott, who advised the Obama White House on housing policy during the first term, said Holder’s “tough” enforcement actions on big banks harmed the economy, with the implication that his replacement should just back off.

First of all, the idea that Eric Holder led a hard-charging onslaught against bank malfeasance is a fantasy. The Justice Department never led one top executive to jail for the mountain of fraud that caused the Great Recession, and much of the misconduct that was never fixed continues to this day. Big banks were so wounded by the DoJ crackdown that their stock prices rose whenever they announced a settlement.