First, we have the AJC reporting that Fulton County has inflated housing values for tax collection.

“Morris filed suit against the Fulton County Board of Tax Assessors, alleging the county inflated values in scores of neighborhoods by using foreclosures seizures as comparable sales. The seizures, termed credit-bid sales, represent not money changing hands, but unpaid mortgages when a bank takes over a house. He also says appraisers are disregarding valid sales and arbitrarily setting neighborhoods’ average prices.”

….

Emory University law professor Richard Freer, an expert in civil procedure, said the argument for class-action status seems reasonable in this case, so long as Morris’ circumstances are common to every other overtaxed homeowner. There’s likely to be enormous political pressure on the judge not to make a decision that could devastate the county’s finances, but it’s his job to uphold the law, Freer said.

"If the county’s cheating, the county ought to be held liable," he said. "My guess is that if the class is certified, they’re going to get out the checkbook and try to settle."

Banks (SunTrust, BofA, Regions, Wells, etc.) use deceptive transactional structures to avoid the hits to their income statements AND balance sheets that would come from marking to market. Fulton County exploits the resulting overstated housing values established by non-monetary transactions to reap inflated tax revenues.  Why is there only a civil suit over this?

At the national/federal level, we have more evidence of corrupt CEO’s making fortunes at the expense of shareholders, but with their risks underwritten by taxpayers. (The paper he references documents that the CEO’s at the 14 Too Big to Fail banks pocketed – in hard cash terms – over $2.6 billion during 2000-08. Meanwhile, their companies’ shareholders collectively lost over $400 billion in market capitalization during the same time period. We taxpayers have ponied up multiple trillions to bail out their companies via TARP, Stimulus and Federal Reserve purchases of/loans against toxic assets. Add QE I and II to that and you’ve got some real money! We also know from numerous other sources that these CEO’s knew EXACTLY what they were doing in all respects, including their procedural documentation failures that may eventually and hopefully lead to some of them being put in jail.

To top it all, $1.3 trillion dollar investment manager Bill Gross opines today on the endemic corruption infecting DC. Key quotes:

“We need a President who does more than propose “Win The Future” at annual State of the Union addresses without policy follow-up. America requires more than a makeover or a facelift. It needs a heart transplant absent the contagious antibodies of money and finance filtering through the system. It needs a Congress that cannot be bought and sold by lobbyists on K Street, whose pockets in turn are stuffed with corporate and special interest group payola. Are record corporate profits a fair price for America’s soul? A devil’s bargain more than likely.”

“To rebalance debt loads and re-equitize financial institutions that should have known better, central banks and policymakers are taking money from one class of asset holders and giving it to another. A low or negative real interest rate for an “extended period of time” is the most devilish of all policy tools. And the asset class holder that it affects, or better yet, “infects,” is the small saver and institutions such as insurance companies and pension funds that hold long-term fixed income assets. It is anyone who holds bonds with coupons that cannot keep up with inflation or the depositor in a local bank who cumulatively holds trillions of dollars in time deposits that don’t earn a real rate of interest. This is the framework that has been created by modern-day policymakers who have innovated far beyond their biblical counterparts. To put it bluntly, they are robbing savers and taking money surreptitiously from longer-term asset holders who are incorrectly measuring future inflation.”

Pervasive fraud. Until Americans demand and/or respond to leadership that takes a principled stand against this corrosive corruption, the real estate markets cannot clear the toxic assets that poison them, and the economy cannot begin to heal. We need a Chris Christie in every governor’s office, Jim DeMint and Paul Ryan disciples throughout Congress and Rudy Giuliani-like federal prosecutors in every US district attorney’s office. Meanwhile, the Barack and Michelle tragedy continues its performance at 1600 Pennsylvania.

Even the New York Times scorns these scoundrels, and amazingly, applauds bill O’Reilly at Fox News for doing likewise.

Something closer to the current zeitgeist was captured last week by Bill O’Reilly, the Fox News commentator, who likened Goldman Sachs bankers to pigs during a scathing segment on his TV show. “You’ve got to make an example of the big boy,” he fumed in a rant about the company’s tax-avoidance methods, suggesting Goldman ought to be punished for failing to cough up its fair share of taxes. “And this is the big boy.”

See Windfalls for Bankers, Resentments for the Rest – NYTimes.com for more details on

In a recession this deep, recovery doesn’t depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery…

Problem is, consumers won’t start spending until they have money in their pockets and feel reasonably secure. But they don’t have the money, and it’s hard to see where it will come from. They can’t borrow. Their homes are worth a fraction of what they were before, so say goodbye to home equity loans and refinancings. One out of ten home owners is under water — owing more on their homes than their homes are worth. Unemployment continues to rise, and number of hours at work continues to drop. Those who can are saving. Those who can’t are hunkering down, as they must.
Eventually consumers will replace cars and appliances and other stuff that wears out, but a recovery can’t be built on replacements. Don’t expect businesses to invest much more without lots of consumers hankering after lots of new stuff. And don’t rely on exports. The global economy is contracting.

It’s amusing until one realizes how often we discover, at intervals of 50 or so years, how a cohort of people more or less simultaneously learn to game a system until it crashes.