'American Casino': How Our Nation's Financial Sector Became a Massive and Unregulated Gambling Operation
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These houses are also being used widely as meth labs, as grow houses. The community is just completely torn apart. It's very post-apocalyptic, the feel of it. When you see the film, you will really understand how bad it is. And not only should you see the film to see that, but people should go out and look at some of these communities. I mean, it's real devastation.
And in these communities, you know, you have one default, and then that drags down the value of house of the person next door who is paying their prime 30-year mortgage. It's kind of this terrible snowball that destroys the entire community. More and more people end up in foreclosure.
And that has not unwound yet. For people to talk about "green shoots" right now is bizarre -- you know, every 13 seconds, there's a foreclosure in this country.
JH: Now, the film isn't preachy, per se, but obviously you hope to have some sort of impact with it. Tell me what are you hoping that audiences take away when they walk out of the film.
AC: Well, we let people talk. You can hear what they say. And to hear people who have gotten into mortgage trouble describing what happened and what they're trying to do about it, you know, these are not greedy people who were sort of eagerly trying to make a bet that went wrong.
And the other idea you hear about is that we're all guilty. We're all living in a bubble. You know, as a society we're all sort of chasing this almost-impossible dream.
Well, that's not the case. And again, you get that from the film. The American Casino makes the case very clearly that this was a top-down crime, really.
Yes, there were mortgage companies that were lying about people's income and involving people in these sort of situations, but it came from the banks. It was the banks pushing the whole thing to get these loans in so they could then package them, securitize them into these bonds and sell them on.
Don't take my word for it. You can hear the banker say in the film that they were encouraged to make more and more aggressive loans. Aggressive loans means basically entangling somebody who really can't afford it in a mortgage. You don't tell them they can't afford it, you tell them they can afford it. But you know they're going to get into trouble, terrible trouble. But that gives you something to securitize and sell on to some Korean bank or whatever.
LC: Yes, he goes on to say this was done to feed the CDOs. They needed more and more. There came a point where most Americans who wanted mortgages had them or had already refinanced. So you had to find new people, more and more people to get loans to feed the beast, to package into these CDOs so that you could make a ton of money selling them off to whomever you could dupe with this stuff.
This banker, we said to him, "Well, who would buy these CDOs-squared?" And his one-word reply is, "Idiots."
And you understand finally that the people on Wall Street knew what was happening, and they continued to do it, because the money was so good.
JH: That was one of the most powerful moments of the film, by the way. That one-word answer.
Let me ask you to step back from the concrete for one moment. You show snippets of George W. Bush talking about the homeownership gap. This is a very long-standing element of our political culture. This idea of homeownership as a road to wealth.