Some of this stuff we already knew. Like the fact that banks love the perks that come with being too big to fail. They will lobby shamelessly to hang on to their riskiest businesses and stay perilously large. No surprise, really. A heads-we-win, tails-the-taxpayers-lose model has a lot going for it, at least for executives atop these institutions.

Here’s another lesson we didn’t need to relearn: Penalties levied on corporate miscreants, and the legal bills they rack up defending themselves, never come out of their own pockets. Insurance policies and shareholders wind up paying. Another win for the me-firsters.

And what if you run a company so far into the ground that the federal government has to take it over? Not to worry: the taxpayers may even pay your legal bills. Consider Fannie Mae and Freddie Mac. Since the two companies collapsed into conservatorship in 2008, taxpayers have advanced about $73 million to pay the legal bills of former executives who are fighting fraud suits and investigations dating back to 2005.

Isn’t America great?

Another unfortunate lesson we keep learning over and over is that policy makers always put off tough decisions for another day. Kicking the can down the road is so much more fun and profitable, especially for politicians worried about re-election.

But last year also provided some truly illuminating moments. A favorite was the pronouncement that if Greece were to default on its debts, it wouldn’t really count as a default at all. That determination meant that investors who had bought insurance against a possible default would be out of luck. Their policies wouldn’t pay off as expected.

Who ginned up this nondefault default? A secret committee of bankers who call the shots in the world of credit default swaps. These people happen to work for big banks that probably sold the insurance and, as a result, would be on the losing end if a Greek default were actually called a default.

It sure is good to run the Wall Street branch of the Ministry of Truth.

Another eye-opener came courtesy of the folks at MF Global, the trading house and derivatives dealer overseen by Jon S. Corzine, the former New Jersey senator and governor and former chief executive of Goldman Sachs. Investors were shocked to learn that MF Global, a supposedly legitimate brokerage firm, was so lax about its affairs that hundreds of millions of customer dollars simply vanished. Months after MF Global failed, an army of investigators is still searching for the missing money.

Washington politicians can usually be relied upon to educate the citizenry — again and again. Last year was no exception. One telling moment came late in the year, when Democrats and Republicans agreed to extend an existing payroll tax cut for two months. Helping to defray the cost was $36 billion generated through an increase in mortgage guarantee fees charged by Fannie Mae and Freddie Mac.

That $36 billion will come out of borrowers’ hides, of course. But using Fannie and Freddie as a money spigot sent a powerful message: Never mind that losses at these mortgage giants have cost taxpayers $150 billion so far. Or that many Americans would prefer these toxic twins to go out of business sooner rather than later. As long as Fannie and Freddie are viewed as piggy banks, there is little chance that Congress will dissolve them. It looks as if these taxpayer-owned zombies, which did so much damage to our economy, are poised to live on and on.

Finally, it was in 2011 that the ugliest paradox of the financial crisis became clearer. That is, some of the very people our government had pushed to embrace the American dream of homeownership — minority groups, lower-income borrowers, immigrants and others previously shut out of the market — were the very people hurt the most by the foreclosure mess. Washington’s push to increase homeownership opened the door for companies to sell poisonous and tricky loans that have now imperiled many of the most vulnerable.

This became painfully evident in a discrimination suit filed by the Justice Department against Countrywide, once the country’s largest mortgage lender. The suit, filed in December, was based on investigators’ findings that more than 200,000 minority borrowers had been charged higher fees and rates by Countrywide than white borrowers of similar financial standing.

The Justice Department also said that Countrywide steered more than 10,000 minority borrowers into high-cost subprime mortgages even as white borrowers received standard, lower-cost loans. The company’s systems, investigators said, allowed loan officers and mortgage brokers to change the terms of mortgages without complying with fair-lending rules.

Bank of America, which bought Countrywide in 2008, agreed to pay $335 million to settle the suit. The events cited in the lawsuit occurred before its purchase of Countrywide.

But the facts assembled by the Justice Department certainly shed new light on Countrywide’s boasts of eliminating barriers to minority homeownership. Its House America program, which committed $600 billion in loans for low-income borrowers in 2003, won plaudits for Angelo R. Mozilo, Countrywide’s co-founder.

The next year, Mr. Mozilo was named Housing Person of the Year by the National Housing Council Conference. “We commend his leadership,” said G. Allan Kingston, the group’s chairman at the time, adding that it “led to the company becoming one of the top lenders to African-Americans and Hispanics, a direct result of his clear understanding that we must do more to ensure affordable homeownership opportunities throughout the nation.”

As I said: live and learn.

Article source: http://feeds.nytimes.com/click.phdo?i=9b0a501680e5cb6376ffad2ffd75c1ed