Forbes magazine, located a couple of miles from Wall Street, hatched an idea for an article on the Scam Capital of the United States. That’s a fun angle and easy on the travel budget, since the magazine is situated in Scam Central. There’s Bernie Madoff, the investment banks that spun mortgage-backed securities into a worldwide financial meltdown and humongous government bailouts, the ratings agencies that stamped this mess with AAA seals of approval and the asleep-at-the-wheel Securities and Exchange Commission. To offer a sweep of recent history, there’s the cast of characters in such books as “Den of Thieves” and “Liar’s Poker.”
Forbes writer William P. Barrett decided to train his sights on Spokane as the “Scam Capital of America.” So the article denotes the Spokane Stock Exchange, the River Park Square garage, the diploma mills and other assorted controversies. The premise, it seems, is that pound-for-pound Spokane is the shadiest place in the nation, and he isn’t talking about the trees.
Strangely absent from the litany is the Metropolitan Mortgage and Securities debacle, which is the heavyweight champion of local financial mayhem and a precursor to mortgage-related meltdowns that occurred on a much grander scale elsewhere (like, say, New York, which is home to Forbes. Have I mentioned that?). Metropolitan’s failure hit some 16,000 investors who held about $600 million in unsecured corporate bonds and preferred stock. One executive was convicted of felonies, and several others settled accusations of fraud.
I asked Barrett about the omission, noting that it would be like featuring Phoenix without mentioning S&L grifter Charles Keating. He said Met Mortgage didn’t strike him as “a historically seminal event or illuminating cultural root,” like Keating or the Spokane Stock Exchange. The whole article leverages fuzzy perceptions like that with Wild West clichés. When I asked what specific metrics he used to land on Spokane, all he offered was a general sense that he was onto something.
Well, my sense is that the Met Mortgage meltdown was too large, too traditional, too, um, New York-like to mention. Just your basic mishap where people lose their life savings or their jobs. Nothing for Easterners to laugh about there.
I also sense that when people think of scam capitals, they’ll continue to start with New York, even if it isn’t perceived as a place of “rugged individualism” populated with rubes ripe for the taking.
Fact-checked. In Wednesday’s column, I cited a factcheck.org item that claimed that President Barack Obama was wrong when he said 90 percent of recovered crime guns in Mexico come from the United States. The organization has downgraded its claim from “not true” to the president’s claims being unsupported by government statistics.
Bottom line: The influx of weapons is a big problem, but the actual figure is difficult to quantify.