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The John Edwards campaign took a huge hit today, and it was delivered by The Washington Post.
In a long piece today, The Post reports that Edwards, whose 28,000-square-foot home has not kept him from a campaign based on advocacy for the poor, worked at a major hedge fund whose main business was the subprime loan market that has exploited the poor.
The subprime mortgage market is how credit-risky homebuyers get a loan. Often these are people close to poor or actually defined as poor.
Edwards has repeatedly bashed the subprime loan business as exploiting the poor. Now he says when he went to work for the hedge fund it was to learn about poverty and he didn't know the fund was involved in the subprime business.
This is as laughable as the idea that a $400 haircut shows the poor you are on their side. Edwards has been caught in a major league act of presidential hopeful hypocrisy.
Why? Because the hedge fund he went to work for was in the business of selling loans that could hurt the borrower later. In this case, those borrowers were the people Edwards says he's running to help.
By definition, the subprime business exists to help poor people who are credit risks to get loans. Many of them will end up going broke because they cannot afford those loans when interest rates rise. Proof of that are the new figures on foreclosures among subprime customers, now running 42 percent higher than last year. 1.2 million subprime borrowers lost their homes in '06, and one of the companies up to its armpits in that action was the fund Edwards was involved in.
Worse, this wasn't when Edwards was a mere callow youth. It was recent history, only a year after he lost the election as John Kerry's running mate, when he'd been campaigning on the "two Americas" theme, as the man fighting for the poor.
Edwards says he just remembers being told the company he went to work for did lending to start-up businesses. No mention of a multi-billion dollar stake in mortgage companies issuing high-risk loans to poor people. "Those are the things I remember," Edwards told The Post. "They may have told me more."
"They may have told me more" gives him a lot of wiggle room, obviously. Let's now watch the advocate of the poor who spends $400 on one haircut wiggle out of this one.
That's My Word.
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