THE BURNED OVER DISTRICT

You have worked hard to get there and usually start expecting the rewards for that work. As Matt Taibbi reveals, one of those perks seems to be charging top dollar for your time while giving no effort. Matt looks at the expert testimony given by Glenn Hubbard, Dean Of Columbia School of Business. For $1200 an hour, Glenn swore that Countrywide did no wrong in its mortgage selection

So how did Hubbard manage to analyze Countrywide and conclude that mass fraud in its underwriting procedures wasn't problematic? Easy: He didn't look at the underwriting! All Hubbard did was take a group of Countrywide loans and compare them to a group of other loans from the same time period.

When that comparison revealed that Countrywide's loans failed at about the same rate as the non-Countrywide loans, he smartly concluded that fraud wasn't the problem and that macroeconomic factors must have been the cause.

Except for one thing: He left out the fact that about half of the loans in the "non-Countrywide" pool he selected for his analysis were originated by companies that were also being sued for underwriting fraud and other irregularities. What Hubbard did is compare a bunch of bad loans to a bunch of bad loans...

Hubbard must be a very inquisitive thinker. He took $1200 an hour specifically to not learn how subprime loans were created. Moreover, he did this non-learning for Countrywide years after the financial collapse, long after the truth about that company had already become common knowledge pretty much everywhere in the world outside Hubbard's office, long after Countrywide CEO Angelo Mozilo had been charged by the SEC with deliberately misleading investors (and insider trading, to boot), and long after the Attorney General of California had concluded that Countrywide was essentially a giant scheme to use mass fraud to dump pools of bad loans on unsuspecting marks on the secondary market.

Given the great masses of information that was out there about Countrywide, Hubbard in other words had to perform a labor of Hercules to avoid letting the truth about the company slip through a crack in his skull. Naturally, this awesome ability to non-absorb information makes him qualified to be one of America's leading academics. Way to go, American learning!

What really pisses me off is that I could have done the same thing and only charged them $600 an hour. What a waste!