I know; this is going to be a diary that some of you will not want to hear in an election year. Perhaps you would rather read one not of analysis, but of fear; fear of a Mitt Romney presidency. However, do you not already get plenty of that on the FP, MSNBC, and practically every Democratic leaning organization around as far as the eye can see?
The reason I picked this title is that whenever it comes to what the American people really need, there is a recurring theme emanating from the White House. Whether it’s the 9 million in need of work that dropped out of the labor force completely while not being counted thus padding the 8.2% U3 unemployment statistics or those straddled with mortgage debt that need real relief; the recurring theme from this administration is that they just don't have the stomach for helping them in any significant way.
For instance, we desperately need a modern WPA type program. Economist Jared Bernstein, formerly of EPI and now at the CBPP, used to work for the VP. While he was still working there he brought the need for these programs to the White House’s attention. This was exactly the message relayed to him.
But then there’s this: There will be no WPA-type programs in our near future. There was no appetite for them in the Obama admin in the midst of the worst recession since the Great Depression and there’s a lot less now. The reasons for that are interesting and I’ll speak to them another day. But it ain’t happening.
That’s funny; I don’t have the stomach for this kind of disdain; disdain for the unemployed and their families during this jobs crisis. I can’t pretend this disdain not happening just because the other guy running for President will be technically worse. It should be noted though that a candidate as pathetic as Romney is now in a dead heat with President Obama.
That fact doesn't really say much for the quantitative Obama achievement list. We still do actually need qualitative solutions that begin to solve problems for the long term. Sorry. I can't pretend these life debilitating problems for the people don't exist because there is an election.
I can't pretend that all the continuing rhetoric and outright stupidity from both candidates when it comes to "dangerous and unsustainable deficits" is not a slap in the face to people who need work. By using this dangerous rhetoric about a deficit crisis it takes away the political tools to use fiscal policy to create the net jobs we need that have not been created at all to this date. This in turn it hurts people, especially the poor. It's insane and cruel.
To cut through this insanity, I recommend following and reading every diary Letsgetitdone has ever written. His diaries deserve the attention of Daily Kos. Modern Monetary Theory is a reality. This is how our system is constructed(since 1971) should we choose to actually use it to its potential to help people. Silly me, I think politicians propping up Neoliberal austerity fantasies about dangerous deficits and confidence fairies are insane and immoral.
You can acknowledge this or forever feign ignorance; real ignorance that hurts real people. It's as simple as that. And I personally don't have the stomach for it. I'm talking to you, Mr. President. I'm talking to you, Congress.
As I said, I can't forget the victims of mortgage fraud and foreclosure fraud. They were defrauded, enslaved, and chained to their deflating assets via debt deflation 101. None of the banks contractually working in tandem with the mortgage industry were held accountable at all for what was done to these victims of fraud. Vampire squid bankers and their Rubinite enablers in our government continue to suck up all of their income instead of it going into the economy. Martin Andelman lays out how this happened and why it still persists.
If a small group of individuals working within a nation’s government made a series of decisions that destroyed the economic security of tens of millions of the country’s citizens… decisions that literally cost thousands of lives, and in all likelihood shortened the life expectancies of hundreds of thousands more… failed to such a degree that it would be more than a decade before any recovery would be possible… then claimed economic recovery knowing that 93 percent of gains had gone to the top one percent… and they did all of this while failing to address the core issues that led to the crisis in the first place.What do you do? This scenario involves paying attention to “mean purist” data regarding a net jobless “recovery” for the 99% while the 1% get 93 cents out of every dollar making income inequality worse than during the Bush administration. 37 percent of the gains went to the 15,600 uber-rich households that make up the top one-tenth of one percent as well.
All this symbolic bluster for the Buffet rule that won't pass or do anything to significantly impact income inequality is more like a Buffer rule. Perhaps mainly prioritizing capital stock hoarded by the Barons of Finance Capital over the flow of income going to the 99% being spent in the economy was not a good tactic by this administration. Unlike the people of this nation, these Robber Barons actually have access to Obama’s Treasury and its revolving door; one that always has something in store for their future and futures, not ours. I guess we shouldn't be surprised.
I’ll now refer to something involving the 2012 election to make some of you happy. It drives these points home even further, anyway.
This past week, Kristin Roberts and Stacy Kaper, writing for the National Journal, documented the appalling story of the incomprehensible failure of the Obama Administration to arrest the damage being caused by the foreclosure crisis that’s still tearing through American families and households with the destructive force of a category five storm.The head of the nation’s largest Latino-rights organization deserves attention. After all, need I remind any of you that Latino voters were hit hardest by the Housing bubble? Does the White House think they have all Democratic constituencies in the bag? What makes the White House think they won't just stay home?
Roberts and Kaper began their article recounting a recent meeting at the Treasury Department, at which they said, civil-rights and housing advocates were “presenting a brutal reality check to President Obama’s Treasury secretary. The administration’s housing programs, they said, were ill-conceived, had failed woefully, and would be indefensible in an election year.”
Apparently, a woman by the name of Janet Murguia, president of the nation’s largest Latino-rights organization, gave Mr. Geithner an ultimatum:
“Make dramatic changes to your housing program, or the National Council of La Raza will be unable to carry Obama’s message to Hispanic voters in 2012.”
At a time when Republicans are bleeding support from Latino voters, it’s really quite daunting that Geithner never made a serious effort on this. Just as with the WPA and the unemployed, the Obama administration apparently just doesn’t have the stomach to help underwater home owners either hence the recurring theme.
The National Journal’s reporters, Roberts and Kaper, whose story titled, “Out of their depth,” I referenced near the beginning of this article, tells of an Obama Administration that, in their words, failed to help homeowners because it just “didn’t have the stomach for it.”There it is again. They just didn't have the stomach for it? What kind of message are we supposed to take from that in this election? What are underwater home owners supposed to think?
Their article starts out talking about the administration’s more recent posture as being determined to do something right about the foreclosure crisis… as follows…
“The turnabout followed three years of tepid, halfhearted, and conflicted policies driven by a desire among Obama’s most senior advisers to avoid political risks and insulate the financial sector from further losses. It was a disastrous approach that did little for a market in free fall or for the millions of Americans still underwater and facing foreclosure.The “task” as Roberts and Kaper phrase it, was not so terribly complicated that it was beyond these genius IQs’ abilities to do something right… something at least marginally effective in the eyes of America’s homeowners. They didn’t because they didn’t care to… and every single American homeowner who has paid the least bit of attention should recognize that as being the truth. My Lord… what do they need to do, come to your door and spit in your face? They didn’t because they didn’t care… and my problem isn’t even that… I could forgive them for that, somehow… not easily, but somehow.
National Journal spoke with more than two-dozen sources involved in creating and implementing the Obama administration’s many housing initiatives, from Election Day 2008 to the present. The result is a story of missed opportunities, competing priorities, out-of-whack expectations, and a few subtle, yet noteworthy, successes—all impelled at least as often by political, rather than economic, calculations.
The approach remains haunted by a primal decision made almost immediately after Obama’s economic team took office. Although the federal government would spend reams of cash to stanch, to some degree, the losses suffered by the financial sector, the auto industry, and state and local governments, suffering homeowners would see no such relief, at least not on a widespread basis. Their bailout never arrived. It appears that the administration simply didn’t have the stomach for it.”
My problem is that they still don’t care… and yes, I’m talking today… right now… headed into the election and clearly they still have learned essentially nothing about a crisis that’s plain as day, completely out of control.
Not only that, the Treasury department didn't even know what it was doing while demanding a rush into trial modifications based on verbal statements alone. So the Treasury Department wasn't anymore organized with how to handle loan paperwork than the banks were.
“A handful of core officials—at least one each from the White House, Treasury, and HUD—bought coffee and doughnuts and then wheeled chairs into an empty conference room. They listened to the loan servicers’ concerns and questions, discussed the complexity of their operations, and hammered home what servicers needed to do.This is a long piece, and though I don't endorse every point in it, it's well worth the read. I agree with most of it. It's not just the vampire squids and loan sharks, it's the lack of supervision. It's also who let them in the pool as well as who lets them stay there unsupervised to run amok.
One of the main questions centered on up-front documentation: Did Treasury want the process to happen so rapidly that servicers should put mortgagees into trial loan modifications based on verbal statements alone? Yes, the officials said. Don’t worry about the documents. Just put loans into the “trial mods” and then get the documents in order before the time comes to make the changes to the loan permanent, they said. “Just do it,” was the message.”
And you absolutely don’t instruct mortgage servicers that they should just put everyone into trial modifications with no systems, no training, no infrastructure and no real solid idea of what will happen next.
When you want companies to all do something that’s not in their financial best interests, that’s when government has to step in. For example, if you want cars to have safety belts or catalytic converters, you don’t just leave it to GM, Chrysler and Ford to figure it out… you pass legislation that mandates the adoption of such things because its been decided that they are for the good of our society.I think Geithner and Summers missed all sorts of shit. The President is unaware of that paper also. The Foreclosure Fraud settlement he bragged about, if you want to call that sham a settlement, still sucks as Yves Smith has outlined. Hell, the Mortgage Fraud Task Force is not even truly staffed despite the cheery propaganda released from Schneiderman's office.
That’s precisely what the Obama Administration has failed to do during this crisis… mandate what is best for our society, and instead its just been left to the for profit corporations to figure it out for themselves. And we’re surprised that didn’t work? Really? Why? Who thought it would, besides Larry Summers and Tim Geithner? Because for sure I could have told them it wouldn’t… saved everyone a lot of aggravation, to say nothing of several trillion dollars.
We tried the same thing during the Great Depression of the 1930s… a voluntary loan modification program, I mean. It’s true. Didn’t work then either, and the St. Louis Federal Reserve has a paper all about it. Do you think Geithner and Summers missed reading it?
Yesterday, the New York Daily News ran an article that chronicled how the much ballyhooed mortgage fraud task force was going nowhere fast. It quoted task force co-chairman Eric Schneiderman as saying that the effort had no staff and no executive director and the Justice Department confirming that the effort had no office.Former SIGTARP chief Neil Barofsky is a great barometer on what's legit or not. That's how we got the info on precisely how poorly TARP was handled. So since this is likely true, what does one do when even NY AG Eric Schneiderman no longer has the stomach to fight for you?
Existing mortgage investigation efforts and case development have been consolidated into the task force. The fact that that number appears to be only 50 is pathetic.
New York University law professor and former SIGTARP chief Neil Barofsky’s reaction:The comments reinforce concerns that I had when the Task Force was first announced, that it would just be a repository for existing cases around the country that would eventually be brought irrespective of whether a task force was formed or not. Of course, there is no need for a dedicated office or staff if all they are doing is rebranding existing cases as new “Task Force” cases. If that is the case, all they would really need is someone to craft the press releases and to stand on the podium to take credit for other people’s work, which, of course, is what most task forces do best.
Demand Schneiderman quit as said he would if things didn't pass the smell test and they don't. We already know Iowa AG Tom Miller is laughing at him and those paltry MERS carve out settlement sums are unlike what he boasted about. He needs to save his dignity. He needs to tell the truth about this inadequate settlement.
I've covered why the economics of getting this right are crucial if one cares about economic history, debt deflation, and demand side economics. Defending this failure is defending bad economics in general which involves people suffering in debt servitude with the compounded interest on top of that private debt wiping out whatever productivity gains working people produce in this country.
From a Justice viewpoint, this is equally important, because of the massive mortgage fraud, foreclosure fraud, and the human cost to all of this. To add insult to injury, the big fish behind the massive mortgage mortgage fraud have de facto immunity(based on the lack of enforcement and no change from the status quo) while it's actually stipulated now that foreclosure fraud is immune. And because of this sham settlement foreclosures are expected to pick up soon and no bankers will be going to jail while the working class are thrown out of their homes.
It's pretty indefensible. Making excuses for this shell game shows indifference or disdain for their pain. There is no respect for the rule of law or any functional Justice or economic system if one lets this go.
On a practical level, any parent of any kid should understand that if they don't enforce any real consequences for their children's actions, their authority doesn't matter. They will have no control over what trouble their children get into. The same things goes for our government ignoring corporate criminals and control fraud hucksters looting their companies, defrauding the public, and nakedly shorting it all except it's much more damaging on a massive global scale to society.
However, if your child commits a crime or even decides to protest Wall Street, he or she will go to jail, but bankers won't. There will be no opportunities for your children either unless there is a functioning system that punishes corporate crime and fraud. And right now thanks to Holder's feckless Justice Department, this system is not significantly punishing corporate crime or fraud thus creating a moral hazard.
Prosecutions and reestablishing the rule of law in our financial system should be a qualitative goal you can believe in. And yet you certainly cannot realistically put that one onto the Obama achievement list. If you could, it would dwarf every accomplishment on it put together.
Whether you want to think about it or not, the perpetrators of this crisis are free; they get free money from the Fed; money to buy elections and all elected officials in every branch. They're free to fill the Treasury with lobbyists from Goldman Sachs. That's indeed what we have witnessed over the last few years.
So what can we do when our President and our Legislature do not really have the stomach for us? Not much, so STRIKE on Mayday! Do whatever you can to support it. Also you should skip the middlemen in Congress, and if you own any shares at any of the big banks you should vote with those shares.
I'm sorry to ruin election season with the truth, but there it is.