What was prevented?

Michael Moore’s Capitalism: A Love Story includes a speech by President George W. Bush, September 24, 2008, in which he says:

The government’s top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.

And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.

Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And, ultimately, our country could experience a long and painful recession.

Fellow citizens, we must not let this happen. I appreciate the work of leaders from both parties in both houses of Congress to address this problem and to make improvements to the proposal my administration sent to them.

Looking at this passage from President Bush’s speech explaining giving at least $700 billion to the financial secretary, I just thought it worth noting that all of the things that Bush said action would prevent from happening happened anyway. We did experience financial panic. Banks failed, both huge institutions and many more community banks. The stock market dropped (though it’s now back). Foreclosures were and are epidemic. Businesses closed and even today we have over 14 million people unemployed. It’s hard for individuals and small businesses to get loans. And we are in the midst of a long and painful recession. Oh and instead of $700 billion, more realistic explanations of all the various ways the federal government bailed out Wall Street banks is closer to $13 trillion dollars. The only thing that was prevented was the degradation of Wall Street profits and bonuses. Not only did this fail to come with the preservation of an economy that worked for the bottom 99% of America, but it didn’t even come in exchange for a meaningful increase in regulation and oversight of the financial industry. What an epic, hurtful, damning disaster.

“It is in fact taking place”

Yves Smith highlights a tragic piece in the New York Times about the human cost of foreclosures:

There’s a sad little story in the “NY/Region” section of the New York Times, which illustrates a not often enough discussed sort of wreckage resulting from the housing mess: that of deaths resulting from foreclosures.

Think I’m exaggerating? There have been cases of suicides, or murder/suicides of people losing their homes. But that can’t necessarily be attributed to foreclosure per se, but of personal financial disaster, with the foreclosure being the literally fatal blow. So while one can attribute their deaths to the financial crisis and therefore to the reckless behavior of major financial firms, it’s hard to pin it on foreclosures per se.

But there are some deaths that can, indisputably, be blamed on foreclosures or more specifically, the negligent management of foreclosed properties. No one should ever die because a bank failed to take proper care of a home it seized. This, just like banks seizing houses that have no mortgages on them, should simply never happen. But it is in fact taking place. [Emphasis added]

Yves’ post goes deep into how mortgage servicers are failing as property managers, as does the Times’ piece. Children are dying in Florida, falling into swimming pools of foreclosed houses and drowning. In New York, buildings which servicers are failing to keep up to code are becoming death traps. The blight of foreclosures is being added to by the blight of unkept houses – broken windows, peeling paint, un-mowed lawns, and trash in yards all reduces the value of entire neighborhoods. The point is that the extraction of money through fees and foreclosures by servicers destroys lives. It has real consequences. And, at the end of the day, no one with power is doing anything to try and stop the human damages of foreclosure fraud and foreclosure crisis.

On Birtherism

I really agree with David Dayen and Baratunde Thurston (see above) in their analysis of the President releasing his long form birth certificate yesterday and what it means about the state of affairs in our country.


And I do think the spectacle of an American President having to debase himself to confront conspiracy theorists registers as a low moment in American politics and a signal of US decline. Not just because of what it says about the media, and the hash they’ve made of the public square over the years. The press is nuts, and they’re not even the press – if by that term you mean the organizations who disseminate important information to ensure a well-informed citizenry.

But more important, I think that this marks the end of anyone calling this a post-racial society. Because this entire issue revolves around race, about the alien aspect of a black man in the White House. The comments telling Obama to get off the basketball court is part and parcel of the same thing. Basically, you have a subset of this country who will never see a black man as an American.

A number of people pointed out that yesterday felt like a return to the Clinton years, where any charge against the President would be treated as valid and worthy of widespread discussion in the media. But I think Baratunde makes clear that while that is certainly happening, the racial backdrop of it happening to this President in this day is much more tragic. This isn’t about politics, it’s about race. I never bought the idea that the election of Barack Obama made America a post-racial society, but I’m sure plenty of people not only held it but were comforted by it. We have a lot of work to do and I think no small part of it will involve shaming the racists and bigots who carried out this campaign against the President and the hacks who pushed it to drive up their ratings or their bosses approval rate.

Elizabeth Warren on The Daily Show

Bankers Moving Away from Dem Giving

While it’s hardly a new story, the Wall Street Journal has a piece today showing a fairly dramatic move of campaign contributions away from Barack Obama and the Democratic Party. In 2008, Wall Street gave heavily to Obama and the Democrats. It wasn’t surprising – the Democratic Party was ascendant, Obama was an easy pick to win the White House, and Wall Street wanted to be on the right side of political momentum. 2010 saw a huge swing back to the Republicans, as their path to controlling the House was obvious. The real question now is whether Wall Street will swing its money back towards Obama, who doesn’t face a serious Republican challenger yet, or if they’ll hedge their bets andsplit the difference.

What’s worrisome about this story is that it’s old news, but is timed around a major debate on the debt ceiling, the budget deficit, and the fiscal outlook of the US government. It’s laced with the implication that Obama needs to be nice to Wall Street for political reasons, regardless of the actual dynamics of bankers front-running to grease political friendships. With the mantra of “Obama has to be nice to business” being repeated by elites in Washington for two-plus years already, I have to see this story as simply something which adds fuel to that fire.

The reality is that Wall Street financiers will give money to the people they think will win a given election. Contributions are, for the most part, not about actual ideological agreement. It’s about staying on the winning team. Hopefully Democrats don’t take this WSJ piece at face value and start seeking out new and innovative ways to coddle Wall Street donors.

Krugman on Taxes

Paul Krugman has a very good column today looking at the dishonesty in arguments put for by austerity-hawks like Paul Ryan, who push for tax cuts that will certainly increase the deficit while claiming to care about reducing the deficit. Krugman contrasts Ryan’s budget insanity (and President Obama’s better, but still misguided budget) with the proposal from the Congressional Progressive Caucus.

[T]he only major budget proposal out there offering a plausible path to balancing the budget is the one that includes significant tax increases: the “People’s Budget” from the Congressional Progressive Caucus, which — unlike the Ryan plan, which was just right-wing orthodoxy with an added dose of magical thinking — is genuinely courageous because it calls for shared sacrifice.

True, it increases revenue partly by imposing substantially higher taxes on the wealthy, which is popular everywhere except inside the Beltway. But it also calls for a rise in the Social Security cap, significantly raising taxes on around 6 percent of workers. And, by rescinding many of the Bush tax cuts, not just those affecting top incomes, it would modestly raise taxes even on middle-income families.

All of this, combined with spending cuts mostly focused on defense, is projected to yield a balanced budget by 2021. And the proposal achieves this without dismantling the legacy of the New Deal, which gave us Social Security, and the Great Society, which gave us Medicare and Medicaid.

Of course, the fact that Progressives have the most serious budget proposal, which targets those who can most afford to give up more while preserving programs that help keep people out of poverty, is ignored by most of the DC press corps and Beltway politicians. I’d say this is simply because elites don’t care about the deficit and do care about doing whatever possible to transfer wealth from working Americans to the rich. The deficit hysteria is kabuki theater meant to mask new and more efficient ways to having the US government become an Anti-Robin Hood, who steals from the poor to give to the rich. Krugman arrives at a somewhat more measured assessment:

The answer, I’m sorry to say, is the insincerity of many if not most self-proclaimed deficit hawks. To the extent that they care about the deficit at all, it takes second place to their desire to do precisely what the People’s Budget avoids doing, namely, tear up our current social contract, turning the clock back 80 years under the guise of necessity. They don’t want to be told that such a radical turn to the right is not, in fact, necessary.

I just don’t think there’s any actual concern about necessity on the part of austerians. Necessity is an argument, an appeal that seeks to avoid discussion and debate of more serious (read: the CPC) plans that might inflict the most superficial of pains on the rich. The larger question to me is what does it mean that the CPC can produce such a serious, effective proposal and leaders of the Democratic Party completely ignore it?