Month: September 2011

Census: US poverty & uninsurance rates hit new highs

According to the US Census, poverty and uninsurance rates are at all-time highs.

The Census Bureau reports the number of Americans in poverty jumped to 15.1 percent in 2010, a 27-year high.

About 46.2 million people, or nearly 1 in 6, were in poverty. That’s up from 43.6 million, or 14.3 percent, in 2009. It was the highest level since 1993.

The number of people lacking health insurance increased to 49.9 million, a new high after revisions were made to 2009 figures. Losses were due mostly to working-age Americans who lost employer-provided insurance in the weak economy. Main provisions of the health overhaul don’t take effect until 2014.

It’s time for political elites to start paying attention to how much pain has already been inflicted on the poor, working, and middle classes of America in this economy. Stop with the deficit hawking, stop pushing austerity and the help American people now. People have felt more than enough pain for one economic downturn.

Alternatively, we can just embrace more austerity!

A bit on the Obama’s jobs speech

After the deficit deal passed a month ago, I made this prediction about the jobs pivot:

If I had to put money down, I’d predict that if any jobs bill moves forward, it will consist of more than 50% tax cuts, and probably more likely, a four or five to one ratio of tax cuts to stimulative spending measures.

Of the $447 billion in the jobs segment of Obama’s proposal, we have this breakdown:

O.K., about the Obama plan: It calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts.

Keep in mind that Obama is rolling out a two-part plan here. First, he previewed the American Jobs Act as a largely job creation piece of legislation. But within that preview, the President also made clear that he will pair this with a deficit reducing agenda that exceeds $1.5 trillion. From the speech:

The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I am asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan — a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.

Given that the GOP mantra, albeit wrong, has been that tax cuts reduce the deficit, it’s not hard to imagine there being further tax cuts emerging from the Super Committee. So at minimum, I was right about the lower bounds of the jobs pivot being at least 50% tax cuts. But this is just the proposal and what is passed (if anything passes) will likely look very different from what we heard last night. Obviously there’s plenty of time and space for the ostensible jobs bill to end up with an even greater majority going towards tax cuts.

The larger issue is that while I strongly support action around job creation (particularly in infrastructure spending and aid to states), the idea of paying for it by cuts to Medicare and Medicaid, let alone other federal social spending programs, is intensely unacceptable to me. While the President may have delivered the most forceful and passionate speech of his tenure in office, replete with genuine historical praise of past accomplishments of liberal governance, using it as a jumping off point for more deficit reduction and cuts to the social safety net is not only bizarre but dangerous. Cutting Medicare to save it is as intellectually honest and persuasive as bombing for peace or fucking for virginity. It just doesn’t work like that. And I can’t say playing the role of Cassandra makes me feel good, either.

Kilgore v Stoller

In Salon, Ed Kilgore responds to Matt Stoller’s piece on Obama’s destruction of the Democratic Party. Kilgore basically says that a primary of Obama isn’t likely because Obama still has strong support among base voters, though he looks at personal approval ratings, not the 32% of Democrats who want a primary. Kilgore also dismisses Stoller’s historic examples of past primaries of incumbents, essentially on the grounds that these happened a long time ago.

But what stood out to me in Kilgore’s piece was his explanation for why he thinks elite leaders of progressive institutions aren’t really unhappy with Obama. He writes:

While there has been plenty of angry grumbling about the administration’s performance in labor circles, there are no signs of “dump Obama” sentiment. Indeed, far from launching a big, dangerous foray into presidential nominating politics, many labor leaders are talking about a strategic shift into state elections where GOP governors and legislators are presenting a more visible existential threat to their constituencies and their influence.

The meaning of this shift towards local races is that labor leaders are choosing to take money that could be spent supporting Obama’s reelection and spending it elsewhere. It is a sign of base discontent and one that makes the chances of Obama’s reelection smaller. Given that one of Stoller’s main points that Kilgore is actually attempting to respond directly to is that Obama remains electable, this is not an effective example for Kilgore.

Like Stoller, I think the odds of there being one primary or many favorite son candidates is negligible. But Kilgore’s piece really doesn’t get at the reasons for that. If Kilgore really wanted to rebut Stoller from a fact-based place, he would cite the near-total capture of progressive interest groups by the Democratic Party. Absent an analysis focused on that, Kilgore really is just being dismissive out of hand towards a thoughtful and original analysis of the 2012 election and what Democrats could be doing to express their displeasure with Obama.

Press reaction: Rick Perry, shallow thinker

Reading some of the reviews of last night’s Republican presidential primary debate, I can’t help but praise the Washington press corps for the various, creative ways they say Rick Perry makes George W. Bush look like a strong candidate for the Fields Medal. Here’s a sampling:

Jonathan Chait, The New Republic:

Perry treats questions as interruptions. … His total liberation from the constraints of reason give Perry a chance to represent the Republican id in a way Romney simply cannot match.

Roger Simon, Politico:

What his answers sometimes lacked in logic was made up for in enthusiasm, and after some initial nervousness -he gripped the sides of his podium as if he were hanging onto a life raft – Perry settled down to his talking points.”

David Frum, Frum Forum:

I was shocked and surprised at how unprofessional Perry’s debate performance was. Nervous, irritable, stuttering, floundering, he missed opportunity after opportunity.
…
What confidence can anybody have that Perry will come to work as president any better prepared than how he come to this debate or that he’ll show more insight and intelligence than he did in this first national outing ? Not much.

Aaron Blake & Chris Cillizza, Washington Post:

One of those questions is whether he can survive the detailed policy discussions. Challenged Wednesday to talk about which climate scientists he most agreed with in his doubts about global warming, Perry stumbled through a pained response that included a comparison between global warming doubters and Galileo.

While doubting global warming won’t necessarily hurt him in a Republican primary, the exchange showed that Perry can get tripped up. While he may have clear the bar set for his first debate, he also showed he can stumble in a way that Romney has not.

Gail Collins, New York Times:

Rick Perry, possibly the first major presidential candidate opposed to the direct election of U.S. senators since the advent of the Bull Moose Party. He did not do anything superweird at his maiden presidential debate, unless you count bouncing up and down and cocking his head a lot. Or claiming that the reason a quarter of the Texas population has no health insurance is because of government interference.

Cross-posted from AMERICAblog Elections: The Right’s Field

Obama’s Power: Dems on deficit committee now want more than $1.5t in cuts

Originally posted at AMERICAblog

There is an emerging consensus amongst the Democrats who will serve on the deficit commission (aka Catfood Commission 2, Electric Class Warfare) that the mandate of $1.5 trillion in deficit cuts is insufficient.

Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they’ve been tasked with finding, in order to help offset some of those costs.“All of us would like to set as a target for ourselves even more than $1.5 trillion,” Rep. Chris Van Hollen (D-MD), who’s also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference.

For those not paying attention, President Obama (after Warren Buffett said it in his much-linked NYT op-ed) called for the deficit commission to go beyond $1.5 trillion in cuts. The Democrats on the commission, including liberals like Xavier Becerra, have moved to be where the President has been saying the commission should go. When Obama gives a speech tomorrow night (and a subsequent one in following days more specifically about deficit cuts), it will direct Congress as to where he thinks these cuts beyond $1.5 trillion should come from. Sadly, the answer seems to be Social Security, Medicare, and Medicaid.

David Dayen points out that this is a pretty clear rebuttal to the notion that the President is not capable of shaping the course of legislative and policy debates, especially with regard to Congress as a coequal branch of government.

If you listen to [Obama’s] public statements, he clearly wants this tax cut and spending cut agenda to go forward. And now, his Democratic colleagues on the Catfood Commission, even the putatively liberal ones like Xavier Becerra, are mimicking him. That’s because a President has a lot of influence and power.

Take this as a reminder that President Obama is not weak and certainly not dis-empowered from pursuing the agenda he wants to pursue.

Stoller: What Democrats can do about Obama

Matt Stoller in Salon:

Obama has ruined the Democratic Party.
…
So why isn’t there a legitimate primary challenger to Obama to make this case? Forty years ago, primaries were instituted in the Democratic Party as a response to party insiders having too much influence over nominations. These reforms were implemented before the prevalence of money in politics was as extreme as it is now. At this point, primary challenges are so expensive that a serious 2012 campaign would ironically require support of party insiders for viability. The party, inflexible as it was in 1968, is perhaps even more rigid today. As a result, no candidate has stepped up to challenge Obama in a primary, even though 32 percent of Democratic voters want one.

This is an institutional crisis for Democrats. The groups that fund and organize the party — an uneasy alliance of financiers, conservative technology interests, the telecommunications industry, healthcare industries, labor unions, feminists, elite foundations, African-American church networks, academic elites, liberals at groups like MoveOn, the ACLU and the blogosphere — are frustrated, but not one of them has broken from the pack. In remaining silent, they give their assent to the right-wing policy framework that first George W. Bush, and now Barack Obama, cemented in place. It will be nearly impossible to dislodge such a framework without starting within the Democratic Party itself.

Stoller’s emphasis on the role party insiders can play in taking action here is insightful. There is no need for acquiescence. Stoller suggests first that party leaders run as favored son candidates, sparking energy and discussion in different geographies that opens the door for a real discussion about the direction the base wants the party to go in and who we want to lead us there:

Harkin could run as a “favorite son” of Iowa, and encourage people in the caucuses to send a message to the party and to Obama by choosing him. Other candidates could then emerge in early primary and caucus states, as a way of repudiating Obama’s leadership. Candidates wouldn’t have to pretend to be running for president or be presidential quality; they could simply stand in as favorite sons or daughters of their own geographic area. This would immediately fire up a highly aggressive and needed debate about the direction of the Democratic Party and the country at large. It would build a new set of leaders, and elevate others who would like to distance themselves from the Obama policy agenda.

In a few months, we’ll know better if Obama still looks like a loser next year. If he does, that does not mean the Democratic Party must follow him down the path to oblivion.

He concludes:

Political parties need to be flexible enough to allow for new ideas to come into the process, or else third parties or civil disorder are inevitable. All it would take to provide this flexibility are well-known Democratic elders who understand that rank and file Democrats deserve a choice, and a few political insiders who realize that they can increase their own power by encouraging a robust debate. I don’t think this will happen. But just imagine if it did.

I think this is exactly right. I’m really not afraid of the consequences of a primary. I don’t think something that 32% of Democratic voters want is fringe – it’s a legitimate idea, and one has achieved that legitimacy without a single party insider, media figure, or liberal leader advocating for it. If a primary challenger were able to emerge and beat Obama from the left, that person would offer voters a real choice of vision for how to right the economy and rebuild the middle class. If primary challengers emerged, but failed to knock Obama off of the top of the ticket, then at least the base had a choice in opposition and made it with their vote.

One element Stoller doesn’t address is that Obama’s poll numbers are weak now. There’s a very real chance that no only will he have taken the Democratic Party far to the right, but that he’s not even going to win reelection, ensuring four to eight years of Republican rule (which may well be similar to what we have, but without the whimsy). But there is recent history of the Democratic Party forcing an incumbent to not run for reelection due to poor polling: the 2010 Senate race in Connecticut, where poor polling lead the administration and party leadership to not only encourage Chris Dodd to not run again, but were recruiting an alternative candidate while Dodd was still running. Dodd did what was probably best for the party and stepped down in a timely fashion and Democrats were able to hold the seat. While there may or may not emerge primary challengers to Obama, there also may need to be a discussion not about his candidacy on ideological grounds, but his candidacy on electability grounds. I don’t expect that there will be this degree of critical introspection within the administration, but if there ways, very interesting things could happen that might not otherwise be possible.

WaPo ed board dishonestly attacks Schneiderman

The conservative Washington Post editorial board has weighed in on the settlement talks between banks and fifty forty-six state attorneys general around robosigning. Oddly the WaPo blames New York Attorney General Eric Schneiderman for the foreclosure crisis, because he wants to investigate what is happening and prosecute any illegal actions by the banks. The WaPo ed board basically wants a quick settlement so they can move on with as little damage to banks as possible (undisclosed coincidence: Warren Buffett owns a big piece of the Washington Post, as well as Bank of America and Wells Fargo).

But beyond the usual dishonesty that goes along with any pro-banker screed around foreclosure and securitization fraud, the Post’s editorial board just makes up a few facts in their attack on Schneiderman:

The majority of the other attorneys general, led by Tom Miller of Iowa, have kicked Mr. Schneiderman out of the negotiations, accusing him of making excessive demands. Mr. Schneiderman protests that the banks are to blame, for trying to use the robo-signing case to get immunity they could use on the securities front. Mr. Miller and his colleagues respond that they have no intention of letting the banks off that particular hook.

First, Miller kicked Schneiderman off of the executive committee unilaterally. There was no vote of other AGs, at least according to, ahem, the Washington Post.

Second, and more importantly, Miller is offering the banks a release around securitization fraud. Shahien Nasiripour at the Financial Times reported on Monday night:

State prosecutors have proposed effectively releasing the companies from legal liability for allegedly wrongful securitisation practices, according to five people with direct knowledge of the discussions.

As we’ve seen before, when the banks send their allies out to attack Eric Schneiderman, there is little regard to the truth.

A Republican insider takes on both parties

Via John Aravosis, this piece at Truthout by Mike Lofgren, a thirty year veteran Republican staffer, is an interesting read. Lofgren claims he resigned recently after watching the GOP get taken over by lunatics (his word) like Michele Bachmann, Allen West, Patrick McHenry and Steve King.

This passage stands out:

A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress’s generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner.

Lofgren astutely notes the media’s complicity in this sabotage, through the devolution of journalism from a noble profession practiced by talented individuals to a medium defined by false equivalencies and “he said, she said” reporting.

While Lofgren’s critique of his own party is devastating, his analysis of the failings of the modern Democratic Party is also insightful.

What do the Democrats offer these people? Essentially nothing. Democratic Leadership Council-style “centrist” Democrats were among the biggest promoters of disastrous trade deals in the 1990s that outsourced jobs abroad: NAFTA, World Trade Organization, permanent most-favored-nation status for China. At the same time, the identity politics/lifestyle wing of the Democratic Party was seen as a too illegal immigrant-friendly by downscaled and outsourced whites.

While Democrats temporized, or even dismissed the fears of the white working class as racist or nativist, Republicans went to work. To be sure, the business wing of the Republican Party consists of the most energetic outsourcers, wage cutters and hirers of sub-minimum wage immigrant labor to be found anywhere on the globe. But the faux-populist wing of the party, knowing the mental compartmentalization that occurs in most low-information voters, played on the fears of that same white working class to focus their anger on scapegoats that do no damage to corporations’ bottom lines: instead of raising the minimum wage, let’s build a wall on the Southern border (then hire a defense contractor to incompetently manage it). Instead of predatory bankers, it’s evil Muslims. Or evil gays. Or evil abortionists.

How do they manage to do this? Because Democrats ceded the field. Above all, they do not understand language. Their initiatives are posed in impenetrable policy-speak: the Patient Protection and Affordable Care Act. The what? – can anyone even remember it? No wonder the pejorative “Obamacare” won out. Contrast that with the Republicans’ Patriot Act. You’re a patriot, aren’t you? Does anyone at the GED level have a clue what a Stimulus Bill is supposed to be? Why didn’t the White House call it the Jobs Bill and keep pounding on that theme?

You know that Social Security and Medicare are in jeopardy when even Democrats refer to them as entitlements. “Entitlement” has a negative sound in colloquial English: somebody who is “entitled” selfishly claims something he doesn’t really deserve. Why not call them “earned benefits,” which is what they are because we all contribute payroll taxes to fund them? That would never occur to the Democrats. Republicans don’t make that mistake; they are relentlessly on message: it is never the “estate tax,” it is the “death tax.

Lofgren actually mistakes inept messaging with desired political outcomes, while simultaneously missing the real point of the DLC-made Democratic Party’s free trade policies. Give voters too much passion from the government as a source of job creation and health care, and they’re bound to want more. But that’s not what the corporatists in the right of the Democratic Party want, so they don’t push for it. Obama and many conservative Democrats are pushing for cuts to the Big Three social support programs. They don’t want there to be an estate tax, because they don ‘t want their rich donors to be taxed. So when Lofgren writes, “The GOP cares solely and exclusively about its rich contributors,” it’s also the case that the same could be said for many, many conservative Democrats.

Lofgren’s piece shows him as someone who is outraged by what is happening in an America where one of two political parties is hell-bent on destroying government. But his analysis of the other party is centered around political cravenness, giving no real attention to the rightward shift of controlling Democratic ideology. In the end the problems don’t necessarily arise from one party dashing to the right, but the other moving along with it. In that sense, no choice is preserved for voters and thus the people who make the move to shift to the frame of acceptable debate are the ones who win out over time.

Lofgren spent 28 years working on at the House and Senate Budget Committees. I’m sure he has seen an evolution in how the Democratic Party operated and how the increased influence of first the DLC and then Third Way shifted the Democrats to the right, while a similar shift was ongoing in his party. It would be interesting to see him write about that narrative, now that he’s established himself as a smart, credible critic of government and politics in the 21st century.

FHFA To Sue Big Banks for Investment Putbacks

The New York Times is reporting that the FHFA, the agency which oversees Fannie Mae and Freddie Mac, is planning on suing twelve major banks today or Tuesday, accusing the banks of “misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble.”

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

Until the suit is filed, we won’t know exactly how much money FHFA is seeking to get from the banks. This move is in a similar mold to other efforts to putback loses onto the banks, thereby reducing the liabilities  incurred by Fannie and Freddie. FHFA administrator Ed DeMarco, a holdover from the Bush administration, has pursued this strategy for a while now. The statute of limitations on filing this sort of securitization lawsuit expires this coming Wednesday, so there’s some sense that this is happening now to get any action in under the wire.

The banks and their surrogates are trotting out the idea that Fannie and Freddie are sophisticated investors, who should have been able to tell that things Standard & Poors rated as AAA were not in fact anywhere near AAA quality investments.  I’m not clear how well the, “They should have known we were peddling junk and were just paying ratings agencies to say it wasn’t” defense will play out in court. The problems with securitization go far beyond what the Times describes, with many of these securities put together while the underlying loans were already delinquent, in foreclosure, in bankruptcy or already owned by the banks. Hopefully FHFA comes out with big numbers in their lawsuit that adequately reflect the scale of the securities fraud committed by these banks and seek restoration, as well as punishment, for this fraud.

Banks still fabricating documents in foreclosure fraud

For those not paying close attention to this issue already, it may be news to you that despite being outed a year ago for using the practice of robosigning to fabricate thousands of documents used to foreclose on homeowners, banks are still using this practice today. American Banker:

Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.

The practice continues nearly a year after the companies were caught cutting corners in the robo-signing scandal and about six months after the industry began negotiating a settlement with state attorneys general investigating loan-servicing abuses.

Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.

David Dayen explains what this means:

And you see, the banks HAVE to fabricate documents. Because they destroyed the private property system through improper and sloppy securitizations and lost or missing mortgage assignments during the bubble years, and as such they cannot prove standing to foreclose without lying. Robo-signing is a crime, but it’s also a cover-up for a much bigger crime, which involves MERS and improper mortgage transfer and securities fraud. The robo-signed, forged, fabricated documents are the smokescreen being used to foreclose and get the real problem off the books. Banks are trying to wriggle off the hook by saying they are merely “memorializing” past actions with the fake documents. Some courts aren’t buying it; the pooling and servicing agreements stipulate that all assignments showing transfers must take place within 60 days, not years later through “memorialized” actions.

What this really comes down to is that making a settlement with banks around robosigning now, while there has been no real investigation by the state law enforcement officials who are negotiating a settlement and while the practice is continuing as the negotiations go on, is dangerous and premature. The banks can’t possibly be negotiating in good faith with Tom Miller and the other state AGs because they’re still committing the crimes they want to be released from prosecution for!

There’s a massive criminal scheme being revealed by the press and a handful of diligent public officials like Attorneys General Eric Schneiderman, Catherine Cortez Masto and Beau Biden, as well as county Registers of Deeds like Jeff Thigpen in North Carolina and John O’Brien in Massachusetts. These officials seem committed to pursuing investigation and accountability. It’s time their peers get on board.