Author: Matt Browner Hamlin

http://holdfastblog.com

Will Bunch on Obama’s Kill List

Will Bunch makes a very powerful and provocative point regarding President Obama’s radically reduced definition of civilians by making “all military-age males in a strike zone as combatants.” Moreover:

Counterterrorism officials insist this approach is one of simple logic: people in an area of known terrorist activity, or found with a top Qaeda operative, are probably up to no good. “Al Qaeda is an insular, paranoid organization — innocent neighbors don’t hitchhike rides in the back of trucks headed for the border with guns and bombs,” said one official, who requested anonymity to speak about what is still a classified program.

Bunch writes:

As for the morally indefensible position that any male killed in such an attack is “probably up to no good,” isn’t the Obama administration saying the EXACT same thing that George Zimmerman said about Trayvon Martin?

Ponder that for a moment.
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Actually, the similarity with Zimmerman is even greater than I first thought. What he said to the Sanford police dispatcher was that Trayvon Martin “looks like he’s up to no good.” Thank God Zimmerman didn’t have drones, huh?

To be clear, when Zimmerman says this it is racist and outrageous. When President Obama and his security apparatus adopt this as policy, it is just as racist and outrageous.

Donovan taking credit for NV legislation?

In an op-ed in the Las Vegas Review-Journal which is largely about refinancing tools, HUD Secretary Shaun Donovan gives the Obama administration a heavy does of credit for a recent drop in Nevada foreclosure filings.

Too many homeowners in Nevada are still underwater or struggling to meet their mortgage, but the state has made real progress. Thanks to tools this administration has provided, foreclosure filings throughout the state have fallen 67 percent since last April.

Unfortunately it looks like the Obama administration is claiming credit for something they have zero right to. Last November, after Nevada passed an anti-robosigning law, foreclosures dropped 88%. The law made robosigning illegal, making it functionally impossible for banks to foreclose on the overwhelming majority of homeowners. That had less than nothing to do with the Obama administration.

Foreclosure filings in Nevada plunged in October during the first month of a new state law stiffening foreclosure-processing requirements.

Slightly more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by ForeclosureRadar.com, a real-estate website that tracks such filings. Default notices represent the first step in processing foreclosures.

Nevada’s state Assembly passed a measure that took effect on Oct. 1 designed to crack down on “robo-signing,” where bank employees signed off on huge numbers of legal filings while falsely claiming to have personally reviewed each case. Banks suspended their foreclosure filings one year ago and have gradually restarted them after those and other improper foreclosure-processing practices surfaced.

Among other steps, the Nevada law makes it a felony—and threatens to hold individuals criminally liable—for making false representations concerning real estate title. Individuals are also subject to civil penalties of $5,000 for each violation.

Foreclosures stopped because banks in Nevada can’t prove that they have a right to foreclose on Nevadans without running risk of going afoul of this law. Felonies are serious things and most bankers and their attorneys don’t want to go to jail for fraudulently foreclosing on someone. That’s the biggest reason foreclosure filings are down in Nevada and it has nothing to do what little the Obama administration has done on housing.

Obama’s kill lists

Lots of pixels are justifiably spilled today following a long, detailed article in the New York Times about the Obama administration’s use of kill lists, drone attacks, and other extrajudicial tactics for fighting perceived enemies. Except, of course, we find out that in this case enemies include any military age men in an area where we think Al Qaeda or other terrorists are operating and we can’t prove after the fact that they weren’t in fact terrorists. I highly recommend reading Glenn Greenwald, Charles Pierce, Scarecrow, Digby, David Dayen, and Marcy Wheeler.

I don’t have a lot to add beyond what the folks linked above have written. It’s all just so painfully outrageous and infuriating that this is being done in our name, let alone by a Democratic constitutional law professor, let alone by a Democratic constitutional law professor who used to oppose these things as a candidate for higher office. I will say this: if Mitt Romney wins in November, Democrats will at least go back to opposing things like extrajudicial killing, rendition, indefinite detention, warrantless wiretapping of Americans, and on and on and on.

OFA & Teachers’ Unions

Stephanie Cutter is OFA’s Deputy Campaign Manager. She tweeted:

@stefcutter FACT CHECK: Romney off on Obama’s relationship with teachers’ unions; it’s anything but cozy: //wapo.st/Lu0nYZ

The article she links to is an AP fact check that outlines how Mitt Romney is wrong to say Obama is cozy with teachers’ unions. From the article:

ROMNEY: “President Obama has been unable to stand up to union bosses — and unwilling to stand up for kids.”

THE FACTS: Several of the core tenets of the Obama administration’s signature education initiative, the Race to the Top competition, are policies first heralded by Republicans and are in opposition to the steadfast positions of teacher unions on topics like school choice and merit pay for teachers.
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At its annual meeting last year, the National Education Association, the country’s largest teachers union, sent a message to Obama that it was “appalled” with Education Secretary Arne Duncan’s practice of focusing heavily on charter schools, supporting decisions to fire all staff and using high-stakes standardized test scores for teacher evaluations, along with 10 other policies mentioned.

“Obama has taken on teachers unions unlike any previous Democratic president,” said Tom Loveless of the Brookings Institution. “Because of that his support among union members, although it is still there, is rather tepid.”

And again, this is an article that Cutter linked to approvingly.

Of course, Cutter is absolutely correct. Obama is not cozy to teachers’ unions. But the fact that the campaign is openly campaigning on the lack of support for workers shows they think unions are totally captured punks who won’t stop their support of Obama, even in the face of public humiliation like this. And, of course, OFA is right.

Update:
Following pressure by pro-worker progressives on Twitter, Cutter has responded with this:

Pres. fights for unions/teachers b/c he believes in them-Mitt dishonest about being beholden to them MT@nitalovesmiles LAME.Explain yourself

Well Cutter certainly did a poor job expressing this. The article Cutter linked to does a pretty good job of showing how the administration’s education policies demonstrate real differences with teachers’ unions. These are differences manifested in concrete policy choices and frameworks for how they think about education. President Obama may way make the occasional good speech to a union audience, but his administration’s actions, especially around teachers’ unions, don’t really come close to his rhetoric. As is so often the case with this President, you are forced to ask, “Who am I going to believe: him or my lying eyes?”

When I read the fact check, I didn’t say, “Wow this is bad reporting,” I said, “Yep, that’s about right.” Staying within the GOP frame is not bad politics here (though it may be that too), it’s that the administration doesn’t have the policy record supporting statements outside the GOP frame.

A different sort of Third Way

Matt Stoller, again writing at Naked Capitalism, makes this observation about narratives from the left and right about President Obama:

There are two broad narratives about Barack Obama from American elites.  On the right, there’s a racist narrative about Obama’s socialist Kenyan origins, with offshoot dishonest arguments about his policies.  He’s anti-corporate!  He’s gone on a government spending frenzy!  He’s going to cut the size of the military!  These are not true.  On the Democratic side, there’s an equally dishonest set of arguments.  He’s not bold enough!  Congress is holding him back from his progressive instincts!  We haven’t made him do what we know he wants to do!  The real Obama is hidden behind a racist veneer on the right, that he’s a Kenyan socialist, and a fake narrative on the left, that he’s not bold enough.  The third narrative, which you can find on this blog, is that Barack Obama is a great deceiver, with a charming and cool demeanor that mask his ruthlessness and bank-friendly neoliberal ideology.  It’s hard to talk to this third narrative, because Democrats overwhelmingly approve of Obama, and Republicans simply cannot countenance the idea that their socialist enemy is as friendly or even more friendly to corporate power than they are.

The occasion for Stoller’s observation is the promotion of former TARP Special Inspector General Neil Barofsky’s new book, Bailout, which is due out next month. The post cites Barofsky’s book, as well as Inside Job director Charles Ferguson’s new book, Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America, as key pieces getting at this largely rare narrative on Obama. I’ve yet to read either book, but given who the authors are I expect they should both be well argued and effective at raising up this narrative to the level of discussion in national circles.

The absence of a desire for strong regulators

Matt Stoller, writing at Naked Capitalism, has a really important observation about the two political parties and their shared lack of desire to have strong regulators looking at the banking sector.

The hearing was about District Court Judge Jed Rakoff’s refusal to sustain the Citigroup settlement with the SEC.  What was interesting about it, from a political standpoint, is that all three witnesses, including the witness brought in by the Democrats, opposed Rakoff’s move and supported the SEC’s position.  And one of the top Democrats on the committee, Carolyn Maloney, gave a long-winded opening statement in which she basically took the position that forcing an admission of wrongdoing was just too hard.  In other words, many high-level Democratic politicians, for all their gnashing of teeth about the need for regulation, aren’t being truthful.  They don’t want regulation, they want to be seen as wanting regulation.  And the Republicans, while they want to be seen as the party against regulation, are actually quite happy having regulators they can work with, regulators who protect the banks from state or local level action.

The argument over regulation or deregulation, in some sense, misses the point.  We need regulation, obviously.  But we also need strongly principled regulators.  And neither Barack Obama nor Mitt Romney has any appetite for that.

Stoller’s observation is important in that it crystallizes the sentiment of both parties being captured by Wall Street in an operationally specific way. And in Stoller’s telling, it’s hard to not come away with the impression that the Democrats are a good deal more cynical than the Republicans on the issue of regulation.

Banks have no right to profit

Yves Smith:

Preventing blow-ups like the JPMorgan “hedge” that bears no resemblance to any known hedge isn’t difficult. What makes preventing it difficult is that banks that exist only by virtue of state-granted charters — and more recently, huge transfers from the public — have persuaded public officials and regulators that they have a God-granted right not just to high levels of profit but also high levels of employee and executive compensation.
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Maybe it’s time to recognize that these firms are too big and in too many complex businesses to be managed. Jamie Dimon was touted as a star who could supervise a sprawling firm running huge risks, and he fell short because no one can do the job adequately. A less disaster-prone financial system requires more simplicity and redundancy. Re-instituting Glass-Steagall or other variants on the narrow banking theme isn’t a full solution, but it would make for a good start.

Strings need to be attached to entities that exist solely because public funds are used to support them and guarantee them. When the auto industry was bailed out, it came with strict supervision and oversight. That makes sense. What is completely nonsensical is that no similar oversight and expectation was put on the banking sector after 2008’s financial collapse.

Debunking Glass-Steagall Pushback

There has been a recent push by Wall Street’s defenders to undermine public support for the return to Glass-Steagall, the Depression era law which banned federally insured commercial banks from doing investment banking. The issue has come to light following the JP Morgan Fail Whale trades and the recognition that even the weak Volcker Rule in Dodd-Frank would be insufficient restraint for banks which failed to learning anything from the 2008 financial collapse (well, other than both political parties will bail them out with no change in behavior expected in return).

Aaron Ross Sorkin of the Times’ Dealbook does the yeoman’s work for Wall Street, pushing a bogus attack on Glass-Steagall. Sorkin’s  argument is that the collapse was driven by investment bank failures and had nothing to do with commercial banking, therefore there is no need to separate risky investment banking from commercial banking:

But here’s the key: Glass-Steagall wouldn’t have prevented the last financial crisis. And it probably wouldn’t have prevented JPMorgan’s $2 billion-plus trading loss. The loss occurred on the commercial side of the bank, not at the investment bank.

But this isn’t the point and Dean Baker nails Sorkin on it.

The crisis, which is an “economic crisis” not a “financial crisis” was caused by the collapse of an $8 trillion housing bubble. This bubble was driving the economy by sparking both a construction boom and a consumption boom. When house prices came back down to earth, these sources of demand evaporated and there was nothing to replace them. It’s a fairly simple story for those of us who learned arithmetic back in third grade.

Glass-Steagall played no direct role in the crisis or the buildup to it. Nonetheless, it does get to heart of one of the big unnecessary freebies that the government gives to the financial sector. The point of the law was that if you held government guaranteed deposits then there should be restraints on the sort of risks you can take.

Americans for Financial Reform gets at the restraints on risk as well:

Problems in the mortgage market triggered the collapse because of a vast structure of financial market trades based indirectly on the value of those mortgages. That structure included trillions of dollars in synthetic derivatives bets (synthetic CDOs), as well as trillions of dollars in short-term (overnight) funding tied directly to traded valuations. That was the structure that collapsed and took the economy down with it.

Second, no one is trying to – or could – ban risk from banking. The goal of the Volcker Rule is instead to change the form and location of risk. The rule moves one particular type of risk –proprietary speculation in the financial market ‘casino’ – out of the giant banks at the center of the economy and into smaller hedge funds and other speculators who can fail without threatening the system. The Volcker Rule permits banks to continue risk taking in the form of lending and investment, as well as low risk forms of market making.

There’s pushback by Wall Street allies on both the Volcker Rule and Glass-Steagall because Wall Street was caught with its pants down on the Fail Whale trade. The Volcker Rule is weak and not even in effect, but Wall Street has spent months and millions of dollars lobbying for its repeal. Want proof that the push back is about repealing pending regulations? Look no further than what one Wall Street lobbyist told Politico:

How much has the JPM trading loss changed the lobbying landscape around Volcker and the rest of Dodd-Frank? One top industry hand told M.M. last night: “It just blew up everything I’ve been working on.”

Get that? The Fail Whale exposure has caused it to become harder for Wall Street lobbyists to get Congressional members,  staff  and regulators to go along with the gutting of regulations which haven’t even been put in place yet. Thus we see Sorkin out to carry water for those who want to make regulation of the banking industry irrelevant. I will say this about the banksters, they don’t have an ounce of shame.

Elizabeth Warren comes out swinging on financial accountability

Last year liberals found a small handful of state Attorneys General to elevate as heroes for their efforts to investigate robosigning and hold banks accountable for committing foreclosure fraud. That cohort, which eventually acquiesced to the Obama administration and got on board a very weak settlement deal with the nation’s five largest banks, included New York AG Eric Schneiderman, NV AG Catherine Cortez Masto, and DE AG Beau Biden, among others. Schneiderman’s status as a liberal hero is now seriously being called to question by people who had previously put a lot of faith in him, myself included. Part of my takeaway from the last year is that while elected officials and candidates should be leading on these issues, words aren’t enough. Actions are what will determine whether or not these people are worthy of inspiring hope.

With that as a preface, Elizabeth Warren is on something of a tear going after the failures of recent regulatory reform and ostensible accountability efforts to adequately rein in Wall Street recklessness and criminality. She told Politico that Jamie Dimon should be removed from the New York Federal Reserve’s Board and sees the JP Morgan Fail Whale trade as a complete failure of regulatory reform:

“The argument for Glass-Steagall is that banking should be boring. Risk-taking should be separated from ordinary consumer banking. Banks are different from every other kind of company. They hold our money in trust and they get government guarantees. That fundamentally changes the game. The trade-off is they agree to engage in only low-risk activities. JPMorgan just showed that is not what they are doing.”
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“I find it very interesting that at first the defenders [of JPM] said ‘Well, even if the Volcker Rule were in place this would not have violated it.’ First of all, I think people would be surprised [Volcker is] not in place. And it’s not in place because of this guerilla war banks have fought against it. … But the correct response is not that [the JPM trader is] OK because it wouldn’t violate the Volcker rule. The correct response is that the Volcker Rule isn’t strong enough and we need Glass-Steagall.”

While these are good sentiments and in line with what Warren has been saying for a while, they’re not that far outside what has become standard discourse by liberal Democrats since the announcement of JP Morgan’s $3 billion and growing trading loss.

However in an interview with David Dayen of FDL News Warren makes incredibly strong statements on the failure of the Obama administration and the mortgage fraud task force to hold Wall Street bankers accountable for the financial crisis.

FDL News: Can all of these issues with regulation and oversight of Wall Street ever be successful without them involving handcuffs in some manner? The efforts to hold the banks and their executives accountable have all resulted in slap-on-the-wrist fines and settlements. We’re four years on from a financial crisis that wrecked the US economy, one rooted in multiple levels of fraud, and no top executive has gone to jail for it.

Warren: And that is disgraceful. No one has been held accountable. Americans know that all the way down to their gut. The financial crisis has been treated as if it were a tsunami or a snowstorm, or a natural act for which no human being had any direct participation. The people who broke the economy should be held accountable. It’s as simple as that. And that means criminal investigations, civil investigations. Without that, it’s not possible to clean the system and rebuild it.

FDL News: Are you confident that the current set of investigations, including this task force co-chaired by Eric Schneiderman looking into mortgage abuses – there’s been a lot of controversy about it, about staffing and resources – are you confident that the investigations in place today will actually lead to the necessary accountability for Wall Street for their role in the crisis?

Warren: I am not confident. No. And that’s the answer to your question. The American people are pushing for more accountability. They need to keep on pushing until it happens.

It is significant for a top targeted Democratic Senate candidate to be saying she has no confidence in what was hyped as a major investigation by the President in the State of the Union and by AG Schneiderman when he assumed a role within it. Dayen notes that it “is extremely damaging to the attempt to pass off the RMBS working group as something legitimate” for Warren to say this.

As I wrote yesterday, President Obama is unlikely to convince independent swing voters in key swing states who think he hasn’t done enough to hold Wall Street accountable unless and until the handcuffs come out. Warren is saying that this is unlikely as things currently stand.

Hopefully the pressure from the polls and key Democratic candidates like Warren serves to light a fire under the administration and the mortgage task force. There is clearly no ingrained desire within the Obama administration to uphold the rule of law when it comes to bank criminality; one can only hope public political embarrassment will be a motivating factor. Handcuffs for banksters as part of a cynical election year ploy is far preferable to continued inaction.