Author: Matt Browner Hamlin

http://holdfastblog.com

Brutal swing state housing poll for Obama

Cross posted at AMERICAblog

Campaign for a Fair Settlement, a liberal housing group which formed to pressure state Attorneys General like California’s Kamala Harris to not agree to a bad robosigning settlement deal, has released a poll that paints a brutal picture of how voters in swing states view President Obama’s handling of the housing crisis. The poll also shows that voters think the President hasn’t done enough to hold banks accountable and that criminal behavior by Wall Street has driven the crisis. The poll surveyed independent likely voters in Pennsylvania, Florida, Arizona, Nevada and North Carolina, all of which are states which have been devastated by the foreclosure crisis. From the poll release’s key findings.

  • The percentage of independent likely voters who disapprove of Obama’s handling of the housing and mortgage crisis ranged from 48% in Pennsylvania to 70% in Nevada, while those approving ranged from 21% in both Nevada and Arizona to 34% in North Carolina.
  • The percentage of independent likely voters who say Obama has not done enough to hold banks accountable for their role in the housing collapse ranged from 60% of respondents in both North Carolina and Florida to 73% in Nevada.
  • The percentage of independent likely voters who say that the economic crisis results at least in part from criminal actions by Wall Street executives ranged from 64% of independent voters polled in North Carolina to 76% in Pennsylvania.

The poll data is viewable here.

David Dayen notes that the problem is even more stark when you look at the partisan breakdowns within the poll:

Where this really shows up is in the partisan breakdown. There’s a partisan split in the polling, with Democrats generally supportive of the President and Republicans opposed. But independents are strongly negative on this question, worse than the overall numbers, from a 26-48 split in Pennsylvania, to 34-56 in North Carolina, to 28-49 in Florida, to 29-52 in Arizona, to a whopping 21-70 in Nevada.

The takeaway from this is pretty clear: the housing crisis could be a very big issue in the 2012 presidential election. The voters who will likely swing the swing states identify serious failings by the Obama administration and if they are convinced to vote on these issues, things would be pretty bad for the President.

In the statement, Nish Suvarnakar, campaign manager for Campaign for a Fair Settlement, says, “Obama can help homeowners, his campaign and the overall economy by more aggressively pursuing banks’ criminal acts and supporting meaningful solutions for underwater homeowners.” The Obama administration hasn’t done the work it has needed to do on housing and has ignored pressure from the left to take real policy actions, but perhaps they’ll be responsive to political pressure. If voters who care about housing policy and bank accountability exist as a bloc which can swing the election, the Obama campaign would be remiss to ignore them. Criminal indictments of bank executives for fraud and criminality relating to the foreclosure crisis would be a big step in the direction of showing the administration takes peoples’ concerns seriously. It’s unlikely that another milquetoast (or worse) program will convince people he’s serious – it’s time for the handcuffs to be broken out. Short of that, I’m not sure how the President will convince these swing voters in these key swing states that he should be trusted to better address the housing crisis in the future.

Konczal on Too Big To Fail

Mike Konczal has a very good post on the announcement of JP Morgan Chase’s multi-billion trading loses and what it means for our legal ability to deal with Too Big To Fail banks. Konczal writes:

There are two ways to look at the relationship between the Dodd-Frank financial reform framework and JP Morgan’s loss disclosure. One is that it shows the need for a strong implementation of Dodd-Frank broadly and the Volcker Rule specifically, which is designed to separate prop trading from large, risky financial firms. Marcus Stanley of Americans for Financial Reform has a great post up discussing what happened, how the principle of the Volcker Rule should work in this situation, and the threats it faces. Dodd-Frank is designed to make the financial markets more transparent and robust to shocks through such mechanisms as expanding clearing requirements for derivatives and reducing interconnectedness between large financial firms. It is also designed to make it less likely that any individual firm will collapse by having stronger capital requirements for larger financial firms and eliminating certain business lines they can participate in through the Volcker Rule. This is crucial for a Too Big To Fail firm like JP Morgan.

But the second is to acknowledge that businesses run profits and they run losses. There is something to a conservative like Kevin Williamson’s remark that “The odd thing about this is that it is now considered somehow scandalous when a business loses money. It’s a scandal when banks make profits, and it’s a scandal when they make losses.” On a long enough timeline, the survival rate for everyone drops to zero. Though it was clear quickly at 5 p.m. Thursday that JP Morgan wasn’t in danger of collapsing, if things had been different it could have failed.

This illustrates the need for a mechanism to allow firms to fail in a way that fairly allocates losses to the right parties. The way corporations fail in this country is a series of legal choices we’ve made, and we found in the fall of 2008 that the mechanism we have for a shadow-bank financial firm failing — Chapter 11 bankruptcy — dragged down the entire system with it. Hence the move to bring in the FDIC to make sure a financial firm fails in a way compatible with fairness. The FDIC has special powers — advance planning and living wills, debtor-in-possession financing and liquidity, making payments to creditors based on expected recoveries, keeping operations running, the ability to transfer qualified financial contracts without termination, and the ability to turn up or down regulations going into a potential resolution based on prompt corrective action — appropriate to what our 21st century financial system needs.

I think it’s worth noting, though, that these aren’t “legal choices.” They are political choices and they are choices in morality. Fundamentally these laws speak to the question of who government serves at a time when large corporations fail. What we saw in 2008 and 2009 (and, really, since then too) is that political elites have by and large chosen to serve financial elites first and foremost. Not only are the interests of banks protected, but they are protected through the public treasury. What we have now with Title II of Dodd-Frank, which governs the winding down of TBTF banks and who pays for it, is the perfect example. Matt Taibbi recently covered how Wall Street helped achieve weak financial regulatory reform, particularly around who pays for future bailouts for failed banks.

In a nod to FDR, Title II would have forced major financial companies to pay $19 billion into an FDIC-style fund that would cover the cost of any future bailouts. But then the balance of power in the Senate was upset by the election of Republican Scott Brown to Ted Kennedy’s seat in Massachusetts. As the clock wound down toward the bill’s passage, Brown insisted on a change: Instead of making ginormous companies pay $19 billion in advance, the FDIC would first use taxpayer money to pay for any bailouts, and then spend years trying to recover that money from Wall Street by means of an assessment process so convoluted that you could grow a four-foot beard in the time it would take to understand it. Republicans managed to wrangle support, in conference, for the “bailout now, pay later” idea, and it made its way into the final bill.

Fast-forward to 2012. Rep. Paul Ryan, the self-styled Edward Scissorhands of Republican budget slashing, gathers the GOP leadership together and tells the chairman of each committee that he wants them, collectively, to come up with $261 billion in cuts. Ryan demands $35 billion of the cuts come from the Financial Services Committee, which oversees much of the regulatory apparatus that would enforce Dodd-Frank. The committee is now chaired not by the reform bill’s namesake, Rep. Barney Frank, but by median-intellected Spencer Bachus of Alabama, who last year voted to delay Dodd-Frank reforms designed to prevent swaps disasters like the one that drove his home turf of Jefferson County into bankruptcy.

Bachus’ solution to coming up with massive budget cuts? Eliminate the entire Title II section of Dodd-Frank. If another­ bank failed, Bachus argued, it would take way too long to recoup the bailout money from Wall Street through that crazy assessment process that Republicans themselves had insisted on only two years earlier. In the end, the logic went, taxpayers would wind up footing the bill anyway, so better just to scrap the entire plan to have the FDIC pay for the bailouts upfront – thus “saving” taxpayers some $22 billion.

The logic, of course, is complete nonsense. Without Title II, we’d be right back where we started – rushing to implement an expensive bailout in the midst of a crisis, without any way to make Wall Street repay the money. But because Democrats had preemptively surrendered on the original idea of forcing Wall Street to pay into an FDIC-style kitty ahead of time, Republicans were now in a position to push the whole bailout plan off the pier via a simple budget resolution.

Title II of Dodd-Frank is also something, as Konczal notes, that Republicans in the House of Representatives voted to repeal last week. A weak and ineffective provision that had meager measures to actually make the banks pay for a bailout and would likely cost taxpayers (at minimum) billions was supported by Democrats. And even that is too much for Republicans.

It’s great that the JP Morgan Chase Fail Whale trade is re-surfacing discussion of financial regulatory reform. But to this point we’ve only seen political elites at the service of financial elites, deploying regulations in a way that shows their preference for wealth to be preserved in the hands of a few bankers (regardless of how often those bankers fail in their business operations). I don’t expect that to change any time soon, at least without the actual crisis of another Too Big To Fail bank failing and being bailed out with hundreds of billions of dollars from the public’s coffers.

Taibbi on Chase’s $2b loss

What Matt Taibbi says:

f J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn’t get to do it with cheap cash from the Fed’s discount window, and they shouldn’t get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It’s a simple concept: you either get to be a bank, or you get to be a casino. But you can’t be both. If we don’t have rules to enforce that concept, we ought to get some.

Obama on Same Sex Marriage

I’ve been traveling for work, so I haven’t had the opportunity to write about President Obama’s decision to evolve already and personally come out in support of marriage equality.

This is a tremendous step forward for equal rights in America. What the President of the United States thinks on an issue such as marriage equality has big impact on its progress in the political sphere. Already other Democratic elected officials have come out in favor of marriage equality since Obama’s announcement. As an issue position, it also will mean a lot to hundreds of thousands of gay Americans to know that this President now thinks they are deserving of equal rights as straight Americans.

Of course, while this is a hugely important step, it’s just one step, not the final destination of realized marriage equality in America. The President still needs to be pressured to take steps using executive power to further marriage equality – one example being the need to push forward an executive order banning contracting to companies which discriminate based on sexual identity. Additionally, the President needs to be pushed off of his bizarre and wrong stance that marriage equality should be determined in a state-by-state basis. Likewise, the administration should stop defending DOMA.

President Obama’s decision to finally (again) support gay marriage is an historic step and should be celebrated, but it is only a transitional victory. The transformative change of actually having marriage equality in America has not been achieved. I hope that President Obama becomes an active participant in the fight for marriage equality now that he personally supports it.

Bill Black on the awful NYT coverage of Hollande’s election

This piece by Bill Black at Naked Capitalism is must-read. It’s the most thorough push-back I’ve seen against the panicked response in many American media outlets towards Hollande’s election in France and the rejection by the French public of austerity in a time of recession. Black notes that the Times’ reporters should read Paul Krugman, a Nobel prize winner who writes for their own opinion page, and listen to him, not the repeatedly wrong austerity hawks.

The dogmatic austerity devotees who consistently get it wrong are treated as undisputed authority while the New York Time’s own expert who has consistently gotten it right, and has a Nobel Prize in economics, is ignored.

Read the whole thing – it’s a very strong and important piece.

Simple Answers to Easy Questions

At Newsweek Peter Boyer and Peter Schweizer ask:

Why Can’t Obama Bring Wall Street to Justice?

Because he doesn’t think they did anything illegal.

President Barack Obama, October 6, 2011:

The financial sector is very creative and they are always looking for ways to make money. That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it. So without commenting on particular prosecutions — obviously that’s not my job; that’s the Attorney General’s job — I think part of people’s frustrations, part of my frustration, was a lot of practices that should not have been allowed weren’t necessarily against the law, but they had a huge destructive impact.

This has been another addition of Simple Answers to Easy Questions.

Robert Fitch on Obama

Yves Smith has a post at Naked Capitalism which focuses around a speech by Robert Fitch about President Obama and what we know about him based on his time as an organizer in Chicago. The speech was given in November 2008 to the Harlem Tenants Association. Fitch, an academic and a journalist, goes particularly hard at the underlying premise of Barack Obama, namely that we should strive for a post-partisan America that goes beyond the ideologies of liberalism and conservativism. Fitch says that ideology actually matters and is important:

The haves and the have-nots have different and opposing interests—landlords wantto get rid of rent stabilization; tenants have an interest in keeping it. Workers want to save their jobs; bosses want to save their capital, which means cutting workers. In pursuing theiropposing interests, the have-nots are forced take up the weapons of the weak—demonstrations, direct action; filling the jails with conscientious objectors; taking personal risks. Who benefits when one side gives up without a struggle? The Haves or the Have nots? Frederick Douglass reminds us: “Power concedes nothing without a demand. It never did. It never will.”

These are real differences and anyone who glosses over them in pursuit of placid agreement is asking that we ignore a lot of reality.

Fitch’s larger point is that when politicians like Obama ask us to put differences aside and pursue a Third Way, it almost always means that those pushing the Third Way are doing so at the expense of the needs and interests of our society’s have nots.

When the Third Way advocates insist that we share a common good; when theyrefuse to recognize that the interests of the oppressed and the interests of the oppressors don’t exist on the same moral plane; when they counsel us to stop being partisans of those interests—they’re not being non or post partisan; they’re siding with the powers that be.

The entire Fitch speech is worth reading. It’s not flattering, but given what we’ve seen out of the Obama administration on housing, on banking, and on not reining in Wall Street, Fitch does seem to be fairly prescient.

What Digby Said


Watching this crap ad from Koch Brothers funded Americans for Prosperity, Digby has the right response:

Like I said, they just hate anyone who isn’t rich. There’s no other rational explanation for this. It’s based on a highly successful program that should have been instigated much earlier. It would help business, help property values, help municipalities and help people. But it might also be perceived as a useful government program which means it must be stopped.

What Stephen King Said

Author Stephen King calls out his fellow 1%ers for selfishness and for opposing higher taxes for the rich. A choice passage:

guess some of this mad right-wing love comes from the idea that in America, anyone can become a Rich Guy if he just works hard and saves his pennies. Mitt Romney has said, in effect, “I’m rich and I don’t apologize for it.” Nobody wants you to, Mitt. What some of us want—those who aren’t blinded by a lot of bullshit persiflage thrown up to mask the idea that rich folks want to keep their damn money—is for you to acknowledge that you couldn’t have made it in America without America. That you were fortunate enough to be born in a country where upward mobility is possible (a subject upon which Barack Obama can speak with the authority of experience), but where the channels making such upward mobility possible are being increasingly clogged. That it’s not fair to ask the middle class to assume a disproportionate amount of the tax burden. Not fair? It’s un-fucking-American is what it is. I don’t want you to apologize for being rich; I want you to acknowledge that in America, we all should have to pay our fair share. That our civics classes never taught us that being American means that—sorry, kiddies—you’re on your own. That those who have received much must be obligated to pay—not to give, not to “cut a check and shut up,” in Governor Christie’s words, but to pay—in the same proportion. That’s called stepping up and not whining about it. That’s called patriotism, a word the Tea Partiers love to throw around as long as it doesn’t cost their beloved rich folks any money.

Yes, this.