Author: Matt Browner Hamlin

http://holdfastblog.com

Pawlenty’s Google test will cut everything

There’s a reason kids are taught not to run with scissors: it’s dangerous and people can get hurt when the implements of cuts get carried away. Unfortunately this is a lesson that Tim Pawlenty never learned and now the rest of the country is going to get hurt by his reckless and slapdash style of cuts to programs that benefit working American families. No doubt the top line story is going to Pawlenty’s nonsensical “Google test”:

There are some obvious targets to cut. We can start by applying what I call “the Google test.” If you can find a good or service on the Internet, then the federal government probably doesn’t need to offer the same good or service.

Uh, what? Eddie Vale of Protect Your Care points out what the consequences of this are:

I can Google ‘seniors’ and ‘health care’ does that mean Pawlenty would completely end Medicare, Medicaid and Social Security? I can Google ‘veterans’ and ‘hospital’ does that mean Pawlenty would dismantle the VA system? I can Google ‘pharmacy’ does that mean no senior citizen or child would ever get assistance with their medicines from Pawlenty? These may seem like idiotically stupid questions, but, are necessary since Pawlenty is going to give a speech to demonstrate his qualifications to be leader of the free world by basing his policy agenda off what he can find on the internet.

“It’s also pretty sad and pathetic how quickly the regular blue collar guy veneer has fallen off as he rushes to cry crocodile tears over class warfare while taking away health care from seniors and kids to pay for tax cuts for millionaires, billionaires and big oil.

“Finally, for those of you who are more visual learners, here’s an animated version of this statement – http://lmgtfy.com/?q=Pawlenty+%26+policy+%26+are+you+f%27ing+kidding+me%3F%3F%3F

Heh, well played Mr. Vale. Pawlenty’s speech makes the example of the Post Office – that’s right, Pawlenty wants to privatize the Post Office. Now I don’t know if Pawlenty gets special discount rates from anti-union FedEx, but I don’t know of any private shipping company who can send a letter for $0.44. Just because there are private companies that exist on the internet (and in real life!) who provide similar services, doesn’t mean it is economically sensible for the government to stop providing those services affordably. And as Vale points out, this can be said literally everything the government does. It’s on the internet! The Google will cut it all!

Additionally, Pawlenty’s plan includes:

  • Cut corporate taxes by 57% and make sure not to cut subsidies to Big Oil
  • Huge new tax cuts for millionaires
  • Eliminate taxes on capital gains, dividends, and the estate tax (all taxes which essentially only apply to millionaires)
  • A constitutional amendment requiring a balanced budget, with a budget cap of 18% GDP (forcing huge cuts in health and social programs)
  • Raise the Social Security retirement age (aka huge cuts)
  • Cap and block grants for Medicaid (aka huge cuts)

Pawlenty’s plan is ideologically extreme, going at least as far if not farther than the budget authored by Paul Ryan and passed by House Republicans. Pawlenty’s plan cuts Social Security and Medicaid and would have to dramatically cut pretty much every other non-military program in the federal budget to make up the massive gap between the level of revenue his tax cuts would bring in and the current spending, which is at 25% of GDP.

What’s most infuriating about this isn’t that Pawlenty is seek to destroy the entire social fabric of the American republic, a system of governance and societal support that has taken developed and thrived over the last century. Rather, what’s so sickening about Pawlenty here is that he is proposing massive tax cuts for the wealthy and massive spending cuts to programs that benefit working, middle class Americans – essentially facilitating what would be hundreds of billions of dollars in wealth transfer from the middle class to wealthy elites – and he has the temerity to claim that it is Barack Obama who is guilty of class warfare. You’ve got to be kidding me, Tim Pawlenty. Clearly class warfare is going on here, but it is Pawlenty who is perpetrating it at the expense of our grandparents, our parents and our children.

Originally posted at AMERICAblog Elections: The Right’s Field

Krugman vs Vouchercare

Paul Krugman has been steadfast in his commitment to calling out the Republican plan to destroy Medicare in the Ryan budget for what it is: a plan to destroy Medicare and replace it with vouchers. The GOP has been pitching quite a hissy-fit since Krugman and many Democrats have started to correctly label their Vouchercare plan for what it is. But Krugman doesn’t back down and today’s column is a good look at exactly why the Ryan budget destroys Medicare and how calling the GOP Vouchercare plan Medicare is nonsense.

Towards the end of his column, Krugman turns towards Canada’s universal healthcare system (also called Medicare) as an example of what a genuinely improved version of our Medicare could look like by reducing waste and increasing efficiency. Krugman writes:

Canadian Medicare, then, looks sustainable; why can’t we do the same thing here? Well, you know the answer in the case of the Republicans: They don’t want to make Medicare sustainable, they want to destroy it under the guise of saving it.

One thing that could emerge (at least an a sane, alternative reality version of America) from the current fight over the Ryan budget’s destruction of Medicare and the wholesale voting of House Republicans in favor of this destruction is a debate about why Medicare works and why it needs to be expanded, not destroyed with vouchers. This, in turn, could actually open up the door for a policy debate that says, “Well if Medicare is this great for seniors, why don’t we expand Medicare to cover all Americans?” Of course there is no cohort of Democrats in federal elected office with any power who support this or would argue for it. But I’d love to hear the anti-Vouchercare crusading Democrats make a convincing argument against Medicare for All that doesn’t use the words “political capital,” though I doubt that’s possible.

Anti-eviction violence in China

Financial Times reports on a disturbing trend in China: homeowners being evicted by the Chinese government to make way for development are fighting back with violent tactics. In China, the transfer of wealth from working class people to elites is abetted by the government in an even more dramatic way than here in the US, but the offense is the same. The drama of the FT article is only different by a matter of degrees from what is going on in the US. Here the theft of homes is done through a lack of enforcement of real estate and securitization laws, a lack of due process for home owners and on some occasions, actual physical theft by banks. Compared with the straight theft by developers, backed by government thugs, what happens in China is really similar. The surprising (and fortunate) thing is that while Chinese homeowners may now be turning to violent acts of protest, US homeowners have not. Sure, there’s the memorable scene in “Capitalism: A Love Story” where a recently evicted farmer talks about him now understanding how someone could get to a point where they take a gun and shoot up a place, but that’s just talk.

The economic inequality in China is similar to economic inequality in the US. The actions of wealthy elites and the government against working class people and homeowners is similar. The levels of protests by working class people remain dramatically higher in China than in the US. While violence has no place in protest, there needs to be (and I think there will be in the future) greater public outcry against policies which destroy middle class wealth and give it to people and banks who are already wealthy beyond their wildest dreams.

Campaign finance questions emerge around Palin’s trip

MSNBC contributor Karen Finney has a piece in The Hill questioning the propriety of Sarah Palin’s use of SarahPAC money to pay for her and her family’s “vacation” around the east coast. The trip has been treated by the press the same way it has been treated by Palin’s growing campaign machine: like a political trip, replete with meet-and-greets, on-the-road pop-ins and photo ops with key Republican politicians at iconic locations. Of course, as Finney points out, Palin’s explanations of this as a family vacation fly in the face of what political contributions to her PAC can and should be used for. Finney writes:

Given that Palin has so emphatically stated that this personal family vacation is not related to any political purpose, is it criminally fraudulent — federally punishable as mail or wire fraud — if the PAC funds, reasonably contributed for political purposes, are unlawfully converted for personal use?

This is a great question and an incredibly reasonable one for reporters to ask.

Finney thinks Palin is showing poor judgement by using PAC money for a family vacation which is masquerading as a presidential campaign testing-the-water trip which is masquerading as a family vacation. I disagree. Palin can answer as she has already – by being deliberately obtuse while performing linguistic gymnastics in response to reporters questions. She can tell her supporters on Facebook and Twitter that these questions are simply the LAMEstream media out to silence her. And she can probably assume that neither the FEC nor the Department of Justice will investigate if she is illegally using PAC money for personal gain, despite the fact that John Edwards is about to be indicted for using unreported political contributions for personal gain. In a sense, Palin has no real reason to not be coy with her purposes and her accounting because she has generally immunized herself from scrutiny from the press and from Democrats (at least to the extent that she does not accept their frame – how voters take her is a different question).

Originally posted at AMERICAblog Elections: The Right’s Field

Berman on the assault on the CFPB

Ari Berman has a great piece in The Nation on the financial industry’s assault on the Consumer Financial Protection Bureau on whole and Elizabeth Warren in particular. Banks, mortgage lenders, credit card lenders, payday lenders, and the student loan industry all seem petrified of Warren and the CFPB and it’s showing. Of course, as Matt Taibbi pointed out a few days ago, the reality is that while the finance industry was able to stop a lot of good ideas from coming into play in Dodd-Frank, they are still trying to kill the few workable reforms that slipped through Congress. Every possible avenue is being pursued to ensure that the status quo is maintained. Taibbi makes the point in the context of poisonous interest rate swaps that are destroying communities like Jefferson County, Alabama. But he explains how the pushback against swaps regulations in Dodd-Frank is part of the larger effort to prevent any reform from taking hold:

The other angle here is how finance reform inevitably gets whittled down into nothing. Dodd-Frank to begin with was maybe a ten-percent reform effort; the finance lobby killed about 90 percent of the real stuff before it even got voted on. The ten percent that did make it into “law” was still in limbo, as it always is after such laws are passed, while regulators hammered out the actual procedures for implementing the new legislation. These rulemaking processes inevitably take place in conference sessions heavily attended by industry stooges and lobbyists, with reform advocates seldom having even one or two voices at the table. You can count on another five percent disappearing in that process, if not more.

And now here comes the way to deal with the last five percent: stall. When all else fails, go into the four-corner offense and wait out the public. They will eventually forget, or else the political winds will change. It’s really a beautiful demonstration of political organization and willpower – too bad it’s, you know, evil. All this for a new sewer!

We see a similar analysis from Berman on the CFPB:

Different sectors in the finance community feuded over Dodd-Frank, but now they’re united in efforts to weaken the bureau.

The Chamber has an entire division devoted to fighting Dodd-Frank, the Center for Capital Markets Competitiveness, and a huge budget. In the first quarter of this year, the Chamber spent $17 million on federal lobbying, far more than any other group, with a dozen lobbyists focused on the CFPB alone.

Berman has a lot more on the opposition to Berman and Warren, including how the banking industry is molding freshmen congressmen with no background at all in finance into hardened legislative warriors against CFPB. You can get anything for the right price, I suppose.

More than anything, this is an important lesson for how the forces opposed to reform work in Washington, DC. The fight is never over just because a law was passed. Regressive business lobbies will keep fighting to return to a late-1800s style economy free from any form of regulation or consumer protection. If they can’t get a law the dislike stopped, they’ll elected more pliable members of Congress and fight it from the inside in subsequent years. The climate for achieving real change is even more hostile when you add in the lack of willingness for Democrats to do things that piss off their donors in the financial industry.

I don’t know how this ends, but in the near term I can’t say I have high hopes for maintaining even the modest reforms of Dodd-Frank in the absence of a massive public outcry against the finance industry’s efforts to continue to deregulate after the financial collapse of 2008.

Impossible

Louise Story and Gretchen Morgenson have a long piece in today’s New York Times about the lack of investigation into Goldman Sachs and other big banks fraudulent activities in mortgage security creation leading up to the financial collapse. They look at the SEC suit against Fabrice Tourre, a young, junior official at Goldman whose brash emails have become a signifier of the way that bank was fleecing clients and purchasers of their mortgage-backed securities.

Across the industry, “it’s impossible that only one person was involved with fraudulent activities in connection to the sales of these mortgage securities,” said G. Oliver Koppell, a New York attorney general in the 1990s and now a New York City councilman.

The Story-Morgenson piece goes on to look at how unlikely it is that Tourre is the sole individual responsible for fraudulent activity at Goldman, given that the Abacus deal that Tourre was sued over was one of many similar deals Goldman did in this period. Senator Carl Levin’s investigatory report, aimed primary at Goldman Sachs, provides ample evidence for their to be other investigations targeting high-level Goldman officials – investigations that should go beyond civil fraud and look at criminally fraudulent activities.

The best way to understand the alleged impossibility of one low-to-mid level official at Goldman Sachs being the sole target of SEC investigation into the firm is to recognize that punishing powerful people is not something the federal government is interested in. Even if the Department of Justice were to look only at perjurious statements made by Goldman officials to Congress, they would have ample grounds for prosecution from the Levin report. While the DoJ says they’re looking into the report, as of yet nothing has been forthcoming. And it’s not as if the Levin report was the first to discover fraudulent, criminal activity inside Goldman’s headquarters (or that of any other Wall Street bank). A two-tiered system of justice is in place and Fabrice Tourre is the perfect example of it. A young, arrogant, unlikable banker who wielded more power than any of the “widows and children” he proudly claimed to fleece, but who is so unimportant to Goldman that they’ve paid him for the last year not to work. While the federal government has proven unwilling to investigate, the work of state level attorneys general like Eric Schneiderman, George Jepson, Mark Shurtleff, Lisa Madigan and Kamela Harris is a much more promising path to accountability for fraudulent bankster behavior.

Edwards is not a bankster

Politicians should not be held to a different standard of justice than anyone else, but of all the various criminal enterprises operating in America from 2007-2008, I really don’t think John Edwards‘ infidelities via campaign cash would be as high a priority as, say, criminal fraud on Wall Street. But what do I know about our priorities?

…Adding, absolutely prosecute John Edwards…but go after the banksters too!

NYT Calls for National Servicing Standards

The New York Times’ editorial board:

For starters, various government guidelines on loan servicing would be replaced with tough national standards. Among the new rules, homeowners would be evaluated for loan modifications before any foreclosure — or foreclosure-related fee — is initiated. The bank analysis used to approve or reject modifications would be standardized and public, and failure by the bank to offer a modification when the analysis indicates one is warranted would be grounds for blocking any attempt to foreclose.

National servicing standards could succeed where antiforeclosure programs have failed, namely, in compelling banks to help clean up the mess they did so much to create.

In the Senate, Democrats Jack Reed and Sheldon Whitehouse of Rhode Island and Sherrod Brown of Ohio have introduced bills to establish standards. The new Consumer Financial Protection Bureau can also impose servicing rules. The Obama administration should champion national standards, and Congress and regulators should act — soon.

Standardization and transparency are important pieces of what needs to get done. But this isn’t just about stopping foreclosures or encouraging modifications int he strict sense that the Times is pushing. It’s also about regulating mortgage servicers – making sure that fee pyramiding schemes are stopped, improving billing documentation for homeowners, and enforcing existing laws for mortgage servicing. Mike Konczal’s piece yesterday has a lot of detail about what servicing standards should look like.

Konczal on fixing mortgage servicing

Mike Konczal has a good, comprehensive piece in The American Prospect on how we need to go about fixing mortgage servicing and unraveling the foreclosure crisis. For those looking for a primer on the problem, Konczal’s is a good place to start:

Three elements are needed to reform this broken system. The first is an in-depth investigation of the mortgage-servicing industry’s abuses. The second is the creation of a proper system for the servicing of debt with enforceable consumer protections. The last is a more effective plan to limit foreclosures and get a floor under housing prices, using better and more comprehensive loan modifications.

The piece looks at ways to address these main issues. Overall I think Konczal pulls his punches a bit when it comes to the settlements floated out of the state attorneys general negotiations with banks, but this line about what the banks are asking for in a settlement is key:

The leaked settlement offer by the banks is nothing but a promise to do what they should have been doing all along. But whatever trust the largest banks may have had has been destroyed in the post-crash era, and any plan that has weak or nonexistent enforcement and penalties should be considered dead on arrival for progressives.

The banks’ proposal is a joke, as is anything that basically amounts to them following the laws and regulations they were already supposed to be following.