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.

Politico’s Ben White has a couple items in this morning’s Morning Money about the French elections and expected coming victory of Socialist candidate Francois Hollande. Not shockingly, financial elites are getting their panties in a twist that Hollande, who is running on a pro-growth platform that would roll back Sarkozy’s austerity agenda and attempt to stimulate the economy, will bring about the end of the world. Because obviously austerity and cutting deficits are more important than having functioning economies and people earning money that they can then spend on stuff.

White quotes one financial analyst who basically thinks that the likely coming defeats of European governments which enacted austerity measures will not actually spell the end of these austerity measures. White also cites an anonymous administration official as saying:

Hollande’s campaign rhetoric on austerity agreements may not translate into governing actions. Even if they do, the official expects Hollande to eventually come to some kind of understanding with German Chancellor Angela Merkel – who faces her own re-election campaign next year – on an approach that would moderate the short-term impact of austerity measures designed to drop annual euro zone country deficits to no more than 3 percent of GDP. There does not seem to be any high-level panic that a Hollande win could throw Europe deeper into crisis.

On the one hand, it’s good that the administration isn’t buying into the freak out that a Hollande victory might cause greater turmoil in Europe. On the other hand, the administration knows a few things about not living up to campaign promises and is surely able to speak to this with confidence and accuracy.

What will be particularly interesting to watch in coming weeks and months is how the US political and financial press comes to terms with the fact that austerity has utterly failed in Europe, damaging the economies and causing real suffering in each country that has enacted it, from France and Spain to England, Greece, and Ireland. The failures of these policy decision to improve economies and make peoples’ lives better is now begetting their political consequences, namely tossing out whoever enacted them and replacing political leadership with people who will oppose austerity and pursue growth instead.

In a functional political debate, this should be reflected in US policy discussions and dissuade Democrats from pursuing austerity, while pundits decry the sophistry behind the pro-austerity arguments. Of course that’s not what we have here and as a result, I expect more panicking and evidence-free condemnations of France than humility about both political parties’ pursuit of dangerous, failed ideas.

I think David Dayen has consistently offered the best coverage and analysis of the campaign to get the FHFA to change policy to allow for GSEs to pursue principle reduction, be that by Ed DeMarco making a change on his own or him getting fired and replaced by someone who will. No one really disagrees with the idea that the GSEs should be reducing principal to help underwater borrowers. The questions have been about the extent to which DeMarco is the biggest obstacle to fixing housing policy (he is not) and whether there are other things the GSEs can be doing besides principal reduction to aid homeowners (there are). Dayen’s post yesterday on DeMarco and his critics and the shortcomings of both sides’ arguments is a great summation of where things are at this point in the debate. I think Dayen’s closing paragraph gets at what has driven some of the skepticism against the campaign by liberal groups around DeMarco:

Needless to say, there are about a hundred things housing policy advocates could be following rather than Ed DeMarco’s come to Jesus moment. Ultimately he’s going to deliver some kind of narrow, modified principal reduction program that won’t come close to fixing housing. And then what?

Dean Baker has estimated that GSEs pursuing principle reduction would probably save 200,000-300,000 homes from foreclosure a year. While this is better than nothing, it isn’t a game changer. And DeMarco estimates the size of universe of people that he would allow principal reduction to be a tiny fraction of the entire GSE portfolio.

There needs to be a much larger conversation going on, with much larger demands.

Yves Smith and David Dayen have good posts on the announcement that Bank of America will pilot a program with 1,000 homeowners in Arizona, Nevada, and New York which would allow people who are at risk of foreclosure to rent their house from the bank for a year, with an option to extend for two years. The upside of this is that it would save the homeowner a large amount of money during that time period. Given that they would have likely lost the home anyway and seen more of their money go out the door with it, along with their credit score, the right to rent could better position homeowners to move on from their underwater homes.

Smith notes some good caveats to this. First, it’s so small, it’s hard to get your hopes up about a widespread solution. Second, the reach of this, even if widely enacted, could be limited if the banks aren’t wiping out their second liens. And as we’ve seen with the massive stock of REOs nationwide, banks aren’t good at upkeep of homes and are likely going to be worse as landlords.

Dayen’s conclusion is sharp:

But if this does work, it would represent the fact that the banks have screwed up so royally, particularly BofA, that the only way out is one that accidentally benefits the homeowner in the process. Hopefully some other banks will join BofA in this effort.