Originally posted at AMERICAblog Elections: The Right’s Field

Just a few weeks before Bachmann called for dismantling the programs during a House Financial Services Committee hearing, she and her husband signed for a $417,000 home loan to help finance their move to a 5,200-square-foot golf-course home, public records show. Experts who examined the loan documents for The Washington Post say that they are confident the loan was backed by Fannie Mae or Freddie Mac.

Bachmann quickly sought to blame Fannie and Freddie as the financial crisis, driven by the bursting of the housing bubble, unfolded in 2008. Not shockingly, she thought Fannie and Freddie were lending to, you know, the wrong type of people. And just so there wasn’t any confusion, Bachmann made clear that she means poor people of color made it harder for deserving people (it turns out she means herself) to get loans from the GSEs. At a hearing on September 25, 2008, Bachmann said:

While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was President Clinton who supercharged the process. After he entered office in 1993, he extensively rewrote Fannie’s and Freddie’s rules, and in doing so he turned the two quasi-private mortgage funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democrat voting blocks, and handed favors, jobs, and money to political allies.
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The HUD Secretary at that time was Andrew Cuomo. He made a series of decisions, reported the Village Voice newspaper, between 1997 and 2001 that gave birth to the country’s current crisis. These were changes that led Freddie and Fannie to get into the subprime loan market in a big way.

Between campaign donations and between the changes in the rules of the Community Reinvestment Act, we have seen a dramatic impact on the current subprime mortgage meltdown. It is important that minorities have access to money. It is important that communities of color have access to homeownership; however, we need to have strong lending rules that have served our Nation so well. This has hurt, unfortunately, the minority community and communities of color even more than other communities.

This was a well-intentioned law. I firmly believe that the Community Reinvestment Act was well-intentioned and meant to put more minorities and people of color into homes. This is a good, positive movement; however, the final event of this Act was to, in fact, remove communities of color from true homeownership and subject other communities to a more difficult time to receive the loans that they so desperately need to be able to get into homeownership. Fannie and Freddie, with their massive loan portfolios stuffed with securitized mortgage-backed paper created from subprime loans, are a failed legacy of the early 1990’s era.

In Bachmann’s telling, the expansive lending policies of the GSEs to poor communities of color, created the risk that was shaking the housing and financial markets in the fall of 2008. Bachmann says Fannie and Freddie’s relaxed lending rules gave poor people of color loans they didn’t deserve and this is the cause to all of our economic problems. As a result, she wants to tear the programs down.

On September 28, 2008, she praised Bush administration efforts to stabilize the GSEs, while simultaneously saying that they shouldn’t be given government support without instituting big changes to these institutions.

Many financial experts predicted this day would come as the GSEs grew in size and scope. Out (sic) government must not shore them up this time and fail to put in place the necessary reforms that will keep us from reaching this point again down the road.

What sort of reforms did Bachmann want? On September 24th, 2008, at a House Financial Services Committee hearing, Bachmann endorsed a plan by the Republican Study Committee that sought to address the financial crisis by, among other things, breaking apart Fannie and Freddie. Speaking approvingly of the RSC plan, Bachmann said:

“It breaks up Fannie Mae and Freddie Mac — who are, after all, at the heart of all of this — so that the encumbered taxpayer no longer backs them — implicitly or explicitly — and so that they do not artificially grow larger than the market will allow.”

So, to be clear, Bachmann blamed Fannie and Freddie for giving too much money to poor communities of color, which fueled a housing bubble, which while bursting put the whole economy at risk, and therefore requires the GSEs to be broken apart and privatized. While there is plenty of non-demagogic literature which shows that GSEs were a real part of inflating the housing bubble, Bachmann was putting forward a racist, reductive account of what had happened in the housing market. She utterly fails to account for the lack of understanding of executives at Wall Street banks of the financial instruments they were using to leverage themselves out into eventual oblivion. She doesn’t account for fraud perpetrated by banksters. She doesn’t account for the nature of the bubble nor the drive by shorts to keep inflating it so there would be more dangerous instruments for them to place bets on. She just wasn’t interested in understanding the whole picture of the housing crisis, for she already new it was the fault of poor minorities and the GSEs that gave them loans. Oh and she was simultaneously taking out the largest loan she could possibly get from a GSE.

In the annals of political hypocrisy, this is pretty outrageous. It’s not just hypocrisy. Bachmann went to the government and got the largest-possible government backed loan she could possibly get and then turned right around and said other Americans should not be able to get similar loans. She tried to pull the ladder to home ownership up behind her, all while questioning the sort of people Fannie and Freddie gave loans to and attacking homeowners for taking on more house than they can afford. Even for Bachmann and her regular habit of sucking dollars from the federal government’s teat, this is pretty outrageous.

In the midst of a very solid recap of what’s gone on with the debt ceiling and deficit reduction debates, Elizabeth Drew at the New York Review of Books addresses the key flaw of Republican attacks on plans which increase taxes on the rich as socialism:

Finally, the antitax position of many conservatives would seem to be illogical, since they also hate deficits: but their real aim is to reduce or eliminate federal programs. They call efforts to redistribute wealth “socialism,” but have no problem redistributing from the poor and middle class to the wealthy through taxes, as set forth in Paul Ryan’s budget plan, which the House approved on April 15. Under the Ryan plan, the taxes of the richest one percent of Americans would be cut in half, while taxes would be raised on most of the middle class. People earning over $1 million would be taxed at a lower effective rate than the middle class.

I guess part of the point is, sure, taxing the rich to fund programs which help poor, working, and middle class Americans is a redistribution of wealth. But the same goes for raising the taxes on poor, working, and middle class Americans while slashing social spending and giving tax cuts to the rich! There is a class war going on, but to this point it’s really only been fought by wealthy elites against working class people. As a result, the rich are winning and everyone else is losing. The ostensible fight back coming from Democrats is so piddling and inconsequential any sober rich person should just swallow it, for it is a placebo and not a truly bitter pill. Again we’re talking about the accounting for private jets here, not a return to an 80% tax on the top bracket. Perspective would be helpful, though I don’t think it will be forthcoming from wealthy elites.

Mike Konczal looks at why the GOP will try to block Richard Cordray as the new director of the CFPB. He notes that one of the main GOP goals for changing the CFPB is to “Replace the single Director with a board to oversee the Bureau. This would prevent a single person from dominating the Bureau and provide a critical check on the Bureau’s authority.” Konczal writes:

Breaking them down, in practice the CFPB is going to have a large operation, with people overseeing various parts of the regulatory framework. It’s not clear what problem having a board instead of a Director is meant to solve, and it is very clear that having a board instead of a Director will throw sand into the gear of the Bureau working well. Subtly, it will reduce the presence of the Bureau among all other banking regulators, as they all have a clear chief agent who coordinates the activities of the agency. Not so subtly, it’ll cause in-fighting and a lack of focus during its crucial first years.

I actually don’t think this is unclear at all. A single director is a public figure and the face for the agency. At times when policies are seeking to be changed or achieved or, most importantly, advocated forcefully for, that person is the vehicle for the bureau’s interaction with the public. Elizabeth Warren has been a highly public figure in recent months as she shepherded the CFPB in its early days. She was repeatedly called before Congress and waged pitched battles in hearings with churlish House GOP members. If the CFPB had its director replaced with a board, the bureau would lose its public figure, lose its singular point of opposition with Republicans who don’t want consumers to have financial protection, and lose the ability to effectively respond to political attacks.

One example of how panels disempower organizational standing is the NLRB. No one can name a single member of the board and since it’s bipartisan, both labor and management always have people to adopt their desired positions, making the general stance of the board itself incoherent. A different example would be the Catfood Commission, comprised of 18 members, but represented in the press as largely the project of two people, co-chairs Alan Simpson and Erskine Bowles. Does anyone know or care what Xavier Becerra did on the Catfood Commission? No, of course not, because individual leaders are much more appealing and easy to understand than participants in a larger panel. Even in a place where a group of people were supposed to come up with some conclusion, the work of each parties’ lead member was elevated, because it’s easier to understand a viewpoint advocated by a single figure or two theoretically dueling participants. In the case of the Catfood Commission the alleged novelty of a Democrat and Republican coming to a grand compromise about reducing the deficit was what was supposed to sell the whole thing. What is left behind from that work is that the Bowles-Simpson vision failed to pass the commission on whole. These examples show both the inefficacy of boards to do the work of government agencies and the tendency, when it’s relevant to elites, for the position of individual members of a board to be given primacy over the larger work of a board.

All that is to say that it’s fairly straightforward why the GOP wants to remove the director of the CFPB and replace it with a destined to be ineffective board of directors.

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