Obama and His Subprime Supporters -- Are His Words For Real?

Thanks to the collapse of the subprime housing industry, millions of families stand at risk of losing their homes, in large measure because of unscrupulous lending policies by some of the biggest corporate hucksters this country has seen since the dawn of the Great Depression. Now, the nation's housing industry and overall economy is paying the price: foreclosure rates are skyrocketing across the country, while the nation teeters into a recession.

There were some interesting articles in Sunday's Washington Post regarding proposed solutions to crisis. One of the articles that caught my eye came from the Obama campaign. It was written by Austan Goolsbee, a professor of economics at the University of Chicago Graduate School of Business, who serves as senior economic adviser to Senator Obama's campaign.

Professor Goolsbee, you may remember, was in the news last month when it was reported that he contacted Canadian officials to suggest that Senator Obama's harsh campaign rhetoric on trade and NAFTA shouldn't be taken seriously. Per Goolsbee, the senator's anti-NAFTA rhetoric, a Canadian official wrote, "should be viewed as more about political positioning than a clear articulation of policy plans."

Professor Goolsbee assures us in his Post article that Senator Obama would take immediate steps to fix the foreclosure crisis. There's a problem, however. Just a year ago, Professor Goolsbee was defending subprime loans against critics who suggested that when high payments kicked in, borrowers would risk losing their homes.

Writing in the New York Times, Goolsbee defended subprime loans and warned regulators to "be mindful of the potential downside in tightening too much." He praised the risky loans for increasing the number of African-American and Hispanic homeowners, and warned that "that cracking down on new mortgages may hit exactly the wrong people."

Today, Professor Goolsbee's view of the mortgage crisis has changed. Now, however, having been fooled once by Goolsbee's public proclamations on a significant economic policy, we should be cautious before we accept his newfound support for mortgage reform.

There's an important reason to doubt the Obama campaign's public expressions of support for reform of the subprime lending industry: Contributors from the industry have provided more than a million dollars to Senator Obama's campaign. In fact, Senator Obama has taken $1.8 million from the folks who have pushed these loans on unsuspecting working families. He's taken more money from the top ten subprime issuers -- more than $400,000 -- than any other presidential campaign. Even today, following his economic speech in New York, the senator scheduled a fundraiser at Credit Suisse, one of the top sub-prime underwriters in the country.

Does Professor Goolsbee's get tough approach on sub-prime lenders really reflect Senator Obama's plans? Or do the lenders who have given so much to Senator Obama's campaign know something different? Is the Obama campaign once again talking tough in public while sending private messages behind the scenes?

Senator Obama should answer this simple question: Is he planning on following the public advice of Professor Goolsbee on the subprime crisis, or is he working behind the scenes to keep his fat cat contributors happy?

Comments

[MichaelTenery]

This isn't some PAC donating to Obama. It's a smokescreen based around the fact that individual donors are required by law to say what company they work for. I am a donor and I happen to work for Bank of America. Based on this flawed thinking all you would have to do is gather all the single donors who worked for a bank and say, Obama got x number of dollars from Big Banks.

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[mainmonkey]

EXACTLY!

[LAJonathan]

Thank you.

[suigeneris]

well said.

[flashlight]

You sound like Dr. Evil:

"One MILLION dollars!!!"

Heh heh. Obama brings in almost twice that every day! It would stand to reason that a certain percentage of those people happen to work for mortgage companies. Even if Obama was susceptible to influence peddlers (I don't think he is) these guys would be small potatoes.

[AndrewInToronto]

The article starts off with an irrelevant statement designed to cast doubt on Goolsbee's credibility, one that was dismissed by the Canadian Embassy in Washington and the Canadian Consulate in Chicago FOUR weeks ago: that the Obama campaign's publicly stated policy and that expressed in discussion when they called it are divergent. End point !!!!! A lie is a lie no matter how often it is repeated.

I was interested in the article, though, and then clicked on to the link for the $1.8 million -- from the Clinton Fact Hub. No references. Given the first point and the obvious difficulty Clinton has distinguishing between dreams of grandeur and reality, I will need better proof.

[uscitizen]

This post sure is slanted, leaving out inconvenient information. For example, millions and millions of dollars have been contributed to Obama by small donors. That kind of sets a perspective that's missing from McEntee's opinion piece.

And, I decided to follow his "$1.8 million" link. Amazingly it goes to Clinton's website. Great primary source of information when slamming the opposition, no? Not only that, but he tries to make hay about Obama taking more money from the top 10 issuers of subprime mortages than any other of the presidential campaign. If you check out the link to the Clinton website, you'll find that Clinton has received nearly $365,000 compared to Obama's more than $400,000 (if we accept the Clinton site as an accurate assessment). Come on, now. For one thing, those dollar amounts are pretty low. For another, they're virtually identical. If McEntee is trying to paint Obama as disingenuous about this, it seems like he ought to paint Clinton in the same light--in fairness.

And, nowhere does he provide any information about the total amount of money that Clinton has received that would be from similar donors. Without that piece of information, there's no way to make any accurate comparisons or begin to judge whether this is an issue.

[RobertArend]

Some of the commentators have questioned not only your charactor but that of the AFSCME union you lead. I say to them that I was an AFSCME member and held leadership roles in my AFSCME local throughout 35 years of my life, and Gerald McEntee has been the hardest working labor leader of any in the labor movement in the past 40 years. AFSCME was rescued from the garbage heap of history when McEntee rescued Jerry Wurf and AFSCME with the sucessful organizing drive that brought the union to most of Pennsylvania's public employees.

And the story of how he and his band of brothers pulled that off is not unlike "Charlie Wilson's War" in comedy and gravity. That history would make a great movie.

President Clinton gave us NAFTA. His wife lies about her stand on NAFTA with a wink-wink to the Canadians.

I am now a retired AFSCME member. Thanks to Gerald McEntee, AFSCME and the taxpayers who worked the once booming market of well-paying middle class jobs of the years gone by, my retirement is comfortable. My judgement is ruled by what is best for those still in the American workforce__those that my continued comfort depends so much on. For their sake and my sake, I will take a chance on Barack Obama.

And, you, Mr. McEntee__if you believe Hillary to be good for the nation, I encourage you to join us retirees. We'll meet once a year and swap stories.

__two hats

[detriangulation]

The leadership of your union is opportunistic garbage. This is the same union that cut and run from Howard Dean in 04, jumping ship for John Kerry. Now that they've backed the establishment candidate over the insurgent, they refuse to do it again. They'd rather tear the party down by atacking the frontrunner. People like you just can't stand the fact that a person like Barack Obama is about t be President, can you?

[Duffs]

Did you not read his post? He said: "For their sake and my sake, I will take a chance on Barack Obama." Sounds like he wants Obama to be pres to me.

[Demoid]

McEntee "rescued" AFSCME? You must also believe that Stalin "rescued" the Soviet Union. McEntee crawled his way into the presidency of AFSCME by using racial politics to defeat the one person who should have become president (and still should be): Bill Lucy. If the members of AFSCME had the right to elect their president by rank & file vote McEntee would have been ousted years ago. Instead, McEntee stays in office thanks to a corrupt system that allows AFSCME staff to be members and delegates to the union's International conventions. One thing you can say about McEntee is that he's consistent: he fought like hell to keep an African-American from becoming president of AFSCME and now he's doing everything he can to keep an African-American from becoming president of the United States.

[DebbieW]

I couldn't agree more Robert! I'll even start up a collection for Gerry's retiree dues!

[QueenTiye]

So - fatcats contributed 1,400,000 to Obama. Meanwhile, more than 75% (and that's a low estimate) of the 85,000,000 raised in the last too months came from small donors.

I think we the small donors have more than purchased Obama's freedom.

QT

[6louis9]

You are very naive if you think Obama is going to listen to you small donors. You are a source of funds and that is it. If elected, guess the percentage of small donors invited to his white house as opposed to the fatcats.

[KDH]

Nothing he says is for real. Magic tongues are good at producing illusions

[raskolnikov72]

this is a hysterically funny piece. $1mm < $55mm from donors contributing less than $200. Seriously, ever thought about putting this argument in context or do you get paid for the number of ads clicked on within the articles you author? shill.

[raskolnikov72]

Did they contribute more than $55 million? Cause $1MM does not mean didley poo in a long tail presidency - shill.

[scepticalobserver]

So, are you acting as a spokesman for the Clinton campaign or are you off the reservation on your own?

I don't doubt your sincerity sir, just your wit. Easily disproved assertions, beg the question, why?

[AbbieXHoffman]

Amazing how there are so few comments on this post. If they have to face a fact about Obama's fallibility, his blind supporters just choose to ignore. There is a larger story here that is going untold.

[AbbieXHoffman]

You give the Obama people facts and they ignore them. Better yet--somehow it's even Hillary's fault. HAHAHA. Pretty scary.

I guess some Obama supporters just really like to be mind controlled. I would respect anyone who thinks critically and thinks for themselves regardless of who you support.

[Darkbane]

You want facts.....­scroll on down to the post by AWB......l­ol

Did you guys think John Edwards was lying when he said Hillary has taken more money from lobbyist and corporations than anybody else. Hey don't take our word for it as Obama supporters. Look up what John Edwards and his supporters said about Hillary too. You guys are just like the Bush supporters­......comp­letely oblivious to NEGATIVE things.
Most of Obama's supporters are not oblivious to his negatives, it's just what he has is very few or they are minor at best. He did a legal land deal with Rezko.....­..Hillary has Whitewater and numerous other scandals and financial controversies. He voted present (Accepted tactic of his state per other state senators).­.....Ok she voted for the war in Iraq and is paving the way for Iran.
Let's see more negatives. Rev. Wright....­..Wright was good enough for her husband when he needed support after the Lewinsky scandal ....aaaand the Wright videos will be exposed as being taken out of context here shortly so I think Rev. Wright will be vindicated and not considered a negative.
Obama lied about not hearing those comments? Hillary lied about DODGING SNIPER FIRE...

LOL there is no comparison. Hillary is WAY worse people in EVERY catergory. For every little issue (In comparison to his Obama's Peers) Hillary has several large issues.

[Amminadab]

So you seem to be saying that they all do it, Hillary just does it more effectively.

Results matter.

[dustyoh]

This is not fact -- it is dis torsion. Actually, as my state senator, Mr. Obama was very active in PRO ACTIVELY trying to fend off the subprime mess in Illinois. He was speaking of the problem way before he even ran for the US senate. You know not of what you speak.

[AbbieXHoffman]

And you know not what you speak? Hillary has been calling for a resolution to this problem for a long time with ACTUAL ACTIONABLE ITEMS--she actually provide specifics.

"Today, we have a choice. We can look at the statistics, wring our hands, and continue to do nothing, or we can do what America has always done in times of difficulty: acknowledge that we face a real challenge, and confront it head-on with real solutions
http://www.hillaryclinton.com/news/release/view/?id=2730

Obama tends to take other's ideas and use them as his own.
http://www.hillaryclinton.com/news/release/view/?id=6791

[MichaelTenery]

As I pointed out above this is not a "fact" unless you start redefining things. By law every donor must give the company they worked for. If you want to make up something about a grassroot support candidate being in the pocket of some industry all you need do is add up all the single donors from the industry you are trying to say he is in be bed with.

It is ludicrous because individuals donating less than 200$ will not have any access to the candidate/nominee which is what is alleged here.

[AbbieXHoffman]

You, my friend, are defining where you THINK the numbers came from. Unless you provide links with back-up, you're making a HUGE assumption here. You have no basis for your assumption that these numbers are calculated from adding up the workplace from individual donors. If you do, pleasep provide.

[OneLiberalLady]

By McEntee's logic, one of the biggest contributors would be that big and scary block known as "Retired." Then there is the "sel-employed" lobby. Thank you MichaelTenery for shedding light on this bit of foolishness. But I doubt it will stop the uninformed from repeating it.

[AreYouFibbing]

omg....At last an author who is not afraid to call Obama out. Never thought I would see that on HuffPo. What he has written is certainly pause for concern. So maybe Goolsbee did make that call to Canada after all. Saying one thing, meaning another aka talking loud and saying nothing.

[jstock]

This guy is a flak for Hillary, folks. Instead of just going, "well that does it, then, I'd better vote for Hillary," maybe you should consider the source. More guilt-by-a­ssociation and innuendo from the Clinton camp.

[MichaelTenery]

You know how you call someone out? You present facts. You don't redefine words and phrases to have new meanings. Like changing "fat cat" which generally means one rich donor to suddenly mean a group of individual donors, who collectively happen to work for the same industry.

These word games are what the Clinton's have done best. I guess it depends on what the meaning of the word "is", is.

[rthom]

More baggage for Obama, who ends up with so much fodder for the GOP that it has become patently obvious that he's the party's greatest liability.

[tea in the harbor]

"Fodder for the GOP" Interesting you should bring that up! This is the one area in this race Obama has no chance to catch Hillary in! The rest, the votes, the delegates, the states won, all that Democracy stuff, he has an insurmountable lead! But why should that matter?

[rebeccaj]

Hillary Supporter Statements:

Blah, blah, blah...sme­ar....innu­endo...bla­h...blah..­.insinuati­on...blah.­..blah...
blah...sme­ar...half-­truth...bl­ah...lie..­.exaggerat­ion...blah­...

= Damaged Democratic Party = McCain Presidency = dead American troops = millions of Americans without health insurance.

Aren't you proud of yourselves, Hillary supporters?