If the President thought his mortgage investigation announcement would be an easy sell to progressive critics, he was only half right at best. The announcement -- especially the appointment of New York Attorney General Eric Schneiderman -- did win praise from a number of liberal groups.
But there were other headlines in the progressive Internet this morning, too: "Is Eric Schneiderman selling out?" asked prominent financial blogger Yves Smith. David Dayen called it "The Schneiderman Gambit." "Nice Try, Mr. President," said attorney/blogger Abigail Field.
Smith's subheader says Schneiderman "joins Federal Committee that looks designed to undermine AGs against mortgage settlement deal." Dayen's reads, "Financial fraud unit appears designed to fail and grease skids for foreclosure fraud settlement." Field's says that "Breuer and Khuzami (two other unit leaders) have to go and indictments have to be immediate."
Atrios (Duncan Black) said "It's hard to see the Schneiderman thing as anything but bad news," while both David Dayen and Yves Smith wondered if the groups cheering the announcement are part of an orchestrated White House plan.
These are smart folks, and they're almost certainly right about the situation in some ways. Does that mean that the groups praising the president are wrong? Not necessarily.
Disclosure: I have a fellowship with one of those groups, the Campaign for America's Future. I've supported the effort to investigate the banks and block the administration's proposed sweetheart deal for bank fraud.
But if this was a cheap gambit designed to distract progressives while serving the banks, I'd say so. (Unless I'd sold out too, of course. But I'd be trashing my own reputation, such as it is ...)
The Critique
These criticisms of the president are in line with those I've made myself, including last night. "We already have a Financial Crimes Unit," I said about the speech. "It's called the Justice Department (and) it indicted more than 1,000 people after the Savings & Loan crisis."
The administration's lack of prosecutions has been inexcusable. His administration has refused to prosecute even the most compelling prima facie cases of and has appointed one revolving-door banker after another to key economic positions. Its financial settlements with Wall Street have been disgraceful. For far too long the president pushed the nonsensical argument that "Wall Street and Main Street rise and fall together."
And with an election coming up, bankers can write big checks that most other people can't.
So there's no reason to assume that the White House wouldn't rather make a symbolic gesture rather than offer substantive change. The skepticism's fully warranted.
The Committee
Like these commentators (I think very highly of them), I was very disappointed to learn that Schneiderman was to be a "co-chair" rather than heading the team. That means the group's being run by a committee, not a leader. Committees are designed for paralysis and gridlock, not efficiency.
It's ironic at best that the president promoted "streamlining government" and "eliminating bureaucracy" -- and then appointed a committee in the next breath.
I had the same reaction they did when I heard that Lanny Breuer and Robert Khuzami were "co-chairs" with Schneiderman. Khuzami's the architect behind some of the administration's worst bank deals and is given to making entirely disingenuous arguments to defend them. (We once called his double-talk "gelatinous," and that was being way too kind.)
People may remember Breuer from his weak performance on 60 Minutes, defending the administration's inaction on bank crime, and from revelations that both Breuer and Eric Holder worked for the prominent Wall Street law firm Covington & Burling (which played a key role in pushing the MERS scam that played such a key role in the financial collapse).
Field and Smith are right to say this group wouldn't be needed at all if Breuer and Khuzami (had been doing their jobs from the beginning. (That goes for Eric Holder too, as Neil Barofsky observes.)
The Accusation
"If I didn't know better," David Dayen writes, "I'd think that they had this guarantee in hand from the White House, so they could push out to their lists with the 'big victory' they received."
Yves Smith agrees that " A lot of soi-disant liberal groups have fallen in line with Obama messaging" -- "which," she adds with considerable certitude, "was the plan." (Soi-disant? Moi?)
Here, too, skepticism's understandable after what we've seen. But have these groups really "fallen in line" behind a secret White House plan?
The Accused
A lot of activist groups declared "victory" too soon on both health care and financial reform. That took the left's bargaining chips off the table and led to a much weaker outcome. But nobody's blessing a bad deal and folding their cards here.
Did these groups collude with the president? Remember, this is the president who's only really lost his temper publicly with people like them -- he labeled their positions, which were both more pragmatic and popular than his own, as "purist" -- and whose administration once singled out "the institutional left" for its nastiest attacks.
To believe that you'd have to believe that CAF, MoveOn, New York Working Families Party, the AFL-CIO, New Bottom Line, the Alliance of Californians for Community Empowerment, and the Campaign for a Fair Settlement -- all of which have harshly criticized the White House -- were in on a plan to undermine the very goal they've been promoting for months.
Maybe there was a memo I didn't get, but I can't see that happening.
Personally I wouldn't have worded some of yesterday's statements as effusively. But I think I understand why they were written, and it wasn't to hoodwink the American people.
The Context
Consider the context in which they were issued. Twenty-four hours beforehand, the world looked like this: No investigations of major Wall Street players. One sweetheart settlement after another. The administration had just announced that the deal they'd been opposing for so many months was complete and that the president would tout it in his State of the Union message.
These groups and others had been working hard, both publicly and privately, to turn things around. They had added leverage because the White House had planned a populist-based State of the Union message.
Here's what happened over the course of those 24 hours: Iowa Attorney General Tom Miller, the public voice of the deal, publicly retracted it. Then reports indicated that the president had pivoted and would now make investigating Wall Street, rather than the deal, the centerpiece of his mortgage comments.
Then it was learned that Eric Schneiderman, who showed extraordinary courage in bucking this deal, would "chair" this effort. (Some of the announcements were issues before it was learned that he was part of a committee.) The announcements were issued after three major reversals in a very short time.
The Appointee
I certainly don't accept the idea that Schneiderman is a sell-out. It took extraordinary courage for him to stand up to the administration on this deal, especially given reports that they put him under extraordinary pressure to cave in.
And heroics aside, he's a smart guy. He's won money from foreclosure suits and used it to help homeowners. He took on health insurers who gamed their provider networks. Presumably this isn't the end of his life's ambitions, either. He's raised more money during his first year as Attorney General than either Eliot Spitzer or Andrew Cuomo did in their first years as Governor.
Whatever Eric Schneiderman's goals are, I doubt they include being stigmatized by progressives as a sell-out. His actions over the last few months have not been those of a guy who rolls over easily. It's safe to assume that he wants to prosecute bank fraud, and that this appointment will give him access to the resources he's needed to conduct a thorough investigation.
Schneiderman certainly knows he'll be up against a lot of resistance. But he also knows he'll hold a lot of leverage -- leverage he can use with both his words and his actions. And consider what he gains: Clout, a national platform, greater jurisdictional reach, and more resources at his disposal.
Consider this: What would it do to the White House if Schneiderman labeled the entire effort a sham, resigned in protest, and continued his investigations alone? He must know he has leverage now, and presumably will use it if necessary.
The Strategy
These liberal groups may not always be perfect -- who is? -- but they seem to have a clear set of goals here. They want to kill the administration's cushy bank fraud settlement, get more money on the table to help homeowners, and investigations and prosecutions for bank crimes.
Why the announcements? Again, I don't speak for any of these groups. But my observation is that behavioral modification techniques can be very effective when applied to politicians: Apply the electric shock when they do the wrong thing, reward them when they do the right thing. Obama's shift in rhetoric, his backing away (at least for the moment) from the deal, and his embrace of Schneiderman all earned him a moment of positive reinforcement.
These groups are smart enough to understand what Schneiderman's up against. But they're also smart enough to know that Schneiderman will need a lot of backup if he's to succeed. They'll presumably be working to amplify Schneiderman's leverage every chance they get.
And if it becomes a brawl, hopefully a few of them will be willing to roll up their sleeves and say "I got yer soi-disant right here."
Could they be miscalculating? Sure. But it seems to me it's worth a shot.
The Grassroots
"This isn't a victory at all," David writes, "at least not yet." I agree 100 percent. If past experience is any guide, they'll resist Schneiderman every step of the way.
That's where the public comes in. There's no doubt that the 360,000 signatures calling for investigations and an end to the settlement had an impact. So did press reports of liberal disaffection and phone calls from upset citizens. Going forward, Schneiderman and others will need help from the grassroots. People will need to keep pressuring the administration every step of the way.
This could turn out exactly the way David and Yves are predicting -- as a cynical and failed gambit. If the final deal's a lousy one, we'll say so. But that hasn't happened yet. The worst reaction of all would be to assume that the public can't influence the outcome, and then turn away without ever trying.
This doesn't have to end badly. But it will if people assume the worst. Joe Hill said "Don't mourn, organize." In this case I'd say organize now, and don't mourn unless we lose. We haven't lost yet.
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
End of story.
"Unwilling" - only 2 of the 5 seem to have the backbone and integrity to fight the big banks - the other 3 are mere flunkies of the DoJ and SEC.
"Unfit" - see definition of the unwilling
"Unnecessary" - if the Department of Justice and Department of Treasury had been doing their jobs, this committee would be totally unnecessary.
There was already a "task force" in place and has been for a couple of years. Nothing done - no prosecutions - not even any charges made. We can hope that this will have a good outcome, but don't hold your breath.
The big picture in this political opera takes the form of a tragedy - that is, its drama is based on human suffering.
It seems to me that Joe Hill willingly became a martyr to the labor movement's causes.
His last will:
"My will is easy to decide,
For there is nothing to divide.
My kin don't need to fuss and moan,
"Moss does not cling to a rolling stone."
My body? Oh, if I could choose
I would to ashes it reduce,
And let the merry breezes blow,
My dust to where some flowers grow.
Perhaps some fading flower then
Would come to life and bloom again.
This is my Last and final Will.
Good Luck to All of you,
Joe Hill"
We need courage to see & desire to act. We don't need any more martyrs - we need living leaders to unite the people & continue to 'fight the good fight with all their might.'
The politicians not wanting to lose their seat of power, oblige and look the other way. Very simple.
We all know that gov't encouraged this activity by the banks. We all know that Fannie and Freddie guaranteed the loans. Where were the usual strict gov't standards for getting a gov't backed loan anyway???
There is much more to the housing market meltdown than we know about. The last thing the politicians want are the bankers speaking in front of a congressional hearing committee giving sworn testimony. Why do you think it hasn't happened yet???
http://fcic.law.stanford.edu/
Perhaps it's because the Financial Crisis Inquiry Commission did not achieve the same sortof results as the much earlier, however similar in focus Pecora investigation & evidenced its most success in dividing the people even further (to be even more thoroughly conquered).
"The Commission's final report was initially due to Congress on December 15, 2010, but was not released until January 27, 2011.[10] The Commission concluded that "the crisis was avoidable and was caused by: Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages; Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk; An explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis; Key policy makers ill prepared for the crisis, lacking a full understanding of the financial system they oversaw; and systemic breaches in accountability and ethics at all levels.“[4][11]
A dissent by Peter Wallison of the American Enterprise Institute claimed that the crisis was caused by government affordable housing policies rather than market forces. However, Wallison's views have not been supported by subsequent detailed analyses of mortgage market data.[12]"
http://en.wikipedia.org/wiki/Financial_Crisis_Inquiry_Commission
http://globaleconomicanalysis.blogspot.com/2012/01/obama-proposes-mortgage-bailouts.html
Obama proposing a backdoor bailout of banks, yet again.
Democrats, read the above and ask yourselves this: "Is Obama our man?"
The obvious answer is: Absolutely no effing way.
Obama has a plan to help mortgage owners refinance their underwater homes, saving them $3000 a year. Guaranteed by the FHA (meaning taxpayers). Sounds good, right? Well...
When you refinance a loan, the loan is paid off and a new one instituted. Meaning the FHA will be responsible for that loan. Imagine that home was bought in 2007 for $200,000 and it is now worth $100,000. Obama's plan would give private lenders and private mortgage holders $200,000 and FHA - you the taxpayer - would be stuck with a home worth $100,000.
Ka-Ching! $200,000 for Wall Street, translating into a $100,000 profit. Well, minus whatever the homeowner paid for - but, hey, that is what fees are for when refinancing. Make up the difference. We hear banks can be great at manufacturing bogus fees.
Great for BONUSES!!! though! KA-CHING for the 1%!
Any Democrat out there still believe Obama is their man?
That is not at all the same as the meaning he tried to put in my mouth, that these groups are knowingly in on a con, as opposed to simply being credulous.
The lady doth protest too much.