The political folks like Dave Plouffe need to understand the policy Tim Geithner is pushing is in direct contradiction with their political strategy of taking on Wall Street and will blow up badly in their faces. You can’t give the Wall Street guys the ultimate sweetheart deal, and then try to run against Wall Street, or run as fighting for the middle class. As my old boss Bill Clinton used to say, that dog just won’t hunt. – Mike Lux
Just yesterday David Plouffe said Mitt Romney “has no core” on Meet the Press. Oh, the irony.
It’s hard to argue with Lux’s point about Obama, which he makes up front: I know Barack Obama is a far superior President to any of the extremist lunatics in the Republican Party: I definitely prefer a sane, intelligent President to one of those turkeys.
Team Obama thinks Pres. Obama can run for reelection by preening they’re taking on Wall Street, while simultaneously sucking up to these fat cats by taking as much money from them as they can. “Morning Joe” is going after Obama on this daily.
There is no way Pres. Obama can also act like he understands the Occupy Wall Street protests while finding no problem with benefiting from their cash.
Mike’s piece is a must read.
This banking deal that I have been writing about for the last week was the subject of a great piece by Gretchen Morgenson in the New York Times, and as more details emerge, it looks even worse than a lot of us who have been following this issue thought it would be. We already knew that the $25 billion fund being created would only cover 5 percent of the underwater mortgage foreclosure problem, but Morgenson reports that most of the $25 billion isn’t from the banks themselves, but from taxpayers. A dozen banks would contribute a grand total of $3.5 to 5 billion toward the settlement, pocket change for massive companies that apparently approved their foreclosure mill law firms likely committing over 1,000,000 counts of perjury in the robo-signing process. The rest of the money, about $20 billion, would come in the form of “credits” banks essentially give themselves if they agree to reduce a certain amount of the principal owed on mortgages. We don’t know the details yet, but given that all banks in the home lending industry write down some mortgages, unless the details are tough on the banks (a phrase not generally heard of among regulators in this era), this will be giving banks credit for mortgages they would be writing down anyway. And if they don’t end up writing down as much as they project, they probably won’t end up being penalized for it given the history of programs like HAMP.
And in exchange for the pocket change penalty and agreeing to get credit for doing what they would have done anyway (which would be very big of them), banks would be given legal immunity for all those perjury counts and all the other fraudulent activity done through the MERS corporation — a shell corporation set up by the biggest banks to help them securitize all those mortgages into the financial products that caused the housing bubble and financial panic of 2008.
[...] But if the administration rams through this ultimate in Wall Street sweetheart deals — a laughably pocket change fine combined with “credit” for what they would have done anyway, at the expense for a get out of jail free card for 1 million counts of perjury and a wide range of other potential fraud — they will have zero credibility to run as the tough on Wall Street candidate. ZERO. And look, it won’t be just me who will notice how bad this deal is — and I’m a ton more sympathetic to the President than many of the people who will. Reporters like Morgenson will keep blasting away. Economists like former IMF chief economist Simon Johnson and Nobel Prize winners Joseph Stiglitz and Paul Krugman will be outraged. The tens of thousands of people occupying cities all across America will turn on the White House. The millions who have signed online petitions on Wall Street issues will be devastated. Organizations that are usually Obama’s allies like labor and MoveOn.org will likely condemn the deal. And at the end of that entire outcry, they will have no credibility left to ever tell voters they are tough on Wall Street.
The problem here is that though Pres. Obama has said on the stump that 2012 won’t be as sexy as 2008, his top political aides have not internalized this very real reality. They evidently think they can get away with saying one thing in public and do another politically.
Do they think people are stupid?
Even after the publicity surrounding Occupy Wall Street, somehow the message just hasn’t sunk in at the White House or Obama reelect. Somebody’s stupid all right, but it’s not the American public.