Mitt Romney, CPAC Rock Star

Terrance Heath — Fri, 10 Feb 2012 16:34:54 -0500

I have to admit, for a progressive being at CPAC can feel like being a "stranger in a strange land." For a black, gay progressive it's a bit like being dropped on another planet, with almost no breathable atmosphere; a very lonely, claustrophobic place. It's hard to feel otherwise, when you're surrounded by people extolling a vision of American with no place for you in it. (I never thought I'd say this, but I actually miss GOProud. On the plus side, I got a party invite from gay, Republican presidential candidate Fred Karger.) The lack of oxygen makes you lightheaded. The isolation, in the midst of the crowd, plays tricks with the mind.

Maybe that's why, before I left for lunch, I thought Rick Santorum was CPAC's rock star this year. Obviously I need air. I returned from lunch with a clear head. As I fought my way to the media room, through the capacity-crowd lined up for Romney's speech, past those being directed to the overflow rooms, to watch Romney speak via closed-circuit-television, I realized who the CPAC 2012 rock star really is. The fresh air not only cleared my head, but reminded me of what I already knew about conservatives and the Republican party.

What I forgot was that conservatives excel at something progressives don't: walking in lock step. Their ability to organize their troops and keep them on message is legendary for a reason. If you've been in Washington for very long, you've seen it in action and you've seen it work frighteningly well.

The joke that organizing progressives like herding cats is really only a half-joke. (Don't believe me, try getting a room full of us to reach consensus on so much as pizza toppings. It's probably the one quality of conservatives that progressive envy. Sure, they're marching backwards in lock-step, but they're doing it together.

Sure, they've had the obstreperousness of the tea party to deal with, but they're a lot less trouble lately. (I was a bit surprise and amused, though, when my "Media" caught the eye of a Virginia tea party who slipped me his card, and advised me to give him a call because he "knows where the bodies are buried," and if he doesn't know where all of them are buried, he knows the guys who do — because they're the ones who buried them. I gave him my best "smile-and-nod" until he departed.)

If there were no Mitt Romney signs or stickers visible at CPAC yesterday, they appeared in force before Romney took to the stage. And while I haven't seen many since, their appearance at right moment, along with the overflow crowd for Romney's speech, had me slightly in awe of the organizing effort, and even the ability of the crowd to rouse itself to a kind of "Oh well, if we have to," embrace of Romney.

I'll return to Romney's speech in more detail later, but there are a couple of things that were clear to me by the time he finished.

At CPAC 2012, Mitt Romney and conservatives decided to settle for each other, and tried to look happy about it. I'll give them this much credit: they did a pretty good job of it.

Conservatives up to now have remained unconvinced that Mitt Romney is conservative enough to represent them. That's important, because the far right wing of the Republican party isn't just the far right wing of the Republican party anymore. The far right wing of the Republican party is the Republican party now.

I ignored much of what Ann Coulter had to say when she spoke today, as I do when she says anything. But I was still under the influence of the fresh air from lunch when she said something I found myself actually agreeing with. "We won!" she told CPACers. "Folks, we won. There are no Rockefeller Republicans anymore! Conservatives won that fight." She didn't rattle off the list of reasonable Republicans who have either left or been run out of the party, but she could have.

As the victors, conservatives may be willing to settle for Romney if he's the only alternative to Barack Obama — which says more about how much they' dislike Obama than about any embrace of Romney — but the victories they've handed to Gingrich and Santorum in the GOP primaries so far make it clear that conservatives have set the terms for their resignation to Romney's candidacy. (Coulter's "Let's try square for a while," summed up conservatives enthusiasm for Romney.)

David Brooks may be right (and I may need get some fresh air, again). Mitt Romney is trying his best to be a crowd pleaser, trying to be all things to all conservatives. At CPAC he gave it his best shot yet.

Mitt Romney is going to deflect concerns over his Mormon heritage by going all "culture warrior" on gay people. I'll address the economic aspects of Romney's speech in a later post. The economy seems to be taking a back seat the culture war at CPAC 2012 anyway. Thus Mitt Romney is morphing himself into the ultimate culture warrior.

Since I'm covering CPAC as a member of the media, I've tried to keep myself out the "story." I've observed and listened, without offering my own views or much else about myself. The result is that sometimes I think CPACers mistake me for a member of the tribe.

There were only a couple of times I came close to giving myself away. When Foster Friess, Chairman of Friess Associates, said in his introduction of Rick Santorum that Santorum "never says anything divisive," I stifled a snort. I guess comparing parents like me to felons, and saying that families like min "don't contribute to society" doesn't count as divisive. When Rick Santorum himself said that conservatives truly embrace the idea that "all men are created equal," I couldn't help but snort.

Still, I was surprised I expected to hear a lot of fulminating against marriage equality at CPAC, and I became inured to it in advance. I heard little, compared to the the nearly constant anti-contraception rhetoric. What little I did hear, I let wash over me.

Then Mitt Romney took to the stage. After he finished promising to restore the Mexico City policy, cut off money for the United Nations Population Fund, de-fund Planned Parenthood, and reverse every Obama policy on contraception, Mitt brought it on home.

And in doing so he brought home the reality that nothing wins a candidate right-wing love like queer bashing. Romney delivered the longest, loudest screed against the 9th circuit ruling on California's Proposition 8 that I've heard during my entire time at CPAC. When he finished there, launched in the a recitation of his opposition to same-sex marriage in Massachusetts, and all he did to stop it. He sounded for all the world like a job applicant reciting his resume.

Romney ended that screed by tell the audience, "I was a severely conservative Republican governor." Point made?

I understand why he did it. See, Romney mentioned again that his father was born in Mexico. When he spoke of his family history he told the audience that his mother's father "came from England" and his father's father "moved to Mexico."

But didn't mention why his grandfather moved to Mexico.

The Romneys can trace the family history to 1555, where they have records of a Mr. Romney, no first name, born in 1555 in the town of Tonbridge, England. The Mexican roots are intertwined with their Mormon faith.

The candidate's great-grandfather, Miles Park Romney, was born in 1843 in Nauvoo, Ill., where Joseph Smith founded the Mormon church. Miles Park Romney had five wives and 30 children, and fled to Mexico after passage of the 1882 Edmunson Act that barred polygamy. Among the first Mormons to settle in to the rolling Mexican valley bordering Texas, Miles Park Romney married his fifth wife after the church banned the practice in 1890.

Among the 11 children borne by Miles Park Romney's first wife were brothers Gaskell and Miles Archibold Romney.

The family fled back to the U.S. in 1912, when the Mexican Revolution struck Chihuahua and revolutionary forces invaded the English-speaking communities.

Gaskell Romney stayed in the U.S., with his five children, including Mitt's father, George.

As a fellow Mormon pointed out, Romney really should know better.

As a Mormon, gay rights advocate and Californian, my corner of the internet exploded on Tuesday morning when news broke that a federal appeals court ruled Proposition 8, the California proposition that removed the right to marry from gays and lesbians, unconstitutional. My gay friends and their allies rejoiced as we talked about weddings we looked forward to attending, and many of my Latter Day Saint friends and ward members mourned a loss to their cause. The church reacted to the decision with a press release that called for civility, and included the curious statement, "The Church of Jesus Christ of Latter-day Saints regrets today's decision. California voters have twice determined in a general election that marriage should be recognised as only between a man and a woman. We have always had that view."

Anyone with a bare knowledge of Mormon history would know that's simply not true. This one statement encapsulates the bitter irony surrounding this long battle: that a religious group known for its history of polygamy would be the group bearing the standard for "traditional marriage".

...Mormon pioneers crossed the American plains to escape the religious persecution they faced, in part because of their views on marriage. They were prepared to fight a war to keep the government from restricting their ability to marry as they saw fit. It is far past time we remembered our history and stopped doing to others what we fought so hard against having done to us.

Mitt, of course, can't go there. He may be comfortable around gay people, but his Mormonism makes evangelicals nervous. So, he's trying to please the wingers and appear just conservative enough to get the nomination.

Just in case anyone thinks he's not anti-gay enough, Mitt is working it hard. Overtime. As I was writing this post, another CPACer slipped me this flyer.

The front bears a quote from Maggie Gallagher, of the Institute for Marriage, saying that Romney is "making the single most eloquent defense of our understanding of marriage I have heard from an American politician." Quotes on the back from conservatives ranging from Robert Bork to Jim DeMint, and Chris Christie say much the same.

After his speech Mitt walked into the crowd and started shaking hands as CPACers reached our for him. I think he almost had them convinced. Maybe they almost had me convinced that he had them convinced.

Maybe I just need to get some fresh air. Again.

Maybe I will. Right after Newt speaks.

Bank Settlement: $25 Billion Down, $675 Billion to Go

Van Jones — Fri, 10 Feb 2012 14:53:48 -0500

This week a $25 billion settlement was announced in which big banks pay up for a portion of their bad deeds in the home foreclosure crisis. Everyone is trying to determine whether this is a good deal or a bad deal.

Here is how I score it. This deal represents small progress on a small problem. Now it's time to make big progress on the big problem.

Don't count on finding many good points in the deal itself, because there aren't a lot. In fact, the main win can be found in what's NOT in the deal.

A truly horrible deal would have let the banks write a small check and then seal the door on all further investigations and pursuits of accountability. This deal does NOT do that. Because this settlement limits legal immunity for banks, this deal does not automatically let the banks off the hook for all of their wrong-doing. Except for a few issues like robo-signing, state attorneys general can still fight for more compensation and relief for the banks' victims. Government officials can proceed with investigating and prosecuting banks for their role in crashing the economy and the housing market. In other words, the door is still open to solve the much bigger problems we face. Our fight for justice can, and will, continue.

That is small comfort, perhaps, but it was hard won. So we should honor the hard work of New York State Attorney General Eric Schneiderman, California Attorney General Kamala Harris and others, including many grassroots progressive organizations like New Bottom Line. They fought courageously to prevent a total sweetheart deal for the banks. This outcome is the result of determined activism, and without this heroic effort, the deal would have been drastically worse.

That said, there is a reason why many progressives and housing advocates are furious, and why many struggling homeowners are left wondering, "How does this help me?"

Millions of homeowners and families are still suffering under the tremendous weight of a debt blanket that is smothering the economy.

This $25 billion settlement helps only a fraction of those homeowners and addresses only a very limited set of fraudulent behaviors. A number of homeowners will get some cash payments, but the amounts are negligible compared to the pain and injustice they have experienced. The actual total cash paid out by the banks is only $5 billion dollars, to be split among the nation's largest banks -- hardly a stiff penalty considering that the six largest banks in the U.S. paid $144 billion in bonuses last year. And enforcement mechanisms remain murky.

We must not forget the more than 14 million homeowners (one in five) whose homes are underwater, beneath a crushing total $700 billion in negative equity. We must not forget the more than 4 million families who have lost their homes. We must not forget the millions of families who are in some form of foreclosure proceedings on this very day.

These are the Americans who have suffered and continue to suffer. They are worried today, like yesterday, whether they will still have a home to live in tomorrow. They are the ones who must choose every month whether to pay bills or to feed their children.

Here are three things that must happen next:

1) The U.S. Department of Justice and state attorneys general must investigate and prosecute banks more aggressively than ever, at a much larger scale than anything that has happened to date.

2) We must force banks to make massive principal reduction of hundreds of billions of dollars, to immediately relieve the 14 million homeowners in the country who have underwater mortgages.

3) We must change laws and regulations to prevent this kind of crisis and fraud from ever happening again.

Two weeks ago, I called for hundreds of billions in principal reduction for homeowners. This would free up Americans to start new businesses, spend money on worthwhile products and services, and invest in their children's futures. We still need to address the $700 billion in negative equity, which in turn is only part of the nearly seven trillion dollars in total lost equity created by the banks' irresponsible, and in some cases, illegal practices.

We need a solution at the scale of the problem, so that families can get back on their feet, the economy can get working, and people can reach for their American dreams again instead of watching them drown.

That is why I say: $25 billion down, $675 billion to go.

The Sound of Santorum

Terrance Heath — Fri, 10 Feb 2012 14:28:26 -0500

Rick Santorum arrived at CPAC today, but he was everywhere at CPAC yesterday. As David Frum noted, there were no Romney stickers to be seen at CPAC yesterday, but Santorum stickers were everywhere. (With Gingrich stickers running a close second.) As he walked onto the stage, it was evident that he has a lot of support here. This is a religious, conservative crowd, and they loved him.

Santorum walked onto the stage with most of his family in tow, and was received with enthusiastic applause. As his family formed a tableau behind him, Santorum joked. "This is not the Von Trapp family," he said. "We are not going to sing," he added a beat later after waiting for the laughter to die down. That was a relief. But then, Rick Santorum started talking.

If Romney walks out on stage with his family arrayed behind him, then I'm going to assume Santorum's started a meme to get under Newt's skin some more. (Let's see you drag your family out on stage, Newt — and all your baggage along with it.)

After introducing his family, Santorum noted that his three-year-old daughter — whose illness cause him to take a short break from the campaign trail during the Florida primaries. Santorum assured the audience that his daughter was recuperating and doing well. That's interesting, because a year ago Santorum said that health care reform would kill his young daughter — who was born with a genetic abnormality.

Now, I'm not going to suggest that health care reform is responsible for his daughter's continued survival. The millions Rick Santorum earned by cashing in on his Washington insider status means that his little girl gets the best healthcare money can buy.

It's also interesting, because Santorum — like a lot of conservatives — wants to repeal health care reform. Never mind that repealing health care reform might kill a lot more people. Never mind that repealing health care reform would strip Americans of a lot of protections that Republicans have no specific plans to replace or provide in some way that reflects their values. (Like prohibiting health insurance companies from denying coverage to children with pre-existing conditions.

It got even more interesting when Santorum moved on to conservative failure. No, not the decade of conservative failure I like to call the "Uh-Ohs". The usual Republican line is "Conservatism never fails. It is only failed." Santorum spun in differently, but basically echoed it. "Conservatism did not fail our country," he said. "Conservatives failed conservatism."

Well, he's not entirely wrong, because for most of the last decade conservative had a lock on government, and the result was tremendous growth in the deficit and the size of government. (But not the economy.) And I suppose Santorum included himself when he said "conservatives failed conservatism," because he was a major player in Washington's inside game during that time.

The most interesting thing about Santorum was how little his speech focused on the economy. Yes, it got a mention, and he made sure to note that the Wall Street Journal called it "supply-side economics for the working man." (Because that's just what working people need, right?) He even got in a lick at Romney, by adding that his plan shows he "cares about the very poor, too." Then he moved to the meat of the speech.

"This is not just about jobs, although it is about jobs," Santorum said. "It's about big things. Really big things. More than just the economy." Those "really big things," are basically everything that right wingers love, and that we've heard from Santorum before — contraception, climate change denialism, etc.

By the end of the speech, it was clear that Santorum's "really big things" was really just one really big thing: the same old culture war that the right keeps fighting and keeps losing in places like California, Washington state, and in debacles like the Komen Foundation mess.

As he brought it on home, Santorum advised the crowd that the 2012 election is really about morality, not money. "We're not going to win this election because the Republican candidate had the most money," he said. "We're going to face lopsided money advantages." he said, apparently assuming president Obama would have more money. (President Obama must not be so sure, if his reluctant embrace of super PACs is any indication.)

But Santorum made it clear that his fight wasn't with President Obama in this speech. The money comment was really a dig at Romney, whose coffers overflow with cash from secret super PAC donors. And Romney was the target of Santorum's parting shot. Republicans, he said, aren't going to win in 2012 with a candidate "who has supported the stepchild of Obamney care."

Santorum and his supporters (and there are a lot of them at CPAC) may be making the mistake of thinking that Americans share their culture war concerns, but that seemed to be far from the minds of conservatives at CPAC, as Santorum left the stage to resounding applause. But the concerns of some pro-choice Republicans are hardly enough to sway the CPAC crowd.

Seeing Santorum's reception at CPAC, it's easy to think that maybe he really is their guy for 2012. After Santorum's speech, I decided to visit the CPAC exhibit hall before grabbing lunch. When I walked in to the hall, I encountered a crowd of CPACers all trying to catch glimpse of someone, and some with smartphones raised to snap pictures over the heads of the crowd. It was the kind of crowd you might see orbiting around a celebrity — a C-List celebrity at best, judging from the size — but a celebrity nonetheless.

I gave up trying to see who had drawn this crowd and settled for taking a shot of the crowd.

Then the mini-throng parted just enough form me to see who is was all for. There, in the middle of it all, was Rick Santorum.

I went to lunch thinking Rick Santorum was the "rock star" at this year's CPAC. After finishing lunch, I returned to find that Santorum was just the opening act.

Here Is A Budget That Works

Dave Johnson — Fri, 10 Feb 2012 11:23:52 -0500

President Obama is preparing to roll out his 2013 budget. If he wants a budget that gets rid of the deficit, meets human needs and does the things that polls show the public overwhelmingly wants done, The People's Budget Is The Template! This is the budget proposal from the Congressional Progressive Caucus.

The following is directly from the post, The People's Budget Is The Template:

The People's Budget

The Progressive Caucus -- a group of progressives in the Congress -- have put together a budget that fixes the deficit and grows the economy, providing jobs. It is called The PEOPLE'S Budget Plan.

Read the plan at: Congressional Progressive Caucus : FY2012 Progressive Budget,

The CPC proposal:

• Eliminates the deficits and creates a surplus by 2021
• Puts America back to work with a “Make it in America” jobs program
• Protects the social safety net
• Ends the wars in Afghanistan and Iraq
• Is FAIR (Fixing America’s Inequality Responsibly)

What the proposal accomplishes:

• Primary budget balance by 2014.
• Budget surplus by 2021.
• Reduces public debt as a share of GDP to 64.1% by 2021, down 16.5 percentage points from a baseline fully adjusted for both the doc fix and the AMT patch.
• Reduces deficits by $5.6 trillion over 2012-21, relative to this adjusted baseline.
• Outlays equal to 22.2% of GDP and revenue equal 22.3% of GDP by 2021.

Rep. Mike Honda and Rep. Raúl M. Grijalva explain, in The Only Real Democratic Budget: Why Progressives Have the Answer to What the American Public Wants,

Budgets are more than collections of numbers. They are a statement of our values. The Congressional Progressive Caucus Budget is a reflection of the values and priorities of America's working families. The "People's Budget" charts a path that keeps America exceptional in the 21st century, while addressing the most pressing problems facing the nation today. Our Budget eliminates the deficit, stabilizes the debt, puts Americans back to work, and restores our economic competiveness.

[. . .]

Our Budget listens to what the American people are telling us. It does all of the above in a fiscally responsible way that dramatically reduces our borrowing from banks and foreign governments and ensures our long-term economic competitiveness.
...
Our Budget Eliminates the Deficit by 2021: The CPC budget eliminates the deficit in a way that does not devastate what Americans want preserved, specifically, Medicare, Medicaid and Social Security. ...

Our Budget Puts America Back to Work & Restores America's Competitiveness: The CPC budget rebuilds America and makes it competitive again. We put America back to work. We rebuild our roads and bridges, ensuring that those who use it help pay for it. ...

Our Budget's Fair Tax System: The CPC budget implements a fair tax system, based on the American notion that fairness and equality are integral to our society. ...

Our Budget Brings Our Troops Home: The CPC budget responsibly ends our wars, currently paid for by American taxpayer dollars we do not have. ...

Our Budget's Bottom Line (Over 10 year Window)

• Deficit reduction of $5.6 trillion
• Primary spending cuts of $869 billion
• Net interest savings of $856 billion
• Total spending cuts: $1.7 trillion
• Revenue increase of $3.9 trillion
• Public investment of $1.7 trillion
• Budget surplus of $30.7 billion in 2021, debt at 64.1% of GDP.

See research and analysis on how The People's Budget affects middle-class households at TheMiddleClass.org.

Also see the CAF series, The Progressive Path To Deficit Reduction

Newt's CPAC Schedule

Terrance Heath — Fri, 10 Feb 2012 11:06:44 -0500

OK. I'll admit it. Newt Gingrich got me on this one. I walked into the CPAC 2012 conference this morning with my guard down (first mistake), and picked up what I thought was up updated schedule of events for the main ballroom.

Then I read it.

Ouch. "Rick Santorum (PA) 'In Defense of Big Labor'"? "Ann Coulter, 'Three Cheers for Romneycare?" "Mitt Romney, Author of Obamneycare?"

Newt is a bitter, bitter man. And if he saw the welcome Santorum got when he stepped out on stage, or saw the number of Santorum stickers on the lapels of CPACers, he's may be beyond bitter.

If this has all gotten under Newt's notoriously thin skin (think Air Force One, 1995), then Newt's speech this afternoon is really going to be fun. After all, there's nothing more entertaining than a ticked-off Newt Gingrich. He doesn't just go off-script. He rips up the script and starts making spitballs.

I'll be sure get a good seat. Just not in the first few rows

Progressive Breakfast

Bill Scher — Fri, 10 Feb 2012 09:52:20 -0500

Each morning, Bill Scher and Terrance Heath serve up what progressives need to effect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

MORNING MESSAGE: Romney, Lead Your Party. Fight For Payroll Tax Cut.

OurFuture.org's Robert Borosage: "Instead of simply renewing the vital payroll tax cut – and extending unemployment insurance – they are piling on irrelevant demands, arguing with each other, and forcing yet another unnecessary crisis. Extending the payroll tax cut for the full year will give the average American an additional $1,000, a $40 boost in each paycheck. This will help sustain the demand vital to creating jobs. Republican antics make no sense. The sabotage must stop. The question for Mitt Romney is: You claim to lead this party, are you willing to stand up for common sense?"

GOP Threatening Tax Cut Extension

House GOP threatens termination of payroll tax cut by insisting on jobless aid cuts. NYT: "...Republicans are seeking numerous policy changes connected to unemployment benefits — like a mandatory high school equivalency program and possible drug testing for beneficiaries — that Democrats have rejected out of hand. They would also reduce the benefits to 59 weeks, far less than the 79 weeks sought by President Obama ... Democrats presented a one-page counterproposal to the House offer on unemployment insurance benefits that would cap the length of time that unemployment benefits are paid out at 93 weeks for the remainder of the year. Republicans all but laughed."

Conservatives overlook the obvious reason why working-class families are struggling, argues NYT's Paul Krugman: "Suddenly, conservatives are telling us that it’s not really about money; it’s about morals. Never mind wage stagnation and all that, the real problem is the collapse of working-class family values, which is somehow the fault of liberals ... it is, frankly, amazing how quickly and blithely conservatives dismiss the seemingly obvious answer: A drastic reduction in the work opportunities available to less-educated men."

Inequality extending to education. NYT: "...researchers are finding that while the achievement gap between white and black students has narrowed significantly over the past few decades, the gap between rich and poor students has grown substantially during the same period ... the imbalance between rich and poor children in college completion — the single most important predictor of success in the work force — has grown by about 50 percent since the late 1980s ... lower-income families, which are now more likely than ever to be headed by a single parent, are increasingly stretched for time and resources."

Mixed Reaction To Foreclosure Fraud Settlement

Settlement will have "limited" impact on the housing market, says McClatchy: "'Realistically, this is a settlement that at the end of the day will make nobody really happy,' said Rick Sharga, a foreclosure expert and executive vice president at Carrington Mortgage Holdings in San Diego. ... 'People watching the housing market won't think it is a cure-all to what ails the market. And from the financial side of things, banks will quickly realize this doesn't remove liability on a host of other issues.' In fact, Obama stressed that the settlement dealt only with problems in the servicing of mortgages and that his administration continues to investigated alleged fraud in the origination of mortgages and in the packaging of them into the complex instruments known as mortgage-backed securities."

But banks have not escaped all legal trouble either. LAT: "The settlement releases the banks from claims involving foreclosures, mortgage customer servicing and loan originations. However, authorities can still investigate various fraud claims, including those involving the mortgage bonds whose meltdown triggered a global financial crisis. What's more, there is no criminal immunity or release from private claims by individuals or class-action lawsuits."

"Foreclosure Fraud Settlement Costs Big Banks Half Of Last Year’s Profits" notes ThinkProgress.

Reuters' Felix Salmon is upbeat: "Other big-money lawsuits over securitization can and almost certainly will still be brought — which means that the big banks all still have significant litigation risk hanging over their heads ... [But] what’s happening here is that the mortgage settlement is at heart largely just encouraging banks to bring their balance sheets closer to reality ... [And] insofar as principal reductions can increase the value of a mortgage, this deal is actually making banks money ... really is a win for all sides."

"Mortgage Settlement Fight Not Over, Say Organizers" reports Truthout: "...Gordon Whitman, policy director at the Pacific Institute for Community Organizing (PICO) National Network and organizer with The Bottom Line, it will only help a handful of homeowners ... 'The way forward is much more pressure and investigation and pressure on the big banks,' he continued, which 'opens the pathway to get upwards of $300 billion in debt relief for American taxpayers. Wall Street wants to make this problem go away, but it won't go away.'"

Fannie and Freddie resisting the "principal reduction" accepted by banks in the settlement. ProPublica: "The two companies aren't directly part of the settlement ... But Fannie and Freddie do guarantee or own roughly half of the mortgages in the U.S. ... Principal reduction is being pushed heavily by the Obama administration as a way to lower the rate of foreclosures. The administration recently tried to encourage Fannie and Freddie by offering to triple incentives for principal reduction. So far, the companies and their federal overseer, DeMarco, have declined to do so."

Pressure on Freddie Mac and FHFA regarding past bets against homeowners. ProPublica: "'I don't understand why you make a bet that you can largely control the outcome of, and want your bet to lose,' [Sen. Robert] Menendez said ... 10 senators sent a letter to Edward DeMarco, the head of the Federal Housing Finance Agency, the regulator that oversees Freddie Mac, calling the report 'deeply troubling.' ... the inspector general for the FHFA confirmed Wednesday that it is looking into Freddie Mac's investments."

WH Reportedly Will Adjust Contraception Rule

ABC reports that WH plans contraception compromise: "The move, based on state models, will almost certainly not satisfy bishops and other religious leaders since it will preserve the goal of women employees having their birth control fully covered by health insurance ... Sources say it will involve health insurance companies helping to provide the coverage, since it’s actually cheaper for these companies to offer the coverage than to not do so, because of unwanted pregnancies and resulting complications."

Sen. Maj. Leader Reid blocks GOP anti-contraception amendment to transportation bill. Politico: "...Reid blocked the move, telling Republicans to 'calm down' until a final rule comes out. 'This is a rule that hasn’t even been made final yet. There’s no final rule ... Let’s wait until there is at least a rule that we can talk about.'"

House, Senate Diverge On Transportation Bill

Six House GOPers break ranks on tying Arctic oil drilling to transportation bill. NYT: "Six House Republicans on Thursday sent a letter to their leadership opposing the opening of Alaska’s Arctic National Wildlife Refuge to oil drilling to help pay for a pending transportation bill ... With tough re-election campaigns coming, House Republicans of all stripes may be looking for ways big and small to assert their independence from an unpopular Republican leadership."

Bipartisan transportation jobs bill in the Senate nears passage. Reuters: "A bipartisan proposal for the federal government to spend $109 billion over two years to upgrade roads, bridges and transit systems and create jobs easily cleared a crucial hurdle on Thursday when the Senate voted 85 to 11 to allow it to proceed to debate."

Breakfast Sides

WH to release review of clean energy loan guarantee program today. The Hill: "The much-anticipated review comes as House Republicans are pummeling the administration for greenlighting a $535 million loan guarantee in 2009 to the solar firm Solyndra ... Herb Allison, a former Treasury Department official who oversaw the Troubled Asset Relief Program (TARP), conducted the review and delivered his report to the White House late last month."

Republican chair of House Financial Services Cmte investigated for insider trading. W. Post: "The Office of Congressional Ethics ... investigators have notified Bachus that he is under investigation and that they have found probable cause to believe insider-trading violations have occurred ... OCE investigators are examining whether Bachus violated Securities and Exchange Commission laws that prohibit individuals from trading stocks and options based on 'material, non-public' inside information..."

Romney, Lead Your Party. Fight For Payroll Tax Cut.

Robert Borosage — Fri, 10 Feb 2012 07:03:01 -0500

They’re at it again. The same congressional Republicans who find any excuse to cut taxes for multimillionaires are blocking renewal of tax cuts to help the middle class stay afloat in this struggling economy.

Just when the economy seems to be gaining momentum, congressional Republicans seem intent on sabotaging it.

Instead of simply renewing the vital payroll tax cut – and extending unemployment insurance – they are piling on irrelevant demands, arguing with each other, and forcing yet another unnecessary crisis.

Extending the payroll tax cut for the full year will give the average American an additional $1,000, a $40 boost in each paycheck. This will help sustain the demand vital to creating jobs.

Republican antics make no sense. The sabotage must stop.

The question for Mitt Romney is: You claim to lead this party, are you willing to stand up for common sense?

Click here to tell Mitt Romney: Speak out for the payroll tax cut. Demand your fellow Republicans in Congress stop obstructing it.

Mitt Romney says he’s for helping the middle class (though he never mentions the working poor.)

Mitt Romney says he’s for an extension of the payroll tax cut (though in October he derided it as a “temporary little Band-Aid.”)

But he’s never fought for it. He’s never challenged those in his own party who obstruct, delay, distract, drag their feet and create unnecessary anxiety for the 99%.

If he means what he says, if he knows how to lead, he’ll speak truth to his party.

Click here to tell Mitt Romney: Call on your party to stop obstructing the payroll tax cut.

Does Mitt Romney want to help Americans in need? Or does he too want to sabotage the economy to serve his political ends?

Mitt Romney claims to be a leader. Let him know: it is time to lead.

Rubio's Not Everybody's "Darling" at CPAC

Terrance Heath — Thu, 09 Feb 2012 23:13:40 -0500

I caught most of Sen. Marco Rubio's speech at CPAC this morning, and it was very well received. Based on that alone, I'd be tempted to agree with his categorization as a "CPAC darling." He's rumored to be on the short list for VP, though he says he's not interested. Of course, it probably didn't hurt that Rubio appeared at CPAC the same day he introduced legislation that could cut off contraceptive coverage for millions. That seemed to the issue that roused conservatives the most at CPAC. (I actually, I heard more about contraception from speakers than I did about gay marriage — or job creation.)

But apparently Rubio's contraceptive bill wasn't enough to endear him to everyone at CPAC.

As I was tossing out the remains of my lunch, I noticed a stack of flyers sitting on an end table. Covering a conference like CPAC includes picking up literature, since one never knows what might yield content. I read it, and quickly realized it wasn't like the other literature available at CPAC.

There's logo and no organization's name or individual's name on it. So who it came from is anybody's guess.

My guess is that someone who was still miffed with Rubio for his speech at the Hispanic Leadership Network conference, where he took the GOP to task for the tone of the immigration debate, opened up a laptop, copied and pasted the quotes into a Word document, created this flyer, printed it up at the hotel business center, and spread it around.

Bachmann & Bin Laden at CPAC

Terrance Heath — Thu, 09 Feb 2012 17:16:42 -0500

Michele Bachmann's speech at CPAC 2012 wasn't quite the start turn that her appearance in 2011 — when Americas Bachmannia infection started spreading. I guess that's the difference between being a newly-announced presidential candidate and being a newly-dropped-out presidential candidate. (She was asked to leave. Twice. So, did she drop out or was she dismissed? A little from Column A, and a little from Column B?)

Bachman scored some laughs about the three things she learned as a presidential candidate

Rep. Michele Bachmann (R-Minn.), free from the constraints of running for president, opened her speech at the 2012 Conservative Political Action Conference with a joke.

"Running for President of the United States is really one series of humiliations after another, but it's also a very educational experience," she said.

"I know where John Wayne was born."

"I know the day Elvis Presley was born."

"Thirdly, I learned never forget the three things that you learn," she said.

Then she launched into a foreign policy speech that revealed how much she has yet to learn.

Of course, what Michelle Bachmann doesn't know could fill several libraries.

So, I'm going to keep this short. Bachmann spent most of her speech attempting to turn President Obama's foreign policy successes into failures. (Though she seemed to be settling for predicting that they will turn into failures at some later date.) Then she did something interesting.

She may have mentioned that the U.S. took down Osama bin Laden on Barack Obama's watch. If she did, I missed it. Maybe I blinked. It's no secret that President Obama giving the nod to the mission that bagged bin Laden sticks in many a conservative craw. Not only did it deprives them of a convenient bogey man to drag out when needed to frighten Americans into pouring more money into Iraq and Afghanistan, but it gave rise an annoying question: Why didn't we do it that way in the first place?

It's a fair question, but Bachmann breezed right by it and instead dwelled upon the conservative notion that Bill Clinton had a chance to get bin Laden and took a pass. It's understandable. Even FactCheck.Org initially thought Clinton had passed up a chance to kill Osama bin Laden, but upon further investigation changed it's answer to "probably not."

I can understand Bachmann's problem. She can't praise one Democratic president (Obama) for killing bin Laden, so she wrongly accuses another Democratic president (Clinton) of "letting him go." In her ~~pumps~~ shoes, I'd be tempted to do the same.

But I'm not. So, I can go ahead and point out that there's a eight-year gap in Bachmann's timeline. That would be George "Dubya" Bush's watch, during which the Bush administration had a chance to get bin Laden in Afghanistan, but let him slip away.

Bin Laden had written his will, apparently sensing he was trapped, but the lack of sufficient forces to close in for the kill allowed him to escape to tribal areas in Pakistan, according to the report.

It said former Defense Secretary Donald Rumsfeld and top U.S. commander Gen. Tommy Franks held back the necessary forces for a "classic sweep-and-block maneuver" that could have prevented bin Laden's escape.

"It would have been a dangerous fight across treacherous terrain, and the injection of more U.S. troops and the resulting casualties would have contradicted the risk-averse, 'light footprint' model formulated by Rumsfeld and Franks," the report said.

When criticized later for not zeroing in on bin Laden, administration officials, including former Vice President Dick Cheney, responded that the al Qaeda leader's location was uncertain.

"But the review of existing literature, unclassified government records and interviews with central participants underlying this report removes any lingering doubts and makes it clear that Osama bin Laden was within our grasp at Tora Bora," the report said.

Bachmann, at least, admitted the world was a better place without Osama bin Laden in it, even if she didn't give any credit to the president who ordered the mission that killed bin Laden. That's because conservatives don't so much lament that bin Laden was killed. It's just that when he went, with him went most American's reasons for supporting the wars conservatives used his terrorism to justify in Afghanistan and Iraq.

The end of the war in Iraq, and the approaching end of the war in Afghanistan, is something that I have heard conservatives like Bachmann and Sen. Mark Rubio lamenting at CPAC today, if not the thousands of lives and billions of dollars both have cost.

Producers vs. Moochers, Freeloaders And Losers -- The Cruel Pro-Rich Propaganda Of The Right

Dave Johnson — Thu, 09 Feb 2012 15:24:43 -0500

"Producers" and "parasites." Cruel language justifying extreme greed seems to be mainstream now. Even Presidential candidates feel free to disparage 99% of us! In today's right-wing folklore government by We, the People is an evil thing that takes from "producers" and gives to "moochers," "freeloaders," and "losers." Government and taxes "take money out of the economy." Decision-making by We, the People is "collectivism" and "mob rule." And those of us who think the insanely wealthy should pay fair taxes suffer from "envy."

In today's discourse wealthy elites receiving $20 million a year in “capital gains” while paying almost no taxes are “producers,” while janitors or nursing home workers, working two jobs and not making enough to pay rent and feed themselves, are “moochers” and “freeloaders.” Right.

This email came in to CAF yesterday, (see also Richard Eskow's take on it, John Galt Is A Crybaby And So Are You)

I am really curios to know what motivates the mind of a socialist. Why do you think its fair to penalize those of us who produce while rewarding those who do not? If healthcare should be a right then where does it stop?

Could one not use the same argument that everyone has a right to free housing? A free car? Perhaps free air travel? Who will pay for all this?

What happens when the government has exhausted the money acquired from the producers? I have a feeling producers will stop producing if the government is just going to take it. Again, I ask why should the people who produced be punished to reward free loaders?

Actually, a right to housing, health care and decent transportation sound like the kind of things that proud citizens in a democracy ought to demand, if you ask me.

The Ayn Rand Poison

This email and others like it echo the language of the novels of Ayn Rand, which so many Republican politicians today embrace. The people writing them are disciples of Ayn Rand. They used to be teenagers who resented being told to clean their rooms; now they are grownups who don’t want to be told to pay their taxes. Republicans have enthusiastically embraced the poison of Ayn Rand, its justification of psychopathic greed and selfishness, along with her belief that altruism and democracy are "evil."

This Ayn-Randian idea that there are two kinds of people, "producers" and "parasites," is reflected across the language of the right today. The wealthy "producers" are "job creators" Republican Speaker of the House John Boehner, for example, regularly echoes this core philosophy of "producers" and "parasites," saying,

I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.”

"The very people" who "hire people" shouldn't have to pay taxes because that money is then taken out of the productive economy and just given to the parasites -- "the help" -- meaning you and me...

Who Is The Real Freeloader?

With the release of his (but for some reason only the most recent) tax returns we learned that Mitt Romney collects over $20 million a year, while doing nothing, from the many millions he was able to get control of by stripping companies and laying people off or making them take huge pay cuts and loss of benefits. According to the Christian Science Monitor titled, What kind of society does America want?, this is the story of what happened to the workers in one company when the Romney/Bain machine "came to town":

The new owner, American Pad & Paper, owned in turn by [Mitt Romney's] Bain Capital, told all 258 union workers they were fired, in a cost-cutting move. Security guards hustled them out of the building. They would be able to reapply for their jobs, at lesser wages and benefits, but not all would be rehired.

According to the cruel language of the right, those workers are "losers." If they need to get unemployment or food stamps they are "parasites" and "freeloaders" who are "asking for handouts." When old, they will need the Social Security and Medicare they paid into all their lives, more "handouts." People like Romney says these "entitlements" -- the things we are entitled to as citizens in a democracy -- are "draining the economy."

Mitt Romney says government is the culprit, not people like him who show up and strip our jobs, factories, companies, industries and economy. Romney, who pays very little in taxes on the $20-plus million he receives in "capital gains" every year, wrote in a December USA Today op-ed titled, What kind of society does America want? that the very existence of government itself costs the economy jobs, writing, "With the growth of government has come an inevitable contraction of the private sphere." Romney writes that programs like Social Security and Medicare are examples of "government dependency." And, finally, he writes, "Government dependency can only foster passivity and sloth."

Right. Mitt Romney, producer -- who receives $20-plus million a year for not working -- as contrasted with the "losers" who work two jobs at minimum wage, making so little they need food stamps just to get by. (They used to make more, but Mitt Romney came to town, buying the company they worked for, chopping it up and sending the parts they don't sell to China, laying them off or cutting their wages in half, and taking their health care and pension.)

The Dependency Index

The conservative Heritage Foundation has published an "Index of Dependence on Government," saying we have "unsustainable increases in dependent populations." Heritage writes that, "Americans are haunted by the specter of enormously growing mountains of debt that suck the economic and social vitality out of this country."

Heritage fails to mention that we were paying off the nation's debt before Bush's tax cuts for the wealthy. In fact, at the rate we were paying off the debt when Clinton was President the entire US debt would have been paid off by now. Except for those tax cuts for the wealthy. But according to Heritage, the problem is not wealthy people paying very low taxes, it is humans who have human needs who are a "a potentially ruinous drain on federal finances."

Please take a look at Heritage's "dependency index." Social Security is "government dependence." Medicare is "government dependence." And on and on. Heritage says nothing about the huge, bloated, corrupt, enormous, massive, ginormous military budget -- that doubled under Bush. Heritage says nothing about the incredible subsidies government provides to oil and coal companies. Heritage says nothing about the cost of all of the tax cuts handed out to the wealthiest since the Reagan era. Nothing at all.

Heritage says that We, the People doing things for each other "encourages dependence." They talk about people as if they are squirrels. Like building the interstate highway system encourages dependence or having good public schools encourages dependence or a pension after a life of hard work encourages dependence or public health programs that keep epidemics from spreading encourages dependence or giving vaccines to children encourages dependence or, I guess, in the old days helping a neighbor put up a barn encouraged dependence.

It is the Romneys, getting their $20-million-plus checks for doing nothing -- the "gains" from stripping our economy and sending our jobs to China -- who are dependent. Not the people that the Romneys threw out of work or cut their pay in half. Not the people working two jobs yet not making enough to pay rent and get enough to eat. The real "producers" in our economy are the 99%, the people who work, not the1%er "parasites" who use their wealth and power and connections to game the system and reap vast "gains."

Digging Holes at CPAC

Terrance Heath — Thu, 09 Feb 2012 13:05:56 -0500

I knew it was going to be a good day when the first thing I saw at CPAC was Herman Cain's bus.

I'm going to give Herman the benefit of the doubt that he sat in the front of the bus this time.

I got my laptop open just in time to catch the "It's the Spending, Stupid! Why Is It So Hard To Cut a Trillion Dollars," and Sen. Mike Lee (UT) was trotting out that hoary adage about digging a hole: "The first law of holes is: if you are in one, stop digging." Lee pointed to our national debt to make the point that America is in a hole, and — naturally — accused President Obama and the Democratic party of digging the hole, and refusing to allow or help Republicans to fill it.

*Sigh*. Not that the CPAC audience would notice, but Lee was digging himself into a hole with that argument. They don't see the hole any more than Lee does. I see it, and I've got some "shovel-ready" facts. So I'm going to fill it.

Bush beat Obama's deficit spending by 5 to 1.

Because front-running GOP presidential candidate Mitt Romney keeps harping on President Obama's deficit spending, Washington Post columnist Ezra Klein teamed up recently with some folks at the Center on Budget and Policy Priorities to calculate which recent president's policies have led to the largest growth in the national debt. George W. Bush was the winner. And not by a nose.

From 2001 to 2009, Bush's policies, including two wars, higher Pentagon spending in addition to those wars, tax cuts, higher discretionary spending and the prescription drug program contributed $5.1 trillion to the nation's debt. From 2009 to 2017 (using projections for 2011-2017), Obama's policies have added or will add $983 billion. Not even in the same ballpark. Klein:

There is a way to tally the effects Obama has had on the deficit. Look at every piece of legislation he has signed into law. Every time Congress passes a bill, either the Congressional Budget Office or the Joint Committee on Taxation estimates the effect it will have on the budget over the next 10 years. And then they continue to estimate changes to those bills. If you know how to read their numbers, you can come up with an estimate that zeros in on the laws Obama has had a hand in. [...]

So the center built a baseline that includes everything that predated Obama and everything we knew about the path of the economy and the actual trajectory of spending through August 2011. Deviations from the baseline represent decisions made by the Obama administration. Then we measured the projected cost of Obama’s policies.

It's no surprise the conservatives would miss that gaping hole. After all they chose Mitch Daniels — the OMB director under Bush, who oversaw the digging of that hole — to deliver the response to the president's State of the Union address.

In issuing the Republican rebuttal to the State of the Union address, Indiana Gov. Mitch Daniels had the audacity to present himself as a fiscal conservative and lecture President Obama on economic policy. Daniels presenting himself as a fiscal conservative is farcical: The tax cuts he pushed through for President George W. Bush as director of the Office of Management and Budget (OMB) are responsible for roughly half of today’s structural budget deficit and half the public debt accumulated last decade. And as expensive as they were, those tax cuts failed to spur even mediocre job growth; Daniels and Bush presided over the weakest economic expansion since World War II, leaving Daniels with a dismal legacy as an economic policymaker.

Daniels ran OMB from Jan. 2001 to June 2003; during his tenure, he helped craft the 2001 and 2003 Bush tax cuts. (Later tax acts accelerated implementation of some of these tax cuts, but this is when the real fiscal malfeasance occurred.) When Daniels took charge of OMB, the Congressional Budget Office (CBO) was projecting a $5.0 trillion (4.0 percent of GDP) budget surplus over the next decade. When he left office, CBO was projecting a $1.4 trillion (-1.0 percent of GDP) budget deficit over the next decade. Roughly $4.8 trillion of the fiscal deterioration resulted from legislation enacted over 2001-2003; the tax cuts alone added $2.6 trillion to the public debt over 2001-2010. (The other major drivers of this fiscal deterioration were the wars in Afghanistan and Iraq, which Daniels didn’t bother to pay for or even put on budget.) The 2001 recession certainly contributed to the emerging deficits—just as half of this year’s deficit can be chalked up to economic weakness—but the Bush administration’s economic policies ensured a mediocre economic recovery.

Though this supply-side snake oil was peddled as economic stimulus, the Bush-era tax cuts failed every test of good stimulus: They were gradually phased-in, they were targeted to upper-income households likely to save rather than spend, and they were intended to be permanent. Better economic policy could have alleviated the ensuing ‘jobless recovery.’

This is the guy that some conservatives wanted to jump into the GOP primary race, bare a week ago.

Americans know who dug the hole.

The latest Washington Post/ABC News poll shows that 54 percent of Americans consider George W. Bush primarily responsible for the problems facing the economy, while only 29 percent put the blame on President Obama. Even one in five Republicans blames Bush rather than Obama.

Of course, voters could pin the recession on Bush but still feel Obama hasn’t done enough to speed the recovery. This is largely the argument Mitt Romney makes when he says Obama “made the recession worse.” And the poll provides some support of it: 48 percent of Americans approve of Obama’s job performance — an increase over recent months — but only 45 percent approve of his work on job creation, and 52 percent say Obama, in general, has accomplished “not much” or “little or nothing.”

Those numbers make it pretty clear the hole Lee and the CPACers don't even know they're in. And that last set of numbers makes it clear that the Lee and the CPACers are missing something else.

Lee went on to say refer to the latest jobs numbers, which are good but nowhere near what's needed, and accused the president of accepting the current level of unemployment as "good enough." I'm not going to go so far as to call Sen. Lee a liar. Instead, I'll give him the benefit of the doubt that he just didn't hear what the president actually said — especially his message to congressional Republicans.

The best news of the day was not just the upside surprise of the jobs numbers, but the reaction of President Obama. He joined commentators in hailing the good news: “the economy is growing stronger. The recovery is speeding up.” But he wasn’t proclaiming “recovery winter,” a reference to the ruinous White House plan to campaign on the recovery in the summer of 2010, after prematurely turning to deficit reduction in the State of the Union that year.

Instead, the president greeted the jobs report by pushing for more action. “We must do everything in our power to keep it [jobs growth] going.” He called on Congress to act on his initiative, unveiled in the State of the Union address this year, to create a $1 billion Veterans Jobs Corps to employ returning veterans in public construction projects over the next five years, and to send $5 billion in incentives to cities and towns to hire veterans as firefighters and other emergency responders. And the president laid down a clear challenge to House Republicans that they should act immediately to extend the payroll tax cut or earn justified blame for interfering with the recovery:

“Now is not the time for self-inflicted wounds to the economy. So I want to send a clear message to Congress: Do not slow the recovery that we are on; do not muck it up; keep it moving in the right direction.”

Given how House Republicans are fairing in the polls lately, they'd do well to listen to the president on this one.

House Republican poll ratings have plunged over the past year, as Washington’s brutal battles have taken a toll on a party that was flying high last January when it took the majority.

Long, drawn-out skirmishes over the debt ceiling, the supercommittee and the payroll tax holiday have led to a 64 percent unfavorable rating for Republicans, with their favorable numbers sitting at 29 percent, according to an internal poll conducted by GOP pollster David Winston in the final days of December 2011.

To illustrate how precipitous a drop that is, Republicans started off 2011 with a 43 percent favorable rating and 46 percent unfavorable rating.

At the same time, President Barack Obama continues to gain ground on congressional Republicans on a central issue: jobs and growing the economy. When asked who is more focused on those two objectives, 49 percent of those polled believe it’s Obama, while 40 percent say it’s Republicans in Congress. It’s the fifth straight month Obama was ahead of Republicans in Congress — Republicans led Obama in early August.

Republicans say the dip in poll numbers is because the party slipped up on its jobs message. Democrats, by contrast, have 38 percent favorable ratings, and 57 percent unfavorable numbers — a slight improvement from November.

Not only do Republicans not see the hole they've dug themselves into, or how they've blocked the president's attempts to fill the unemployment hole, but they're not listening to the guy who's standing on topsoil and telling them to stop digging that hole, and start helping to fill the one they helped dig for the whole country.

Oh, and they sort of answered the question, "How hard is it to cut a trillion dollars?" Lee, along with Rep. Tom Graves (R, GA), Sen. Ron Johnson (R, WI), and moderator Colin Hanna sat down after their speeches and rattled off ideas like "Get out of the Department of Education," and "freezing retirement," etc.

Naturally, they left out military spending. In terms of spending, it's the weakest job creator, that has doubled since 2001.

A new report released today by SIPRI, a Swedish-based think tank, reveals that U.S. military spending has almost doubled since 2001. The U.S. spent an astounding $698 billion on the military last year, an 81% increase over the last decade.

U.S. spending on the military last year far exceeded any other country. We spent six times more than China — the second largest spender. Overall, the world expended $1.6 trillion on the military, with the United States accounting for the lion’s share:

As a percentage of GDP, U.S. military spending has increased from 3.1% in 2001 to 4.8% last year.

How do you cut a trillion dollars? Here's a good place to start. It's one more hole America can afford to stop digging. Except, that is, for CPAC.

Foreclosure Fraud: Scoring the Deal, Continuing the Fight

Richard Eskow — Thu, 09 Feb 2012 11:31:22 -0500

The Federal government and the Attorneys General from 49 states have signed a deal with five major banks over charges of fraud, including reported acts of widespread perjury and forgery, in the so-called “robo-signing” scandal.

A few days ago we suggested that any deal be scored against five basic principles: openness, justice, restitution, deterrence, and reconciliation. It's clear that this deal falls short in every category. The best thing that can be said about it is that, thanks to a few tough holdouts led by New York AG Eric Schneiderman, it now allows additional civil and criminal investigations to proceed.

That's far from nothing, and it could be a big deal. But it will only be a big deal if the Administration stops coddling banks and devotes a lot more resources to helping homeowners and upholding justice.

Up to now, the fight has been to prevent the Administration from doing another cushy bank deal. Now that the door's been left open to further action, there's a new fight: to demand that they devote the Federal government's resources to investigating Wall Street crime.

Our own scoring of the agreement follows, based on the criteria we set out last week. Others may have a different opinion. But now that the deal's done, the way forward is clear. To paraphrase Joe Hill, don't mourn or celebrate: Organize.

The Score

Openness: Has the truth been brought to light? Do we finally understand what happened to us, why it happened, and who's responsible?

The agreement trades away the leverage that investigators gained by essentially catching bankers dead-to-rights as they broke laws on a mass scale through robo-signing. That means they can't use that leverage to “sweat” more information out of the banks.

We wrote in our scorecard that “there's a lot we don't know about bank malfeasance,” including the guilt or innocence of individual bankers. Sadly, we may never know. This deal appears to end ongoing investigations into “robo-signing.” If you see a bank CEO whining on television about his industry's bad reputation, we're not likely to ever learn if he ever personally signed off on criminal behavior. (Which would make him a criminal too, of course.)

There is, however, an upside. We wrote that “any settlement which closes the door to further investigations gets a much lower score.” This settlement does allow investigations to move forward in other areas. As the Washington Post notes, it “leaves open the possibility of other lawsuits regarding fair housing and fair lending laws, civil rights claims, and claims dealing with how loans were packaged and sold, a process known as securitization. In addition, it does not shield the banks from any criminal violations that arise.”

That's potentially a huge win for homeowners. But it could fall far short of the mark unless we see action out of Washington to support Schneiderman and his colleagues.

We said the key indicators for openness were “continuation of ongoing investigations; commitment of major Federal resources to the Schneiderman co-chaired Task Force and other investigative bodies.” The deal does pretty well on those specifics.

Overall the agreement seems to trade away too much for too little where openness is concerned. That was probably a foregone conclusion, given the Administration's proclivities and its past insistence on a deal of this kind. It's now incumbent on the White House to show homeowners that it's fighting for them in other ways.

Justice: The American people should be able to review the deal and know in their hearts that justice has been served, the guilty have been held responsible, laws have been upheld, and we know once again that we live in a society of laws.

We're not there yet.

The first element of justice is making sure that wrongdoers personally pay for their misdeeds. This deal doesn't do that. As Yves Smith points out, it still appears to allow banks to pay for their crimes with other people's money – including your money, both through government-backed Fannie and Freddie securities and pension fund accounts (if you're fortunate enough to have a company pension).

If it's well administered, pension funds and other investors will be able to participate in the negotiations. A well-structured process would allow them to set guidelines for mortgage modifications. Investors could benefit from a slowdown in foreclosures, if it led to a more secure set of loans.

But there's no reason to believe banks will structure the process or administer it well – except in the sense that it serves their interests well by shafting everybody else.

Again, execution is everything. Which means that, once again, we need to keep the pressure the Administration to deliver.

We also said that a good deal must avoid “immunity from criminal prosecution for individuals; immunity from civil suits;” and “financial penalties for individuals.” This deal falls short on those indicators, at least for robo-signing itself. But it leaves the door open for all of those actions in other areas of bank malfeasance, which means investigators need to get busy – and the Justice Department needs to get on the side of the angels.

Restitution: Have those that were wronged been made whole?

Homeowners owe more than $700 billion in non-existent home value because they were hyped and manipulated into believing real estate was a “can't-miss investment” that would “go up forever.” Does a deal valued at $25 to $39 billion make them whole? Of course not. Nor does a $2,000 check as laid out in this agreement make up for losing your home because it was foreclosed upon illegally.

That said, it's also true that if you get a billion here and a billion there the, to paraphrase John Paul Getty, pretty soon you're talking about real money. How can this become real money? The deal says that some of those funds will go to legal aid for borrowers. If homeowners get the right kind of legal aid, with smart lawyers who know the rules, that's not a small thing by any means. But once again, that means vigilance to ensure that it happens.

Investors deserve restitution, too. Some of them were defrauded into buying mortgage-backed securities based on deceptive statements. Others bought shares in US banks because key information was hidden from them by bank executives. That means that, here too, the best chance for achieving justice is by pushing through the doors that this deal now opens to further legal action.

Legal action for everyone who was wrong must address every category of bank crime, great and (relatively) small, including but not limited to:

Defrauding homeowners with fraudulent statements and claims, by concealing information from them at the time of sale, or hiring appraisers to inflate their home's current and projected value;
Defrauding investors by concealing the true worth(lessness) of mortgage-backed securities;
Defrauding investors by make false or mislead statements about their bank's financial condition in annual reports, investor calls, and media interviews;
Other misdeeds that may yet come to light, or which I've inadvertently left out.

We said the indicators were “Scope of settlement relative to misdeeds being settled; ability for further civil suits; as much as possible, avoid having third parties pay for the misdeeds of others; retain as much leverage as possible to obtain additional restitution.”

Regarding robo-signing itself, this deal isn't strong on any of these. That means we need to move full-speed-ahead on the other categories of bank crime. One could almost be grateful there are so many others to work with.

Deterrence: Has the punishment been proportional to the crime? Is it severe enough to deter future criminal behavior?

Again the answer is: Not yet.

When it comes to their rampant lawbreaking around robo-signing, bank executives just dodged a bullet. But they're still vulnerable on other forms of personal wrongdoing.

Once again, it's all in the execution. The public has to keep the pressure on the White House to back Schneiderman and others in their investigations. Otherwise bank executives will have gotten the message that they'll never pay for breaking the law and enriching themselves with ill-gotten bonuses.

They'll even get to keep the money!

Schneiderman's MERS suit is a particularly important element of the deterrence process for a number of reasons. MERS' shell-game corporate structure needs to be broken up, and wrongs committed through this shadow entity must be punished. Otherwise the mechanism will remain in place for future abuses.

Reconciliation: When major crimes disrupt a nation, the final element is reconciliation -- the restoration of social calm, renewed trust between the parties involved, and a return to confidence in the institutions of government.

As we have now said ad nauseum: We're not there yet. When we laid out our scorecard we discussed South Africa, where some observers were astonished by the generosity and clemency displayed by President Mandela and his government after apartheid ended – only because their Truth and Reconciliation Commissions were not empowered to grant forgiveness to anyone who didn't admit what they'd done wrong.

We haven't seen the official language that the parties will use, but if they're allowed to “neither admit nor deny wrongdoing” it will be a grave disservice to the American people.

There's already a website, presumably government-created, which announces this deal. The picture is of a happy, beaming family in front of their beautiful home. You'd think this deal was “morning in America,” not the result of a massive crime wave that created millions of human tragedies.

If the entire process follows this chirpy tone, and if no apologies are offered, justice will not be served. No family that's lost its home will be buying another one with $2,000. On the other hand, if some families can keep their homes because of this deal that will be terrific. But again, that depends on the execution of this deal.

(It's also striking to see a well-to-do white family used to portray the victims of actions that disproportionately targeted minority families and lower-income households of all races.)

Clearing Government's Name

We wrote that “the institutions of government have been soiled by this process. Most Americans believe that their government has failed them under both political parties, as far as Wall Street is concerned.”

The Washington Post calls the agreement "a key election-year victory for the Obama administration". I'm not so sure – not if families and communities don't get real relief. And they won't – not unless concerned and active citizens press the Administration to provide Schneiderman and his colleagues with the resources they need.

As we were saying: Don't mourn, organize. The fight has just begun.

The Bank Deal: Ante Before The Cards Are Played

Robert Borosage — Thu, 09 Feb 2012 10:40:38 -0500

The bank settlement of $25 billion over three years from five major banks for robo-signing forgeries is being hailed in Washington and scoured by leading bank critics.

It is hard not to be suspicious of any settlement that the banks would agree to. I’m reminded of Groucho Marx who said upon being invited to join a country club: “I wouldn’t want to belong to any club that would have me.”

But the deal should be seen for what it is – a relatively small ante by the banks handed out before the real cards are seen.

What’s clear is that the banks trampled the law in their wilding while blowing up the housing bubble. They abused homeowners, committed routine forgery and perjury before the courts, and defrauded investors. When the bubble burst and the housing market collapsed, homeowners were left about $700 billion underwater (owing that much more on their mortgages than their houses are worth).

The banks are looking for a deal that will relieve them of untold criminal and civil liabilities. Untold is the right word because, outrageously, there has been no real investigation into the scope of their crimes. The state attorneys general simply don’t have the resources. The federal government does, but once the administration decided to continue Bush’s policies of bailing out the banks without reorganizing them, it has been committed to keeping insolvent banks afloat, not holding them accountable.

So the administration and some state attorneys general started pushing a deal that would relieve the banks of immunity. Some courageous attorneys general – Eric Schneiderman of New York, Beau Biden of Delaware, Catherine Cortez-Masto of Nevada, Martha Coakley of Massachusetts, Kamala Harris of California and others – held out. Schneiderman led the effort to limit the scope of immunity offered the banks, expand the settlement, and force the administration to launch a real investigation at the federal level.

So this deal results. It gets a relatively small sum from the banks in exchange for circumscribed immunity on their flagrantly illegal robo-signing – or forgery – of mortgage documents. The money will provide homeowners with the possibility of real legal assistance and small amounts of relief. No private rights of action have been waived. The suit brought by Schneiderman against Mortgage Electronic Registration Systems, or MERS – the bank creation that simply trampled hundreds of years of property laws – continues, and other state AGs should follow suit. Schneiderman now co-chairs a federal task force charged with doing a real investigation that could result in a serious settlement. That's not part of the settlement, but it is the most important part of the deal.

The deal has been cut before the investigation so it is suspect on its face, but limited in its scope. Whether it will be enforced adequately remains to be seen. How homeowners benefit will differ from state to state.

But the real question remains whether the federal investigation will finally turn over all the cards so we know just how bad a hand the banks are holding. Only then is there a possibility for real accountability – and real relief for homeowners.

So this settlement must be the beginning, not the end. We have to sustain pressure on the administration for an aggressive investigation. State criminal and civil suits, individual and investor relief have to continue. We are a far remove from achieving the justice and accountability that is due.

Professor Romer Needs Manufacturing 101

Scott Paul — Thu, 09 Feb 2012 10:10:21 -0500

Christina D. Romer, the former chairwoman of President Obama’s Council of Economic Advisers, took U.S. manufacturing to task recently in a New York Times op-ed. Headlined “Do Manufacturers Need Special Treatment?” Romer suggests that support for manufacturing needs to “go beyond the feeling that it’s better to produce ‘real things’ than services.”

She’s asking the wrong question. Manufacturers don’t need special treatment. But what they do require is a level playing field.

Romer is taking the academic view of manufacturing, and that’s a problem. In the comfortable confines of a dusty textbook, her views may be fine. But in a cutthroat real world filled with competition, cheating, and harsh mercantilism, the textbook view is very limiting. Unfortunately, Romer sides with the safe, mathematical view, which means she’s added her name to the long list of economists who just don’t “get it.”

Case in point: Romer uses arcane jargon like “market failures…efficiency grounds…positive externalities” to justify her view that there is something wrong with manufacturing. In her op-ed she explains that service work is just as important as manufacturing: “American consumers value health care and haircuts as much as washing machines and hair dryers. And our earnings from exporting architectural plans for a building in Shanghai are as real as those from exporting cars to Canada.”

Really, the bottom line is jobs. Extolling the virtues of a hair salon misses a fundamental point. Manufacturing supports more jobs, and pays better, than the service industry. And those architectural plans being “exported”—how many jobs do they support, and what’s to prevent that architectural work from being outsourced as well?

Romer makes three arguments against manufacturing. First, she says that “Government intervention can be justified on efficiency grounds if the free market won’t work well.” But U.S. manufacturing advocates aren’t asking for a handout. Instead, they’re saying that we don’t have a free market at work. In reality, we have market failure. There simply isn’t a free market when countries like China violate world trade laws and act in a protectionist manner.

I admire Romer’s intellect, but I am shocked that she doesn’t see this evidence of a market failure. Our trade deficit in manufactured goods, which has quadrupled since 1998, isn’t a market failure? (Theory suggests that our trade balance should be trending toward equilibrium.) The fact that, on paper, U.S. steel and semiconductor production is far more efficient than Chinese production, but our market share is declining, isn’t a market failure? The fact that productivity of U.S. manufacturing workers has gone up while wages have not isn’t a market failure? And, the fact that dollars invested in the American economy by venture capital are producing diminishing employment returns, as Andy Grove has noted, isn’t some sort of a market failure? Only if you haven’t been looking.

Let’s consider why we need government policy in manufacturing in the first place. I borrow this from Jared Bernstein of the Center for Budget and Policy Priorities, and formerly the Vice President’s economic advisor. Bernstein says that manufacturers face barriers to entry, expansion, and innovation that no single, private firm can solve. For example:

Research Barriers: R&D can be prohibitively expensive, and hard to capture profits (e.g., advanced batteries);

Coordination Barriers: No single firm could coordinate national projects like the internet or smart electrical grid;

Innovation Barriers: Firms need help morphing academic innovations into the production process;

Credit Barriers: Markets will underinvest when returns are particularly uncertain;

Exports: Firms need the federal government to push back against unfair trade practices.

I want to especially emphasize Bernstein’s last point. Enforcing the rules of trade that we already have on the books--a key piece of President Obama's manufacturing agenda—does not mean asking for “special treatment.” In reality, China is using market-distorting practices on a massive scale. Until China halts this mercantilism, we can’t have a free market. And common sense tells us that enforcing these rules should be the status quo. It should be standard practice.

Sadly, Romer argues against the importance of manufacturing. I’d like to point her to the Brookings Institution’s Howard Wial and Jonathan Rothwell, who recently did an outstanding job of emphasizing the importance of a strong manufacturing base to our national ecology of innovation, research, and development. Similarly, there’s also the award-winning work of Wally Shih and Gary Pisano, who made this same connection in a 2009 Harvard Business Review piece. If our nation values expertise in engineering, science, and technology, it must value manufacturing.

But most egregiously, Romer completely ignores perhaps the most important attribute of manufacturing: its jobs multiplier effect. Put simply, and to paraphrase the President's former manufacturing adviser Ron Bloom, a community that attracts an auto assembly facility will also attract a Walmart. But, the opposite is never true. A typical manufacturing job supports four or five other jobs in the economy, directly and indirectly. Manufacturing plays an outsized role in our exports, and factories are often the largest local source of revenue for the public sector.

Finally, we must look at the argument that policy prescriptions are not effective. Much of what President Obama is proposing would actually undo current disincentives such as the higher taxes that manufacturers face in the U.S. (which can drive them abroad), the lack of skilled workers to fill jobs, insufficient public investment in infrastructure, and a lax overall enforcement of trade laws. The President is proposing smart policies--but they hardly rise to the level of industrial policy.

What Ms. Romer needs to do is explain the phenomenon of Germany’s thriving industrial sector. Despite strong industrial unions, high wages ($48/hour in manufacturing vs. $32/hour in the U.S.), and thick regulations, Germany is able to keep its global share of manufacturing and exports steady while China rises and the U.S. falls.

How does Germany accomplish this? Its economic policies are shaped around supporting manufacturing. The United States, with better access to natural resources, immense human capital, and breathtaking entrepreneurship, should be outperforming Germany on a per capita basis, but we are not.

Fortunately, President Obama appears to have rejected Romer's advice. If not for any of the above reasons, then for this one: from a strategic (though perhaps not economic) point of view, the U.S. does not want to depend on China to supply our military with parts, computer chips, rocket propellant, surveillance equipment, or anything else, really. If we lose the capacity to manufacture any of our key national security components, we really will have no choice. And China--which has ignored Romer's advice--will have won this argument, which is far from academic.

Progressive Breakfast

Bill Scher — Thu, 09 Feb 2012 09:04:30 -0500

MORNING MESSAGE: At CPAC, Inequality Dare Not Speak Its Name

OurFuture.org's Terrance Heath: "At today's Conservative Political Action Conference (CPAC) I'm likely to hear an old favorite conservative talking point repeated over and over again: Marriage cures poverty, economic inequality, and just about any other economic complaint you can name — especially for black folks ... What I won't hear at CPAC, besides any specific plans for job creation, is how declining marriage rates are not to blame for economic decline, but economic decline is really to blame for declining marriage rates. I won't hear that the best way to increase marriage rates is improve Americans' economic prospects by growing the economy and putting people back to work. I probably also won't hear that marriage would actually improve the economic standings of one group of Americans: gay couples."

Cranky Conservatives Convene At CPAC

Conservatives are "worried" as they gather for 3-day CPAC conference. W. Times: "...Conservatives gathering for the conference are becoming more explicit than ever before about their disappointment with the movement’s progress in the years since Ronald Reagan ... Year after year at these meetings, CPAC attendees have grumbled about the failure of some of the elected Republican officials who profess conservative ideals to adhere to them once in power ..."

Romney expected to pander hard at CPAC tomorrow. Politico: "His speech, sources with ties to the Romney campaign said, will likely be a broad stroke that touches on the economy and fiscal discipline, but could feature nods to the social conservative planks of the GOP platform. It will not, sources said, be his standard stump speech."

White nationalist to be featured speaker at CPAC. MSNBC's Steve Benen: "Right Wing Watch [reports]: 'CPAC is hosting the panel "The Failure of Multiculturalism: How the pursuit of diversity is weakening the American Identity" with Peter Brimelow, the founder and head of VDARE.com. VDARE is a White Nationalist website, run by Brimelow, which frequently publishes the works of anti-Semitic and racist writers...' ... Perhaps someone could ask Romney, Santorum, Gingrich, and the entire congressional Republican leadership how comfortable they are with attending a conference with white nationalists and radical conspiracy theorists."

Foreclosure Fraud Settlement Expected Today

$26B foreclosure state settlement may be inked today, as state AGs reportedly end holdout. NYT: "Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure ... Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates ... A recent estimate from the settlement negotiations put the average aid for homeowners at $20,000. 'I just don’t think it’s going to be a life-changing event for borrowers,' said Gus Altuzarra, whose company, the Vertical Capital Markets Group, buys loans from banks at a discount ... Mark Zandi, the chief economist for Moodys Analytics, said that while the settlement looked small compared with the scope of the problem, it was not necessary to erase all, or even most, of the nation’s negative equity to turn the market around ... a lawsuit [NY AG Eric] Schneiderman filed Friday ... will [still] go forward."

Negotiations finalized after midnight. WSJ: "The Obama administration made a full-court press over the past four days to secure the support of key state attorneys general, including those from Florida, California and New York. All three states are expected to be part of the announcement..."

Some will get more help than others. HuffPost: "The deal would be the largest payout to date from banks in the wake of the financial crisis ... Those who already lost their home, however, would receive just the smallest fraction of the money: a one-time cash payment of about $1,800 as compensation ... Potentially more significant, the banks would agree to forgive some mortgage debt owed by struggling borrowers through what's called 'principal reduction.' ... 'This settlement could be a starting point for principal reduction,' said Ira Rheingold, president of the National Association of Consumer Advocates. '... If it is done well, maybe it will shame Fannie and Freddie into doing what it should have been doing all along.'"

Feds plan to sue banks for mortgage bond fraud. WSJ: "The move would mark a stepped-up regulatory effort to hold Wall Street accountable for its sale of bonds linked to subprime mortgages in 2007 and 2008. At issue is whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors..."

House GOP introduces legislation to disempower CFPB. W. Post: "The House GOP is now moving forward with bills that would remove the CFPB director from overseeing the Federal Deposit Insurance Company and allow Congress to directly control its funding every year ... Under Dodd-Frank, which created the bureau, the CFPB is funded by the Federal Reserve, which isn’t subject to congressional appropriations. There’s also a bill to ensure that information collected by the bureau is subject to attorney-client privilege."

GOP Moves Anti-Transit Transportation Bill

Dems slam GOP transportation bill for targeting transit users and federal workers for cuts. Politico: "The transportation bill primed for floor action would make federal employees — including members of Congress — pay a larger share of their pensions. The bill ... also ends dedicated transit funding from the Highway Trust Fund, meaning transit projects would need to compete with other general fund priorities while road projects would take the entire share of gas tax revenues ... Virginia Rep. Jim Moran said there was 'no question' Republicans had political motives in targeting two major Democratic demographics: federal employees and transit riders. 'They said these are not Republican demographics, so stick it to them,' Moran said. 'The more bashing of federal employees, the more likely you are to get Republican votes.'"

CBO says GOP transportation bill will starve transit. ThinkProgress: "...Republicans have imperiled the process by proposing to stop using revenue from the fuel tax to pay for mass transit ... [Instead,] the GOP wants to make a one-time $40 billion allotment for mass transit. Speaker John Boehner (R-OH) has proposed expanded oil drilling in areas currently off limits to the practice, including areas in the Gulf of Mexico, off the coast of Virginia, and part of the Arctic National Wildlife Refuge, in order to raise the $40 billion. But today, the Congressional Budget Office found that Boehner’s proposal would raise just 5 percent of the funds needed..."

War On Contraception Targets Workers

NYT's Gail Collins notes that contraception rule does not apply to churches: "Catholic dogma holds that artificial contraception is against the law of God ... The problem here is that they’re trying to get the government to do their work for them ... The churches themselves don’t have to provide contraceptive coverage. Neither do organizations that are closely tied to a religion’s doctrinal mission. We are talking about places like hospitals and universities that rely heavily on government money and hire people from outside the faith."

TNR's Jonathan Cohn sympathizes with Catholic leaders, but sympathizes with employees more: "Freedom of religion means the freedom to observe the tenets of one's faith ... To dismiss that concern out of hand would be wrong ... The checks to your insurance plan may have the name of a religious institution on them. But, as a matter of economics and of principle, the money is (or should be) yours ... the debate is also about a low-income worker at a large institution that happens to be religious—say, a janitor or clerk at Catholic hospital or university—who is trying to support a family on less than $30,000 of household income. If this person wants contraception through an implant or pills, which are the most reliable methods of birth control, the cost may be prohibitive—easily into the hundreds of dollars a year and even into four figures."

Conservatives pushing for more than just a bigger exemption. TNR's Alex MacGillis: "[USA Today reported that] 'Anthony Picarello, general counsel for the U.S. Conference of Catholic Bishops ... cited the problem that would create for "good Catholic business people who can't in good conscience cooperate with this." "If I quit this job and opened a Taco Bell, I'd be covered by the mandate," Picarello said.' ... as the Church sees it, [this is] also about protecting the right of all employers -- including, apparently, fast food franchises -- to deny contraception coverage to their employees."

Breakfast Sides

Conservatives jump on CBO report to push for lower compensation for federal workers. W. Post's Joe Davidson: "But the CBO findings certainly are not universally accepted ... During the House session, Rep. Elijah E. Cummings (D-Md.) said that 'the much better report is the Bureau of Labor Statistics report. They have more experience at this, and they show that federal employees were paid 26 percent less than private-sector employees.' ..."

President's economic advisers project improving economy, if stimulus measures are extended. NYT: "...advisers to President Obama have updated their forecasts in recent days and now project that the economy will create two million jobs this year if stimulus measures are extended, which could reduce the unemployment rate to about 8 percent by year’s end ... Private sector forecasters have said that ending the two percentage point reduction in payroll taxes and the emergency jobless aid could subtract about 1 percent from economic growth."