mortgages

The Chamber of Commerce's Jobs Deception Campaign

Richard Trumka — Thu, 15 Oct 2009 07:30:06 -0700

Unions are popularly known as "the folks who brought you the weekend." In contrast, the U.S. Chamber of Commerce has the distinction of trying to take away the weekend--along with overtime pay, the minimum wage, Buy America rules, workers' freedom to form unions, child labor standards....The list is long and ugly.

So it's farcical that today the Chamber launched a campaign estimated to run in the tens of millions of dollars to promote job creation.

The Chamber's campaign originally started out as an attack against financial regulation--until the Chamber found out how strongly U.S. taxpayers support reining in Big Banks and the financial industry's widespread shady practices. So the Chamber conveniently changed the packaging to purportedly focus on jobs, which in fact the American people desperately need.

Look at who accompanied the Chamber suits while they were announcing their Orweillian-named "free enterprise campaign." As Sam Stein reported here:

Many of the individuals featured on Wednesday are long-standing donors to Republican candidates and groups that have fought efforts to enhance regulation. And, in one case, the business leader appearing alongside [Thomas] Donohue to decry the interference of government in the market place received business through the benefit of government contracts.

Yet, while millions of America's workers struggle to find jobs in an economy where there are more than six workers searching for every one job, the Chamber repeatedly opposed extending unemployment insurance. Can't have government interference in the marketplace, after all. Or aid to jobless workers. The same workers the Chamber's smoke-and-mirrors campaign is supposed to be all about.

The Chamber also is joining with Big Banks and financial giants to try and kill a proposed agency that would protect U.S. consumers from being preyed upon by unscrupulous banks, mortgage lenders and many of the same financial institutions that helped create our nation's economic disaster. The Obama administration's proposed Consumer Financial Protection Agency, which this week is being considered in the House Financial Services Committee, would regulate products such as credit cards and home loans, while ensuring the U.S. Securities and Exchange Commission oversaw the $450 trillion "derivatives" market that sunk the world economy.

The Chamber is spending $2 million in attack ads, claiming that the new agency would hamstring even your local butcher from extending you credit for a week. It's the same sorry effort at deception and outright lies that the health insurance industry now is trying to pull in the debate over health care reform. Tell enough lies and hope someone believes you.

As President Obama said in response to the Chamber's distortion:

"We've made clear that only businesses that offer financial services would be affected by this agency. I don't know how many of your butchers are offering financial services," Obama said to laughter.

The Chamber is so twisted up in deception it seems unable to even provide accurate membership numbers. Writing in Mother Jones this week, David Corn points to a big discrepancy between the Chamber's public membership numbers and reality.

In testimony before Congress, statements to the press, and on its website, the Chamber claims to represent "3 million businesses of all sizes, sectors, and regions." In reality, the number is probably closer to 200,000.

Not sure if the 200,000 includes Apple Inc., Pacific Gas & Electric and the other giant corporations that recently have pulled their membership from the Chamber because of its draconian stand on climate change.

The Chamber's so-called "free enterprise" campaign has been tried before. After World War II, the National Association of Manufacturers led a similar such effort. That campaign to sell capitalism to U.S. consumers incurred the derision of no less than the editors of Fortune magazine, who found similar sentiments among business executives represented on the boards of the business associations that supposedly represented them.

In dismissing the campaign as ludicrous, one such executive described it this way:

The best way we can demonstrate the importance of Free Enterprise is to make it work.

It's clearly not working now. And although the Chamber may try to wrap itself in the shiny trappings of a feel-good campaign, its repeated attacks on consumers and workers demonstrate who the Chamber stands for: Wall Street not Main Street.

This is a crosspost from Huffington Post.

The Truth about the Community Reinvestment Act

Hillary Hampton — Mon, 29 Sep 2008 11:11:27 -0700

Conservative commentators in the Wall Street Journal and the National Review, and on YouTube are spreading the myth that the Community Reinvestment Act, a law designed to eliminate discriminatory banking practices, caused the current financial crisis. In the words of Fox News' Neil Cavuto, “Loaning to minorities and risky folks is a disaster.”

Conservatives have twisted the facts to substantiate their revisionist history. But don’t be fooled: the financial crisis was caused by conservative financial follies and bankers run amok and nothing more.

Myth: The Community Reinvestment Act forced banks to make loans to all low-income families and people with poor credit, fining banks that refused to comply.

Fact: The Community Reinvestment Act has encouraged banks to lend fairly and responsibly for over 30 years. The Community Reinvestment Act does not impose fines; it periodically examines FDIC-backed banks and issues them a CRA-compliance rating. [Community Reinvestment Act] To receive a high rating, banks must meet the financing needs of as many members of their community as possible and must not discriminate against racial and ethnic groups or certain neighborhoods. However, a bank cannot receive a high rating unless it is also maintaing “safe and sound banking practices.” [Community Reinvestment Act] In other words, the CRA requires banks to lend to working-class families and people of color, but only when those people have been deemed credit-worthy.

Myth: The housing bubble burst when too many people with home loans mandated by the Community Reinvestment Act failed to make their mortgage payments.

Fact: More than half of problematic sub-prime loans made in the last few years were issued by banks that are not regulated by the CRA. [U.S. House Committee on Financial Services] The CRA applies only to financial institutions that are insured by the FDIC, but not to independent mortgage companies such as Countrywide. In fact, non-CRA lenders were twice as likely as CRA lenders to issue excessively expensive subprime loans to vulnerable creditors. [Federal Reserve Bulletin] Responsible mortgages made by CRA lenders have a low rate of foreclosure similar to that of traditional mortgages. [Federal Reserve]

Myth: In 1995, Bill Clinton changed the Community Reinvestment Act to allow the securitization of CRA and subprime mortgages.

Fact: The 1995 revisions to the CRA changed only the way in which a bank’s CRA compliance is evaluated; they made no mention of mortgage securitization. [60 F.R. 22156] Under the 1995 rules, banks are rewarded only for making mortgages in their communities, not for re-selling mortgages as securities.

Myth: President Bush and Senator McCain tried to stop the subprime mortgage crisis, but Democrats blocked their efforts.

Fact: Bush and McCain supported the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have created a new government agency to oversee Fannie Mae and Freddie Mac and other federal housing programs. However, the bill would have done nothing to stop the rash of subprime lending that preceded the housing bubble because it provided oversight for only Fannie and Freddie, not for the companies that issued subprime mortgages. [GovTrack]

Newsflash: Populism Is Popular

David Sirota — Thu, 17 Apr 2008 10:08:50 -0700

Whenever pundits and political elites express surprise at the power of populism, I always think back to the tongue-in-cheek headline of Chris Hayes' In These Times article that read "Economic Populism Proves Popular." Populism is an ideology that says that government should - gasp! - reflect what actual people want. It is just so damn funny when the same political Establishment professing reverence for our democracy then expresses outrage and surprise that politicians once in a while are forced to reflect what the public wants.

So I was laughing today when I read this Bloomberg News piece breathlessly telling us that "Democrats Pushing Obama, Clinton Toward Populism" - as if that's something so outrageous and odd as to be shocking. Here's the critical news from Pennsylvania, Indiana and North Carolina - three states whose primaries are coming up:

Democrats in all three states had a negative view of trade, with 58 percent in Indiana, 55 percent in Pennsylvania and 61 percent in North Carolina saying it has hurt the economy. At least three in 10 in each state say it hurt a lot.

This finding conforms with earlier polling showing voters of both parties are sick and tired of lobbyist-written trade policies that undermine our economy and destroy the environment and human rights in the developing world.

Additionally, the same poll shows the public is angry about our politicians using their power to hand over more goodies to the banks and Wall Street firms that created the financial crisis:

A majority in each state favors a government bailout of homeowners in danger of foreclosure, according to a Bloomberg/Los Angeles Times poll of likely Democratic voters...After mortgage lenders, voters in the three states faulted insufficient government regulation, as well as irresponsible borrowers, for the housing crisis...Respondents in all three states say, by margins of 2 to 1 or better, that the federal government should regulate the financial industry more aggressively.

That news outlets seem so surprised that the public supports populist policies to deal with our economic crisis just shows how out of touch with mainstream public opinion our political elite is from the rest of the country.

TBA 2008 - Housing Crisis and Corporate Accountability

Brian Dockstader — Wed, 19 Mar 2008 08:41:33 -0700

Featuring: Dean Baker, Theresa DiMartino, Al Meyerhoff, Lisa Ransom

The More Americans Demand Change, The More The State Of The Union Address S

Andrea Batista Schlesinger — Tue, 29 Jan 2008 07:30:05 -0800

DMI’s Rapid Response to the 2008 State of the Union

Click here to read the Drum Major Institute for Public Policy’s full analysis of the President’s domestic policy prescriptions – complete with statistics and talking points -- online at www.drummajorinstitute.org/sotu2008

The American people want change. Every Presidential candidate, Democrat and Republican, has made this a mantra. But the State of the Union Address reveals no alteration from President George W. Bush. This year the President labored to keep breathing life into the same worn out ideology that has repeatedly failed America’s current and aspiring middle class.
The President continues to proclaim the foundation of our economy sound when so many current and aspiring middle-class Americans are losing their spot in the American Dream. He prioritizes ideology over proven methods of stimulating the economy and providing health care. He uses the language of consumer choice to dress up what really amounts to unbridled corporate power and profiteering. He continues to assert that the market will right itself, if only people understand it more and restrict it less, despite all of the evidence to the contrary.

Despite the praise-worthy components of President Bush’s address tonight – his signing of the Energy Independence and Security Act, his cooperation with Congress to pass a stimulus reform that would include millions of low-income Americans he initially intended to exclude, his newfound interest in supporting military families – his approach reflected a commitment to ideology, as opposed to willingness to see how that ideology has actually impacted current and aspiring middle-class Americans.

After years of insisting that the economy was doing great as middle-class families were squeezed by stagnant wages and a rising cost of living, it takes weak corporate profits to make the President recognize that times are tough.

* Because the President’s ideology insists that tax cuts are always preferable to government spending, the stimulus proposal includes costly and ineffective incentives for business rather than a fast and efficient expansion of unemployment benefits that would both boost the economy and help the middle-class households hardest hit by the downturn.

* Looking at the corporate recklessness and lack of government oversight that created the subprime mortgage crisis, President Bush avoids regulating the industries at fault. Rather he touts a plan that allows banks to decide on a purely voluntary basis whether they care to work out a payment plan with beleaguered homeowners. We don’t imagine that’s the kind of volunteerism he heralded elsewhere in his address.

* A middle-class standard of living is defined by things like access to education, health coverage and the opportunity to hold down a stable, well-paid job, yet from education to health care to tax policy, the President preferred to experiment with market-based solutions that won’t help aspiring Americans work their way into the middle class. It was particularly shocking that the President urges Congress to make his failed tax cuts for the wealthy permanent, despite their failure to help the nation recover from the last economic downturn.

The President tells us that he trusts the American people. The more important question is whether the American people have any reason to trust the White House. The President’s support of choice in this State of the Union address reveals that he is choosing not to heed the call of the American people for common-sense solutions to the challenges they face.

Yet, what is most important this address, is not the President delivering it, but the ideas represented. This State of the Union can either serve as a blueprint for continuing to move backwards, or a line of demarcation away from a policy outlook that has caused irreparable harm to America’s middle class. While the President’s years of imposing dangerously flawed policies on the nation are drawing to a close, future leaders, in Congress and the White House, will determine whether his distorted worldview lives on, and continues to afflict the middle class and the nation.

* * * * * *
You will find DMI’s full analysis of the President’s domestic policy prescriptions online at www.drummajorinstitute.org/sotu2008

Click here to read DMI’s analysis of what Bush’s State of the Union address means for:

Economy (including the foreclosure crisis)
Budget
Energy and Environment
Healthcare
Education
Veterans
Immigration
FISA Immunity